McCarthy seeks to calm debt ceiling waters
Speaker seeks talks with Biden before debt ceiling is reached
Speaker Kevin McCarthy wants to negotiate spending cuts in exchange for lifting the debt ceiling, but he said Thursday that Republicans wouldn’t risk the government not being able to pay its bills.
"We don't want to put any fiscal problems to our economy and we won't," the California Republican said at his first weekly news conference as speaker. “But fiscal problems would be continuing to do business as usual.”
McCarthy said, for example, under former President Donald Trump’s administration Republicans negotiated a two-year budget caps and debt ceiling deal with a Democratic-controlled House.
However, that 2019 deal was actually to prevent budget caps enacted during 2011 negotiations on the debt limit from taking effect. The Trump administration and Democrats agreed to avoid a $125 billion decrease in discretionary spending set to begin in fiscal 2020, with $77.4 billion in offsets, and suspend the debt ceiling through July 2021.
What McCarthy and Republicans are now looking to do is the opposite — negotiate a deal that would cut discretionary spending from the current fiscal year. They’ve already agreed internally to write a budget resolution that would cap next year’s spending at fiscal 2022 levels and write House appropriations bills to fit under those caps.
"We've got to change the way we are spending money wastefully in this country,” McCarthy said. “And we’re going to make sure that happens."
McCarthy, asked a follow-up question, said a budget caps deal may not be Republicans’ demand on the debt limit. He said he was just laying out what happened the last time a divided government negotiated on the issue.
The Treasury Department is expected to announce soon that it is running up against the $31.4 trillion statutory debt limit. As of Tuesday, it was just $59 billion away. But Treasury can dip into its tool chest of “extraordinary measures” to stay under the limit, likely buying lawmakers several months of time before they need to act.
McCarthy, however, said he wants to get negotiating with President Joe Biden on the matter before the deadline comes due.
"I had a very good conversation with the president when he called me,” McCarthy said, referring to a congratulatory call Biden placed to him after he was elected speaker. “And I told him I’d like to sit down with him early and work through these challenges."
Separately, McCarthy was asked during the news conference if Republicans are interested in pursuing an overhaul of mandatory spending, or entitlement, programs this Congress. He answered the question by first noting that discretionary spending increased 30 percent over the past four years Democrats controlled the House, saying, “We’ve got to get our House in order.”
McCarthy went on to pledge not to touch key benefits under some of the biggest mandatory spending programs, but he didn’t rule out any changes to entitlements.
"The one thing I will tell you as Republicans, we will always protect Medicare and Social Security,” he said. “We will protect that for the next generation going forward. But we are going to scrutinize every single dollar spent."