If you ask Democrats, journalists, and even some Republicans, the sky seems to keep falling. The current fiscal fight at the House is no exception.
Joe Biden and Democrats insist that a clean debt ceiling increase must be made. Otherwise, the consequences could be severe. The Senate GOP leader Mitch McConnell is only saying to reporters that “We won’t default.” However, in the House Republicans are set to wage a long battle over the debt ceiling, and possible cuts to the federal budget.
This puts Kevin McCarthy, House Speaker, in a position he might not like: in the driver’s seat for a long ideological struggle.
He’s not alone in this battle, the Senator GOP seems more than willing to let it be taken up by the House on its own. This puts McCarthy’s conservative allies in control, giving them a wide range of cuts options. But it also exposes which House Republicans might not be willing to accept cuts, and which McCarthy still holds the upper hand.
Politico published a piece today highlighting McCarthy’s struggles.
Many Republicans feel that McCarthy is the right man to make tough decisions in the new split government era. Consider Sen. Susan Collins (R.Maine), who is about as open to lifting the debt ceiling as any Republican you will find at the Capitol.
She stated that at the moment her preference would be for President McCarthy to sit down with Speaker McCarthy and listen to each other to reach an agreement.
McCarthy’s challenge is not to pass a bill to lift the debt ceiling. It’s to appease his conservatives, who want draconian fiscal cutbacks in return — while eventually coming to an agreement with some House Democratic support in order to build momentum in the Senate. These competing agendas may prove difficult to reconcile, if possible, by the time that the Treasury Department has finished using the so-called extraordinary measures to maximize the country’s remaining borrowing power.
This fight, which could last for weeks or even months, is McCarthy’s first test of his new position as Speaker. It’s also a significant one. No matter what choice McCarthy makes, the fiscal health of America is in jeopardy.
Democrats want a clean debt ceiling increase. Conservatives want cuts that Politico calls “draconian”. (which is a sign that they don’t really know what that term means). Moderate Republicans are more open to a balanced approach that includes some cuts, but also an increase in the debt ceiling.
What are the options for making cuts? According to Washington Post, quite a lot.
The party has so far focused its attention on reducing federal spending in health care, education, and labor programs. This could be by billions of dollars. Some Republicans have also proposed a deeper look at entitlements. These are the largest annual expenditures of the government and represent some of the most pressing fiscal challenges facing the United States.
A group of GOP lawmakers has called for the formation of special panels to recommend changes to Social Security or Medicare. These programs are facing real solvency issues and could lead to benefit cuts in the next ten years. Other members of the party have presented more detailed plans to reduce costs. These include raising the Social Security retirement age from 70 to help younger Americans get federal benefits.
It is clear that Democrats and Republicans will oppose any entitlement reform. Although McCarthy may have agreed to the demands of the conservatives, they still outnumber the entire Congress in the House. McCarthy will have to negotiate with Democrats and President Biden to accept those demands.
It’s not only the national fiscal health at stake. This could have a significant impact on McCarthy’s Speakership.