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McCarthy, House Republicans reframe debt limit strategy

Only reference to ‘cut’ in McCarthy speech was to say Social Security, Medicare cuts are ‘off the table’

Speaker Kevin McCarthy holds a news conference in National Statuary Hall in the Capitol on Feb. 2.
Speaker Kevin McCarthy holds a news conference in National Statuary Hall in the Capitol on Feb. 2. (Bill Clark/CQ Roll Call)

House Republicans have started downplaying their desire to cut spending in conjunction with lifting the debt limit, seeking to reframe their strategy as targeting “waste” and finding “efficiencies.”

Speaker Kevin McCarthy delivered a speech Monday evening from a corridor outside his office known as the “speaker’s balcony hallway,” in which he described the national debt as “the greatest threat” to the nation’s future.

But not once did McCarthy say Republicans would “cut” spending. The only time he used that word specifically was to say: “Cuts to Medicare and Social Security, they’re off the table.”

Instead, the speaker referenced “wasteful Washington spending” at least three times in his 10-minute remarks and reiterated his oft-used refrain about seeking a “responsible” solution to the need to lift the debt limit.

“We must move towards a balanced budget that insists on genuine accountability for every dollar we spend. Future generations deserve nothing less,” McCarthy said. “A responsible debt limit increase that begins to eliminate wasteful Washington spending and puts us on a path towards a balanced budget is not only the right place to start, it’s the only place to start.”

McCarthy’s remarks served as a prebuttal of sorts to President Joe Biden’s Tuesday State of the Union address. Biden is expected to call out Republicans for trying to put the full faith and credit of the United States in doubt.
‘Constitutional obligation’

National Economic Council Director Brian Deese told reporters Monday that the president will highlight “this bedrock idea … that the United States has met all of its financial obligations for its existence as a country isn’t something that anybody should be using as a bargaining chip.”

“It’s not a negotiable item,” Deese said. “It’s Congress’ constitutional obligation.”

But Deese also said the president was eager to discuss deficit reduction in the context of other White House priorities.

“You’ll hear an openness and in fact, an eagerness to have a real serious conversation about the fiscal and economic priorities of the country and where we can find common ground on things like lowering costs for families, on things like how do we keep investing in the country and creating more manufacturing jobs,” Deese said.

McCarthy reiterated in his speech that Republicans want to negotiate around the debt limit. He said they are not trying to create an economic crisis in doing so but seeking to prevent one.

“Defaulting on our debt is not an option,” he said. “But neither is a future of higher taxes, higher interest rates and an economy that doesn’t work for working Americans.”

House Budget ranking member Brendan F. Boyle, D-Pa., said in a statement that the American people “learned nothing new” from McCarthy’s speech, as Republicans continue to “choose reckless brinkmanship over responsible governance.”

“Let’s be crystal clear: refusing to pay the bills is never fiscally responsible,” he said. “Threatening to unleash economic catastrophe if you don’t get what you want is never fiscally responsible. Sacrificing millions of American jobs and undermining our economic strength abroad is never fiscally responsible.”

Other Democrats have homed in on GOP rhetoric about popular entitlement programs like Social Security and Medicare. Although McCarthy has said cuts to those programs are off the table, his members are still eyeing proposals to make their trust funds solvent without compromising benefits.

“They’re targeting the Medicare and Social Security benefits that middle class families pay in to earn their whole lives, then turning around and giving tax handouts to big corporations,” White House spokesperson Andrew Bates said in a statement. “The American people want more jobs and lower costs, not a death panel for Medicare and Social Security.”

The GOP has launched a preemptive defense in the media that seeks to reframe their campaign to cut spending to something that sounds more politically palatable.

“The focus seems to be on cuts. It should be about efficiencies,” House Majority Whip Tom Emmer, R-Minn., said on Fox Business Monday. “It should be about looking at waste. It should also be looking at the future when we talk about the programs that matter most. Let’s put this thing on a path to sustainability. When you’re spending $1.29 for every dollar you’re bringing in — that’s not sustainable, and it’s not responsible.”

Emmer said House Republicans plan to release their budget blueprint within six weeks of Biden releasing his on March 9. “We will follow suit and follow the rules,” he said, referring to the April 15 statutory deadline for Congress to complete a budget.

While Republicans have touted various plans to balance the budget in seven to 10 years, McCarthy told reporters Monday he has no specific time frame in mind yet. He did vow that Republicans will not propose any tax increases, which will require more onerous spending cuts to achieve balance.

House GOP leaders have been intentionally vague about how they want to decrease spending, as they have just begun conversations with their conference about potential proposals the party could unify around. Congress will have until at least June to act, as Treasury is using so-called extraordinary measures to avoid breaching the statutory borrowing limit.

Coalescing around a position that can pass the House under Republicans’ slim four-seat majority — which can fluctuate based on attendance — will be no easy task, especially with most Democrats unlikely to lend a hand for anything but a “clean” debt limit increase.

But some Republicans have argued there’s “low-hanging fruit” that their leaders could start talking about now, rather than leave the GOP position up for interpretation and exacerbation by Democrats looking for lines of attack.

“There’s unspent COVID money. There’s this massive amount of money to spend on IRS agents that’s completely unnecessary,” Rep. Daniel Crenshaw said in a brief interview last week. “It’ll never get spent anyway, so we might as well just take it back.”

The Texas Republican argued his party should start talking more about ideas like those without having to detail their full plan.

“There’s some pretty obvious things that we could say that we’re for without getting into specifics,” Crenshaw said. “These negotiations do need to be ongoing and this limit doesn’t expire until June. So there’s time, but some basics would be OK.”

Ways and Means Chairman Jason Smith also mentioned clawing back unspent pandemic aid as an option in a Fox News interview Sunday.

“We can cut $100 billion in unobligated COVD money,” the Missouri Republican said. “There is so much waste out there. . . . We do need to look at everything though.”

As of November 2022, about $157 billion in funds remained unobligated, or not committed from various COVID-19 relief laws, Gene L. Dodaro, U.S. comptroller general, estimated during a House Oversight and Accountability Committee hearing Feb. 1.

Niels Lesniewski, Aidan Quigley, David Lerman and Paul M. Krawzak contributed to this report.

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