House Budget Chairman Jodey C. Arrington said Wednesday that Congress needs to lift the debt ceiling and impose fiscal controls “immediately” without waiting on a fiscal 2024 budget resolution.
One day after President Joe Biden called on Republicans to produce a budget before they leave town for the April recess, Arrington told reporters a debt limit deal was too important to wait on the time-consuming budget process.
“We need action on the debt limit immediately because of the state of the fiscal union,” the Texas Republican said after holding a hearing on that topic featuring a panel of prominent economists. “We have to get consensus on … what the fiscal controls are and move forward,” he said, citing the toll that inflation has taken on family budgets.
Arrington’s comments echoed a call from Speaker Kevin McCarthy, R-Calif., who urged Biden in a letter Tuesday to resume negotiations on lifting the debt ceiling and reining in spending. McCarthy said Republicans could offer cost savings of about $4 trillion over a decade, but Democrats dismissed that offer and said the GOP needs to produce a budget to begin substantive negotiations on spending policies, which they argue should be separate from raising the debt limit.
Arrington declined to offer a timeline Wednesday for a GOP budget plan, which will be delayed past the April 15 statutory deadline. But he told reporters after the hearing that consensus was building for fiscal changes that could reduce deficits by at least $3 trillion over 10 years, which he called “a big step” toward the $15 trillion in savings he said is needed to balance the budget over a decade.
“I think the will’s there in our conference, and we’re making great strides and getting agreement on what will go into our budget,” Arrington said. “And it will be starkly different than the president’s proposal.”
He said a budget “is forthcoming” but offered no schedule for it.
‘Numbers don’t add up’
“The reason we don’t have a Republican budget is because the numbers don’t add up,” Rep. Robert C. Scott, D-Va., said during the hearing. Democrats pointed to a Congressional Budget Office analysis showing that balancing the budget in 10 years while protecting defense, Social Security, Medicare and veterans benefits from cuts would require virtually eliminating all other discretionary programs.
Pennsylvania Rep. Brendan F. Boyle, the committee’s ranking Democrat, said enacting such a plan “would gut government to the point society can no longer function” while triggering a recession and eliminating 2.5 million jobs.
Rep. Chuck Edwards, R-N.C., pushed back on that criticism, saying budget math was not the reason for a delay. He said Republicans “are being very deliberate” in their approach, while Biden “dragged his feet on getting us a budget.” Biden’s budget was submitted a month late, on March 9.
While the Budget Committee remains coy about its timeline for releasing a budget, the Republican Study Committee — the largest bloc of House conservatives — plans to put out its own plan the week of April 17.
Rep. Ben Cline, who chairs the RSC’s Budget and Spending Task Force, said the group’s budget will include many policies it has proposed in previous years’ budgets.
But the blueprint will be “modernized” with deeper cuts “to reflect the fact that this administration and [former Speaker] Nancy Pelosi jacked up the debt by $7 trillion, and it’s much harder to get to balance in 10 years than it once was,” the Virginia Republican said in a brief interview.
“The nondefense discretionary [funding] must take an even bigger hit,” Cline said. “If you’re going to either hold defense harmless or give our men and women in uniform the raises that they deserve and give it a slight bump to reflect inflation, then you have to go below the [fiscal] ’22 numbers for nondefense discretionary. And for many of those programs, there’s a zero next to the program number.”
Cline said the cuts will target “the woke and weaponized government” that Democrats have put into the budget in recent years and be “something that all Republicans and most independents can get behind.”
The RSC budget will also offer mandatory spending changes, like instituting work requirements for some programs and rolling back parts of the Obama administration’s 2010 health care law, including its Medicaid expansion. “We’re not gonna touch Social Security or Medicare for current or near future recipients,” he said.
Short-term bill?
Oklahoma Rep. Tom Cole, a senior GOP appropriator and chair of the Rules Committee, said party leaders have had discussions about passing a short-term debt limit bill to align with the Sept. 30 end of the fiscal year deadline for Congress to pass appropriations bills.
“It’s probably a pretty good negotiating tactic for” McCarthy, Cole said.
Other Republicans said they’ve not heard discussions of a short-term debt limit bill but see value in passing something reflecting the conference’s position.
“I think we need to send over what we think ought to be part of the debt limit and let the Senate respond and let the Biden administration respond,” said Rep. Gary Palmer, R-Ala., who as the conference policy chair is part of the GOP leadership team.
Republicans are also eyeing the debt limit as a way to achieve other policy priorities. Palmer, for example, wants to see changes to energy laws and regulations, like a permitting overhaul, among the measures Republicans try to attach to the debt limit increase.
House Natural Resources Chairman Bruce Westerman, R-Ark., said Republicans should seek energy policy changes as part of a debt limit deal. “When we produce energy here at home, that’s a huge economic driver, and it would mean more revenue to the federal government, especially if we’re coming off of federal land,” he said.
Westerman is a lead cosponsor of the energy legislation on the House floor this week that would make it easier to greenlight infrastructure projects and develop oil, gas and mineral resources, and more.
McCarthy has floated energy and border security overhauls as two policies that would produce economic growth and should be part of the debt limit conversation.
Texas GOP Rep. Tony Gonzales, whose district includes a large swath of the southern border, said it’s up to McCarthy whether to push for border security measures on the debt limit.
But he said he has “a long way to go” before he can support the border security package Republicans are currently putting together, with plans for committee markups the week of April 17. Gonzales earlier Wednesday tweeted his opposition to a debt limit bill if GOP leaders bring “anti-immigrant” bills to the floor.
Gonzales opposes a bill from fellow Texas Republican Rep. Chip Roy that would give the Homeland Security Department broad authority to turn away migrants in an effort to ensure it has operational control of the border, saying he feels it undermines the legal asylum process. He said he’s also worried about other provisions that are being considered outside of the Roy bill having the same effect.
“I want a border security package … that does not attack legal routes for people to come over and isn’t un-Christian,” Gonzales told reporters.
Prioritizing payments
Meanwhile, House Ways and Means Republicans want to see the debt prioritization measure they marked up earlier this month come to the floor as well. The bill would direct the Treasury Department, in the event of a debt limit breach, to prioritize certain obligations, like making payments to bondholders and Social Security and Medicare recipients, over others, like paying members of Congress.
“We think that that’s part of the conversation,” said Rep. Drew Ferguson, R-Ga. “I think we can show that we’re not going to default on our debt. But I think we also can see that there’s a lot of stuff we spend money on that — you know what — America will probably be fine if we don’t waste money on it.”
As Republicans debate their next move on the debt limit, Rep. Austin Scott, R-Ga., blamed Biden and the congressional leaders who negotiated the fiscal 2023 omnibus spending law for taking “a political shot at Kevin McCarthy” by not including a debt limit increase in that measure.
“In December, when Joe Biden signed the omnibus bill, we were at 99.89 percent of the statutory [limit],” he said. “They could have put one sentence in that piece of legislation that changed the statutory debt limit of the United States.”
And on a busy day of hearings Wednesday, Federal Reserve Chair Jerome H. Powell visited the Republican Study Committee’s lunch meeting, speaking to the group about inflation and the agency’s review of recent high-profile bank failures.
RSC Chairman Kevin Hern, R-Okla., said Powell said Congress should work to get its spending to at or below its revenue but did not discuss the debt ceiling directly.
“He said debts matter, deficits matter,” Hern said.
Aidan Quigley contributed to this report.
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