House Republicans' Next Big Fight

House Republicans' Next Big Fight

Reuters/Evelyn Hockstein

As messy and dramatic as it was, last week’s lengthy fight over the House speaker’s gavel was supposed to be the easy part.

Now, newly elected House Speaker Kevin McCarthy (R-CA) is poised to face his next test. With members having finally been sworn in, the House is set to vote Monday night on its first order of real business: adopting a rules package laying out how the 118th Congress will operate. After that, Republicans will look to repeal billions in new funding for the Internal Revenue Service provided by Democrats last year.

As you might expect, there could be more drama ahead.

McCarthy won the speaker’s gavel late Friday night after making a host of concessions to the hardline conservatives who had been withholding their support. "I ran out of things I could even imagine to ask for," Rep. Matt Gaetz (R-FL), one of the holdouts, told CNN. Those concessions could raise the chances of risky budget and debt battles over the coming year. Already, they have spurred some grumbling from moderates. Rep. Tony Gonzalez (R-TX) said he will vote against the rules package, and Rep. Nancy Mace (R-SC) told CBS News’s “Face the Nation” on Sunday that she is “on the fence” about it given the secretive dealmaking that created it.

“I like the rules package. It is the most open, fair, and fiscally conservative package we've had in 30 years,” she said. “I support it, but what I don't support is a small number of people trying to get a deal done or deals done for themselves in private, in secret, to get a vote or vote present. I don't support that.”

The Republican majority’s new rules: The rules package includes some significant changes. Perhaps most notably, it restores the power of any single member to force a vote to oust the speaker — a change that could weaken McCarthy and result in instability for the House.

The package also includes a number of fiscal measures meant to reduce federal spending and forestall tax increases.

* A switch from PAYGO to CUTGO: The GOP rules replace the pay-as-you-go (PAYGO) requirements used by the last Congress, which call for any increase in mandatory spending or reduction in revenues to be offset by other spending cuts or revenue increases. The new rules would switch to “cut as you go,” or CUTGO, which would prohibits net increases in mandatory spending over a five- or -ten-year budget window and nix the use of revenue increases to offset new spending.

* An increased threshold for approving tax rate increases: The GOP rules would require a three-fifths supermajority to approve any increase in tax rates.

* Eliminating an automatic increase of the debt limit: The GOP rules would strike what’s known as the “Gephardt rule,” a provision named for former Democratic leader Dick Gephardt of Missouri, which tied automatic debt limit increases to the passage of a House budget resolution. The Republican change would mean that a debt limit increase would have to come via a separate vote.

* The use of dynamic scoring: Republicans want to restore a rule they have enacted in the past requiring the Congressional Budget Office and Joint Committee on Taxation to factor in macroeconomic feedback effects into their analyses of legislation.

Setting up future fights: The rules package does not actually contain some of the most important concessions McCarthy made to conservatives, such as a commitment to pursue a budget that would balance within 10 years and cap spending at fiscal 2022 levels. McCarthy reportedly also agreed to require spending cuts in exchange for any increase in the federal government’s debt limit, a hike that will be needed later this year.

Punchbowl News reported Monday morning that some of those promises are laid out in a separate, secret three-page addendum to the 55-page rules package. “This pact includes the most controversial concessions McCarthy made in order to become speaker – three seats on the Rules Committee for conservatives, freezing spending at FY2022 levels, a debt-ceiling strategy, coveted committee assignments and more,” Punchbowl said.

The commitment to cut spending to 2022 levels would mean cuts of more than $130 billion from the recently passed omnibus spending bill for fiscal year 2023, including potentially steep cuts to the defense budget, which most Republicans and many Democrats will likely oppose. Non-defense programs would also face massive cuts. The combined package would seem to have little chance of passing the Senate, making the votes even trickier for some House moderates.

“The deal, if it holds, would largely impose the balanced-budget blueprint that former President Donald Trump’s budget director, Russ Vought, drafted and shopped to conservative lawmakers last year,” Roll Call reports. “It purports to cut some $10 trillion in projected spending over the next decade while producing a slight surplus in the final year — all while making room for $3.3 trillion in tax cuts. Complicating matters is that two of the largest pots of federal dollars, Social Security and Medicare benefits, would be spared the ax, leading to bigger cuts across every other program.”

The GOP plan calls for $4 trillion in cuts from projected health care spending and another $2 trillion from programs including food stamps, child nutrition, student loans and agricultural price supports, Roll Call says.

At the same time, the debt ceiling hike that will be needed in a matter of months now appears even more likely to prompt a dangerous showdown — or put McCarthy’s speakership in peril. When asked if he would look to oust McCarthy if the speaker allowed the House to pass a clean increase in the debt limit, Rep. Chip Roy (R-TX) told CNN: “I’m not going to play the what-if games on how we’re going to use the tools of the House to make sure that we enforce the terms of the agreement. But we will use the tools of the House to enforce the terms of the agreement.”

The White House insists it won’t negotiate over the debt limit. “Congress is going to need to raise the debt limit without — without — conditions and it’s just that simple,” Press Secretary Karine Jean-Pierre told reporters Sunday. “Attempts to exploit the debt ceiling as leverage will not work. There will be no hostage taking.”

‘Just totally unrealistic’: The GOP hardliners’ budget demands are the stuff of fantasy, even according to experts whose jobs involve pushing for deficit reduction and a sustainable fiscal path.

“Their specific ask of balancing the budget in 10 years is just totally unrealistic. It would take $11 trillion in savings,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, told The New York Times.

“I want to save more money than a lot of people,” she said. “But what they’re demanding is just not achievable.”

The bottom line: Republicans hoping to push the rules package through can again afford to lose just four votes if Democrats remain united in opposition. The rules are likely to be adopted … and set up plenty of showdowns this year.