Debt ceiling news: Demands Republicans are making

WASHINGTON — Debt ceiling talks between the White House and congressional Republicans took a new turn this week after House Speaker Kevin McCarthy said he was unwilling to compromise with Democrats on a series of Republican demands. A new, tougher tone.

Instead, McCarthy’s lieutenants say they see a vote to raise the debt ceiling — and avoid a potentially catastrophic U.S. debt default — as a concession to Democrats, and possibly the only one they plan to make. Given that a default could wreak havoc on the global economy, raising borrowing limits is often a formality, often structured as a companion bill attached to unrelated legislation.

Patrick McHenry, the top GOP negotiator in North Carolina, was asked Tuesday night what concessions Democrats would get as part of a potential compromise with the White House to win Republican and Democratic votes.

“The debt ceiling,” he replied.

“That’s what they got,” added Rep. Garret Graves of Louisiana, another Republican negotiator.

Republicans hold a slim majority in the House of Representatives, while Democrats hold a one-seat advantage in the Senate. So negotiators need to craft a bill that both chambers can pass. Republican-demanded policy changes that many Democrats will never vote for would complicate any eventual deal’s path through Congress.

Republicans have rejected at least two compromise offers from the White House, a Democratic official said. The first proposes freezing government spending at current levels next year, while the other would cap spending for two years.

While their demands may change, here are the key concessions Republicans want Democrats to make in exchange for their vote to raise the debt ceiling. Some are relatively easy, while others prove tricky.

• Energy and Mining Licensing Reform: The proposal is arguably the easiest issue for negotiators to reach consensus, because both parties white house and house republicans Supports the broader goal of making it easier to start new energy projects such as wind farms and natural gas pipelines in the United States. Negotiations could become uncertain over which permits to prioritize: Republicans want fossil fuels, while many Democrats think renewables should come first.

• Withdrawal of unused Covid-19 funds: Between 2020 and 2022, Congress authorized approximately $4.6 trillion Help America Respond to the Coronavirus Pandemic. The Congressional Budget Office estimates that about $30 billion of that money is unearmarked and could be clawed back to save money. President Biden has said the White House will accede to the request.

The next few are much trickier.

• New job requirements for Medicaid: The Republican debt-limitation bill passed by the House of Representatives in April would require able-bodied adults without children to work or receive job training in order to continue receiving Medicaid, the health insurance for low-income people. The White House rejected the offer. “I will not accept any request that will affect my work People’s health care needs,” Biden said earlier this month.

• Changes to current work requirements for Food Stamps: Unlike Medicaid requirements, the GOP’s proposal to increase the working retirement age window for those enrolled in the Supplemental Nutrition Assistance Program (SNAP) appears to leave some room for compromise, from 50 to 55 years oldOn the same day that Biden rejected the Medicaid work requirement, he also pointed out that he supported the 1990s work requirement, and said that “there may be others” he would support, “but it will not have any impact.”

• The 2024 baseline federal budget figures are lower than 2023: This is the biggest sticking point in the whole process, and it is also the issue that several negotiations broke down temporarily.

McCarthy of California often equates the $31.4 trillion U.S. national debt with personal consumer debt. He argued that if you “exceed your limit” on your personal credit card, then you, and America, need to “spend less in the coming year than we spend this year.”

But it’s not that simple. Raising the debt ceiling doesn’t mean more spending in the future. Currently, it only allows the government to pay bills that have already been incurred.

What Republicans are really doing is using their influence and the implicit threat of default to achieve a separate, long-standing Republican policy goal: to force the government to reduce discretionary spending. In that case, McCarthy wants to roll back the 2024 baseline spending to 2022 levels. However, he also insisted that defense spending – which accounts for more than 30% of total spending – is not affected by any cuts. That means everything else will need further cuts to bring the total back to 2022 levels.

According to the conservative-leaning Cato Institute, exempt army Cutting spending would require cuts in other parts of government — from homeland security to public health to air traffic control — by about 20%.

Biden has floated a proposal next year to freeze spending levels this year to counter such calls for deep cuts to domestic programs, a proposal McCarthy has so far rejected.

“I don’t think I’m asking the impossible,” McCarthy said Wednesday. “Let’s spend less next year than we’ve spent this year.”

In addition to the aforementioned public demands, House Republicans have a second set of demands, a conservative wish list that McCarthy and his team have so far not formalized.

Still, those back shelf needs were on full display Wednesday in the memo It was posted by conservative Rep. Chip Roy of Texas, a McCarthy opponent who led a failed effort to reject McCarthy as House speaker earlier this year.

Roy’s needs list contains four additional items. Each of them represents the red thread of the White House.

1. Repeal the electric vehicle tax credit that is at the center of Biden’s renewable energy agenda, which was passed last year in the Lower Inflation Act (IRA).
2. Eliminate $80 billion in additional IRS funding, which is also part of the IRA.
3. Overturn Biden’s executive action to forgive approximately $315 billion worth of student loan debt. The Supreme Court will decide the fate of Biden’s plan in the coming weeks.
4. Enact the REINS Act, which would require regulators such as the Federal Trade Commission and the Environmental Protection Agency to seek approval from Congress before issuing major rules.

Roy’s memo called on McCarthy and Republicans to “hold their ground” and insist that all their demands be met or they will give nothing. It also shows that, at least for Roy, avoiding a debt default is not the number one priority.

“Each one (request) is critical and none should be given up just to seek a ‘deal’,” Roy wrote.