Conservative Revolt Paralyzes House

Conservative Revolt Paralyzes House

The hardliners' revolt against McCarthy extended to a second day.
By Yuval Rosenberg and Michael Rainey
Wednesday, June 7, 2023

Good evening from a smoky New York, where the sky went from gray to yellow to orange on Wednesday and the air quality was worse than it has ever been as the result of Canadian wildfires. Here’s what we’re watching through the haze.

House Conservatives, Angry at McCarthy’s Debt Deal, Continue Their Revolt

A group of hardline conservatives continued their revolt against Speaker Kevin McCarthy on Wednesday, blocking action on the House floor for a second straight day in protest against McCarthy’s deal with the White House to raise the debt limit.

The 11 rebels, mostly members of the Freedom Caucus, have taken advantage of their power in the narrow 222-212 Republican House majority to prevent bills backed by party leaders from advancing. That has brought legislative action in the chamber to a halt.

The hardliners argue that McCarthy’s deal with President Joe Biden failed to cut spending to the levels the speaker had promised and accuse party leaders of retaliating against a member who voted against the deal.

“House Leadership couldn’t Hold the Line. Now we Hold the Floor,” Republican Rep. Matt Gaetz of Florida tweeted on Wednesday, a day after the unexpected conservative uprising led to a failed procedural vote on some Republican bills — the first time since 2002 that a rule failed on the House floor.

“I feel blindsided,” McCarthy told reporters Wednesday morning, adding that a handful of people can create problems. But, he said of the rebels, “you’re not going to get 100% of what you want — so you can’t take hostages.” Democrats will surely find that comment rich.

McCarthy dismissed any concern about his job. “We’ve been through this before. We’re the small majority,” he said. “You work through this and you’re going to be stronger.”

A push for deeper spending cuts? McCarthy denied reneging on a promise to conservatives regarding spending levels. "We never promised we're going to be all at '22 levels,” he told reporters, according to Roll Call. “I said we would strive to get to the '22 level or the equivalent ... amount of cut. We've met all that criteria.”

Still, the speaker suggested that future spending levels could be set at levels below the caps in his deal with the White House. “Whenever you put a cap, that’s the ceiling,” he said. “We can always spend less. I’ve always advocated for spending less money.”

It’s not clear, though, just what McCarthy might do to end the standoff. “Complicating the path to a resolution, the conservatives don’t appear to have a ready list of demands that might break the impasse,” The Hill’s Mike Lillis reported Wednesday afternoon. “Some have suggested they want the power to amend every bill that hits the floor. Others have suggested they want to revisit all the concessions McCarthy made in January, to make them more rigid. And still others suggested their problems with the Speaker are more fundamental than any structural changes could fix.”

Why it matters: The conservative’s blockade highlights the depth of their displeasure over McCarthy’s deal even if they have not yet moved to oust the speaker. Their revolt also “diminishes hopes that the debt-limit deal might be a template for more legislation drawing together both parties’ moderate wings,” Bloomberg’s Billy House writes.

Pence Joins 2024 Race Calling for Fiscal Conservatism and Entitlement Reform

Former Vice President Mike Pence launched his bid for the 2024 Republican presidential nomination on Wednesday, using a speech in Ankeny, Iowa, to try to make the case for his brand of conservatism and to draw distinctions between himself and other GOP candidates — particularly, his former boss, Donald Trump.

Pence’s pitch centered on the need for Republicans to return to pre-Trump conservatism, including “a strong national defense, fiscal responsibility and traditional values.” Pence hammered Trump as soft on abortion, Russia and the national debt. He argued that Republicans must “resist the politics of personality and the siren song of populism unmoored to conservative principles.” Pence told the crowd he’s a Christian, a conservative and a Republican, “in that order.” He said that, while he’s proud of his record as part of the Trump administration, the former president was wrong to pressure him to try to overturn the results of the 2020 election and reckless in fueling the Capitol riot on January 6, 2021.

“The American people deserve to know that, on that day, President Trump also demanded that I choose between him and the Constitution,” Pence said. “Now voters will be faced with the same choice. I chose the Constitution, and I always will.”

Pence said that the Republican Party must be the party of the Constitution and that Trump had disqualified himself from the presidency. “I believe that anyone who puts themselves over the Constitution should never be president of the United States, and anyone who asks someone else to put them over the Constitution should never be president of the United States again,” he said.

A big bet on entitlement reform: As part of his emphasis on fiscal conservatism, Pence touted his past fights against “big spenders” and pledged to extend the Trump tax cuts, put the nation on a path to a balanced budget and address what he called a debt crisis that threatens America’s children and grandchildren.

Yet in his call for fiscal conservatism and his embrace of the Trump administration’s record, Pence left unmentioned “the inconvenient fact that the Trump-Pence administration added around $8 trillion to the national debt,” Jonathan Swan writes in The New York Times. “So much for fiscal conservatism.”

As Swan also notes, Pence is the only major candidate calling for cuts to Social Security and Medicare, embracing a platform that many other Republicans have shied away from recently — and that Trump has rejected in his rhetoric if not in his actual policies since he first ran for the presidency.

“The biggest drivers of our runaway spending are our New Deal and Great Society programs, upon which Americans depend every day — Social Security and Medicare,” Pence said Wednesday, arguing that if those entitlements are “left unchecked and unreformed, they’ll mandate cuts in programs upon which people depend.” Worse still, he said, if the programs are left as is, the national debt will grow dramatically in 25 years “and crush the future of the American economy and opportunities for our children and grandchildren.”

Pence said that Trump and President Joe Biden have taken the same position on entitlement reform. “Both of them refuse to even talk about the issue, take it to the American people,” he said, arguing that they are putting their political fortunes ahead of the country’s future. “As your president, I promise you, I will tell the American people the truth about our debt crisis and we will offer common-sense and compassionate reforms to save these programs for seniors today and give young Americans a better deal tomorrow.”

Biden has proposed higher taxes on the rich to help extend Medicare’s solvency and has pledged to protect both Social Security and Medicare. Trump, meanwhile, has warned Republicans to avoid cuts to Social Security and Medicare in the recent debt ceiling fight and has attacked Florida Gov. Ron DeSantis, a rival for the GOP nomination, as a “wheelchair over the cliff kind of guy” for supporting changes to Medicare.

Why it might matter: Wealthy North Dakota Gov. Doug Burgum also announced a presidential bid on Wednesday. With former New Jersey Gov. Chris Christie entering the race on Tuesday, the GOP field now totals 10 candidates. Pence may be the most conservative of the lot. His candidacy will set up a high-profile clash with Trump — and might test the degree to which his conservative positions appeal to a Trumpian GOP. On the other hand, political analysts and news outlets generally dismiss the notion that there’s a lane for Pence in the Republican race. “No one cares about Mike Pence,” one Wednesday headline declared.

Quote of the Day

“The stakes of the 2024 election are enormous, not just for our democracy, but for domestic policy. So many major pieces of legislation over the last several years expire in 2025. So the winners of the next election will have the ability to shape policy for the rest of the decade.”

— Rep. Brendan Boyle, the top Democrat on the House Budget Committee, speaking to NBC News about the policy battles that await lawmakers in 2025. The issues include the return of the debt limit, which comes back into effect in January 2025; the expiration of the tax cuts for individuals created by the 2017 Tax Cuts and Jobs Act; the expiration of the current $10,000 cap on state and local income tax deductions; the return of the “subsidy cliff” for some Obamacare users; and a proposed minimum income tax for corporations.

“It's not just the debt ceiling, which is more likely to be contentious if Biden wins re-election,” says NBC’s Sahil Kapur. “The party that controls Congress and the White House will set the agenda on consequential issues that will shape the next decade of tax, spending and health care policy in the first year of the new term.”

Chart of the Day: Factories Go Boom

“America is undergoing a factory construction boom,” says former Obama administration official and “Morning Joe” regular Steven Rattner, who highlights a surge in industrial construction that some economists are attributing to the Biden administration’s aggressive support for manufacturing.

Economist Noah Smith says the big jump in factory construction suggests that industrial policy, which many have seen as outdated, is having a positive effect. “How can we know if industrial policy is working? Well, one way would be if we actually start making more of the stuff that industrial policy tries to produce — more solar panels, semiconductors, electric cars, and so on,” Smith writes. “But it takes time to ramp up production, so in the meantime, we can look at how many factories are being built to make these things. And here, the U.S. seems to be getting pretty immediate and impressive results! Inflation-adjusted construction spending in the manufacturing industry has absolutely skyrocketed since June 2022, from $90 billion to $189 billion. That’s an incredible amount. Factory construction spending more than doubled in one year, after being essentially constant for decades. And it perfectly lines up with the passage of the CHIPS Act in July 2022 and the Inflation Reduction Act in August 2022.”

Economist and New York Times Columnist Paul Krugman notes that the evidence indicates that the approach taken by President Biden’s predecessor, which focused on tax cuts and tariffs, did not work. “The Trump tax cut of 2017, which was sold as a way of promoting U.S. investment, didn’t have any visible effect,” Krugman writes. "Neither did the trade war, which kicked off in earnest in mid-2018. But under Biden, manufacturing construction, as some people put it, has gone parabolic, more than doubling just over the past year.”


A Plan to Tax Countries With Loose Environmental Standards

A bipartisan pair of senators introduced a bill Wednesday that aims to lay the groundwork for the first carbon border tax on imports from countries that fail to follow the kind of environmental rules that apply in the U.S. — most notably China.

Sens. Chris Coons, a Democrat from Delaware, and Kevin Cramer, a Republican from North Dakota, announced the Providing Reliable, Objective, Verifiable Emissions Intensity and Transparency (PROVE IT) Act, which would direct the Department of Energy to compare the “emissions intensity” of certain industrial goods produced in the U.S. and overseas, creating a dataset that could be used to impose import taxes on dirty manufacturers while leveling the playing field for American producers.

“American manufacturers abide by some of the cleanest production standards in the world, and U.S. production is widely regarded as cleaner and more responsible than our competitors,” Coons’ office said in a statement. “The PROVE IT Act would obtain high-quality data to back up this claim up by determining the emissions intensity of domestically produced goods like steel, cement, glass, and aluminum, compared to those around the globe.”

Coons told The Washington Post’s Maxine Joselow that his long-term goal is to create a “carbon club” of nations that have adopted more stringent environmental rules, a group that could include the U.S., the European Union, the United Kingdom, Canada, Mexico, Japan, South Korea and Australia.

Meanwhile, Coons hopes to build support for a carbon designed to help U.S. firms, despite Republican resistance to carbon taxes as a rule. “China’s sort of an easy target,” Cramer told the Post. “They are the ones producing cheap stuff. But there are other players besides China that are dirty producers taking advantage of our system.”

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