Cut Spending or Increase It? Americans Say Yes

Cut Spending or Increase It? Americans Say Yes

Biden tried to turn the tables on McCarthy
By Yuval Rosenberg and Michael Rainey
Wednesday, March 29, 2023

Happy Wednesday! Here’s your fiscal update.

Biden Rejects McCarthy's Debt Limit Meeting Request

It’s been nearly two months since President Joe Biden and House Speaker Kevin McCarthy met in the Oval Office to discuss raising the nation’s debt limit. McCarthy, the California Republican, sent Biden a letter Tuesday pressing for another meeting, writing that the president and his team “have been completely missing in action on any meaningful follow-up to this rapidly approaching deadline.” Biden, McCarthy said, is “on the clock.”

Biden responded in kind yesterday evening, essentially saying that it’s McCarthy who’s on the clock.

In a letter to the speaker, Biden again called on Congress to increase the debt limit without conditions and said that any discussion of the nation’s fiscal outlook should happen after Republicans have released their budget. “My hope is that House Republicans can present the American public with your budget plan before the Congress leaves for the Easter recess so that we can have an in-depth conversation when you return,” Biden wrote. “As I have repeatedly said, that conversation must be separate from prompt action on the Congress’ basic obligation to pay the Nation’s bills and avoid economic catastrophe.”

Biden said GOP proposals thus far “are skewed to the same constituencies who should be paying more, like multinational corporations and the richest taxpayers.” He argued that it was important to see Republicans’ “full set of proposals” so that the negotiators could understand the “full, combined impact on the deficit, the economy, and American families.”

Republicans said Biden’s response was just political posturing, with some noting that Democrats hadn’t passed a budget when they controlled the House. “Democrats didn’t produce one for the last four years. They never passed one out of the Budget Committee. They would ‘deem’ their budget every year. So now we have to have a Republican budget?” Rules Committee Chairman Tom Cole (R-OK) said, per NBC News.

What’s next: Lawmakers are set to leave town after tomorrow, returning April 17, and Republicans won’t be issuing their budget plan before they head out. They also aren’t expected to meet the April 15 statutory deadline for a fiscal year 2024 budget resolution.

In other words, the debt and budget talks are going nowhere.

Potentially complicating the path to any debt limit increase, McCarthy reportedly has had no direct contact with the White House about the debt limit since his meeting with Biden on February 1. NBC News reports that the two men “barely speak” to each other. And Axios adds that the lack of a GOP budget plan has opened the door for various Republican factions to try to exert some leverage over talks with the White House, further complicating McCarthy’s job. Members of the conservative Freedom Caucus, for example, said this week that they will introduce more than 500 pieces of legislation involving $1 trillion in cuts over 10 years.

Still, the speaker is likely to keep trying to draw Biden into debt talks even without a GOP budget. The White House has little incentive to jump in at this point. “That Biden appears in no rush to meet with McCarthy — three months before a potential debt default — suggests the White House believes it is playing a much stronger hand,” NBC’s Scott Wong and Peter Nicholas write. And Punchbowl News reports: “The White House and senior Democratic lawmakers are pretty certain they can beat Republicans down and force them to pass a clean debt-limit hike.”

Punchbowl adds that House Republicans are extremely unlikely to pass a budget before the debt limit deadline and that McCarthy may instead look to pass a debt limit increase with some budget savings attached. That would buy a few months’ time and put some pressure on Senate Democrats while still preserving the debt issue for the GOP.

The bottom line: With little progress on a debt deal, a challenging calendar and growing anxiety among lawmakers, Republicans reportedly may move to extend the debt limit and link it to the September 30 deadline to fund the government and avoid a shutdown.

Cut Government Spending or Increase It? Americans Say Yes

It seems that Americans are of two minds when it comes to government spending — and those two minds are wholly incompatible with each other.

On the one hand, a solid majority of 60% in a new AP-NORC poll said they think the federal government spends too much overall, with only 16% saying it spent too little and 22% saying it spent about the right amount. But when asked about specific types of spending such as education, Social Security and Medicare, equally solid majorities said the government is not spending enough.

On Social Security, for example, just 7% of respondents said the government is spending too much, while 62% said it was spending too little. On education, 65% said the government was spending too little, with roughly similar results for health care (63%), infrastructure (62%), assistance to the poor (59%), Medicare (58%) and border security (53%).

There was only one type of spending that a clear majority said the government was spending too much on: assistance to other countries, which drew the ire of 69% of respondents.

An impossible balancing act? The results underline the difficulties Republicans face as they struggle to produce a budget that cuts federal spending without touching major programs like Social Security and Medicare — and without upsetting voters. While cutting foreign aid would likely be popular, such spending accounts for less than 1% of the federal budget, offering little in the way of substantial savings.

The Washington Post’s Aaron Blake says the “problem for McCarthy and the GOP is that once you exclude these big-ticket items, it becomes virtually impossible to balance the budget or even come close to substantial cuts.” That problem may be one reason Republicans have failed to produce a budget so far.

“This poll shows why McCarthy would prefer this debate remain in the abstract, but at some point it will have to involve actual proposed cuts,” Blake writes. “And assuming the proposed cuts are actually substantial, they are very likely to give even the many Americans who think the government spends too much something to hate.”

The representative AP-NORC poll of 1,081 adults was conducted from March 16 to 20, with a margin of sampling error of plus or minus 4.0 percentage points.


House Budget Committee Focuses on ‘Fiscal State of the Union’

At a hearing dedicated to the “Fiscal State of the Union” held by the House Budget Committee Wednesday, experts from both sides of the aisle agreed that the U.S. faces significant fiscal challenges but differed on how lawmakers might go about improving the situation.

“The nation’s fiscal outlook is rapidly deteriorating,” House Budget Chair Jodey Arrington (R-TX) said in his opening remarks, placing much of the blame on “reckless spending” over the last few years. “Over the next decade, according to the nonpartisan CBO, our annual deficits will double, our interest payments will triple, and for every dollar we borrow, 50 cents will go just to paying interest on this debt.”

Arrington criticized the budget proposal delivered by President Biden earlier this month. “The president had the opportunity to set a new course and provide real leadership earlier this month with his budget proposal,” he said. “Instead, his vision calls for the highest levels of taxes, spending, and borrowing in the history of our country.”

Arrington called on lawmakers to slash spending as the primary means to restore a healthier fiscal balance. “We must rein-in the wasteful, woke, and bloated bureaucracy and the out-of-control spending that created it,” he said. “We must end the era of dependency for able-bodied adults, encourage labor force participation, and restore the dignity of work.”

Rep. Brendan Boyle (PA), the ranking Democrat on the committee, acknowledged the common ground between the parties on some issues. “We agree — our nation faces long-term fiscal challenges,” he said. “Our population, like most in the Western world, is aging. So health care, Social Security, and Medicare costs are rising. … And yes, deficits and debt are projected, especially in the next decade, to reach levels that simply none of us would be comfortable with.”

But as Boyle noted, there is less agreement on the solutions to the problem. “Republicans believe we can cut our way to a balanced budget,” he said. “That is not only false, it’s dangerous.”

“Analysis from the nonpartisan CBO proves this,” Boyle added. “An attempt to balance the budget without touching Social Security, Medicare, defense spending, veterans mandatory spending, and without increased revenues, would require eliminating every program, every service, and every investment Americans count on. In the end, it still wouldn’t balance the budget but it would gut government to the point society would no longer be able to function.”

Mark Zandi, chief economist at Moody’s Analytics, said he agrees that the country faces “significant long-term fiscal challenges,” and he called for Congress to address it through “both tax increases and government spending restraint.”

David M. Walker, a former Comptroller General of the United States and one of the conservative experts appearing before the committee, said that he thinks the federal government needs a mix of spending cuts and revenue increases. “We are out of control,” he warned.

His fellow conservative witnesses at the hearing, Scott Hodge of the Tax Foundation and John B. Taylor of the Hoover Institution, emphasized slashing spending. Among other ideas, Hodge called on U.S. lawmakers to eliminate “failing businesses enterprises” such as the Tennessee Valley Authority, Amtrak, the Corporation for Public Broadcasting and the U.S. Postal Service as part of an effort to shrink the government.

Watch the hearing here.

Quote of the Day: 'A Red Alert Moment'

“There is a plague afoot in our nation, a plague of drug addiction and death the likes of which this country has never witnessed before. There’s no one answer, but this budget better do everything humanly possible to stop the import of deadly fentanyl into the United States. This is a red-alert moment.”

Sen. Chris Murphy (D-CT), chair of the Senate Appropriations Committee’s Homeland Security panel, at a budget hearing Wednesday with Homeland Security Secretary Alejandro Mayorkas. The secretary told the subcommittee that the record number of Americans dying of fentanyl overdoses is the “single greatest challenge we face as a country.”

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