(CNN) — The United States government took a step back on Tuesday to avoid a self-inflicted economic disaster.
House Republicans fended off the first assault attempt by hardline conservatives horrified by the bipartisan plan to suspend the debt ceiling until after the presidential election.
Many hard-line conservatives don’t buy into the mirage that the deal to cut some spending for two years and try to control it afterward is going to have a significant effect on the size and scope of the federal deficit.
Achieving that larger goal would require meddling with the sacred cows of US government spending—the Pentagon, Social Security, and Medicare—who weren’t even part of this debt ceiling conversation.
US President Joe Biden and Speaker of the House Kevin McCarthy introduced the debt ceiling bill as the best possible compromise that can be reached in the short time remaining before the Treasury Department unable to meet its obligations, which could be as early as June 5. And it could be, but it doesn’t come without objections from the political left and right.
The bill passed the first test, but the House math is a moving target
A key conservative, Rep. Thomas Massie of Kentucky, broke with two other hardline members of the Rules Committee to vote with McCarthy-aligned Republicans and pass the bill in committee. Although he ultimately opposes the deal, Massie argued that the full House should have a chance to speak.
Debt is a topic that motivates Massie. He often wears a homemade real-time digital debt clock on his suit so anyone who talks to him has to see the trillions of dollars piling up.
Representative Thomas Massie, Republican of Kentucky, wears a digital pin showing the US national debt during a meeting in Washington, Tuesday, May 30, 2023. (Credit: Sarah Silbiger/Bloomberg/Getty Images)
But his decision to vote for the bill to go to the floor means the debt deal could pass the House as soon as Wednesday, even if it needs the help of the many Democrats who appear willing to back it.
It is unclear how many Republicans will challenge McCarthy and how many Democrats Minority Leader Hakeem Jeffries will be able to add to make up the difference. Democrats expect Republicans to get a majority, at least 150 of the 218 votes needed for passage.
House progressives are divided on the deal. “President Biden, frankly, has kicked McCarthy’s ass in the negotiations. They wanted a lot more than they got; the president made sure they didn’t get those things. But it’s still a bad deal,” he said. Tuesday to CNN’s Manu Raju, New York Rep. Jamaal Bowman, who has yet to decide on his vote.
In the Senate, Minority Leader Mitch McConnell has backed the bill, saying that — barring unforeseen circumstances — the deal could eventually pass the House.
This will not fix the deficit
While the bill in question will do the important job of neutralizing the debt ceiling as a bargaining chip, it’s not designed to do much to rein in the spending that created the debt in the first place.
Lawmakers exempted Social Security spending, which currently accounts for 19% of US spending, from the talks; Medicare, 12% of spending; and national defense, 12% of spending. Republicans rejected any suggestion of a tax increase.
The social safety net and national security are drivers of the deficit lifestyle that has created the national debt of $31.4 trillion. They would have to be on the table to really contain spending.
According to a Congressional Budget Office analysis released Tuesday night, the bill would reduce the budget deficit by $1.5 trillion over a decade. Instead, debt-limit legislation passed by House Republicans in late April would have reduced the deficit by $4.8 trillion, according to the agency.
But the CBO score presents a potential problem for McCarthy. The work requirement provisions of the package would increase enrollment in the food stamp program by an average of 78,000 people a month when fully implemented, in addition to increasing spending by $2.1 billion over the decade.
A spit on what should be on the table
CNN’s Jake Tapper asked a Democrat, Rep. Jason Crow, and a Republican, Rep. Ken Buck, who represent very different views of Colorado, why defense spending not only hasn’t been cut, but it will increase.
“I don’t think it’s a good idea to freeze everything else, but allow increases in the defense budget,” Crow said. But he added: “The Democrats don’t control the House right now. The Republicans do. They’ve set that up as a red line, and we’re trying to negotiate as best we can to avoid a national default.”
Buck, who has said he will oppose the debt deal, wants both social and defense spending on the table.
“There’s a lot of excess at the Department of Defense that we can cut,” he told Tapper. “The procurement process and other areas we should be looking at closely.”
There is a growing split in the Republican Party between hardline fiscal conservatives and those who want to protect defense and social spending.
Protecting Medicare and Social Security has been the blood oath of Democrats, who have long tried to galvanize voters with accusations that Republicans are trying to take those social programs away from them.
This year, however, it is Republican presidential candidates such as Florida Gov. Ron DeSantis and former President Donald Trump who are trying to outdo each other with promises to protect that spending.
Trump, who enjoys enormous influence among Republicans in the House of Representatives, has encouraged negotiators to demand as much cuts as possible and has even suggested that a debt default would not be a big problem. McCarthy spoke to him about the negotiations in the days before the deal was announced, but Trump has been remarkably silent on the matter.
DeSantis, for his part, criticized him. And after his first official campaign act this Tuesday, the governor of Florida asked Trump to take a position on the matter.
“I mean, are you leading from the front or are you waiting for the polls to tell you what position to take?” DeSantis told reporters after his remarks in Iowa.
McCarthy could face a reckoning
Anger over the deal could have repercussions within the Republican Party in general and for McCarthy in particular.
In his bid to secure the gavel in January, he agreed to give any member the power to challenge his position as president. That could mean angry hardliners like Rep. Dan Bishop of North Carolina.
“None. Zero,” Bishop told CNN’s Manu Raju, when asked if he had any confidence in the president. “What basis is there for trust? The tool of republican unity cannot be given up.”
The political arm of the conservative Heritage Foundation announced that it will penalize Republicans who vote in favor of the deal.
“This debt ceiling agreement does little to address the problems that have led to nearly $32 trillion in debt,” he said in a statement.
But that’s exactly the problem with using the debt ceiling as leverage to rein in spending, according to Democrats. Create a desperate situation.
“Why is there a hostage situation where the American economy has been taken hostage in the first place?” asked Rep. Gregorio Casar, a progressive Democrat from Texas, during an appearance on CNN. “Why does the president have to make some kind of ransom payment?”
We’ve already seen versions of this movie
If controlling debt was easy, lawmakers would have done it by now. CNN’s Tami Luhby has an excellent flashback to 2011, the last time a default came close, when then-President Barack Obama, a Democrat, and then-Speaker of the House John Boehner, a Republican, were in the power.
Congress devised a plan to apply painful cuts — known as sequestration — as a kind of incentive to push lawmakers to unite around a “big deal” to rein in spending. When the big deal fell through, lawmakers spent years undoing the painful cuts.
Most people are not opposed to cuts. At least not in theory
The vast majority of the country (84%) wants the debt ceiling to be raised, according to a CNN poll conducted by SSRS and published last week, before a deal was announced. Only a small minority—15%—of Americans said Congress shouldn’t do it under any circumstances. The 60% of those who think raising the debt ceiling should be accompanied by spending cuts might find something to like in this deal.
And the poll suggests the country may be less overtly partisan and more moderate than often made out by criticism of its politicians. Some 41% of those surveyed consider themselves independent or members of another party, rather than Republicans (30%) or Democrats (29%).
They are relatively abstract questions. Opinions will be altered when lawmakers engage in the kind of general debate that includes entitlement spending, defense spending and tax rates that could have a real impact on the deficit.
