Tipsheet

McCarthy: We Won the Debt Ceiling Fight, and Democrats Got Nothing

Guy Benson
Guy Benson  |  May 30, 2023 10:05 AM

A little over a week ago, in my analysis about why President Biden and his party were losing the debt ceiling negotiations, I offered the following assessment: "The likeliest resolution to this standoff remains a last-minute deal struck between the White House and Speaker McCarthy, which will garner enough bipartisan votes to get through Congress. Conservatives and progressives will oppose it, but rank-and-file members will hold their noses and push the agreement through, with leaders on each side pointing to various details and concessions while declaring victory. The debt ceiling will be raised. Some form of very modest spending restraint will be imposed. And Washington will collectively head off toward the next regularly-scheduled fiscal cliff. We've seen movies like this before, so the outcome doesn't feel like a mystery." Fast forward a number of days, and here we are. Biden and House Speaker Kevin McCarthy announced a deal over the holiday weekend, and Congress is expected to take up the resulting bill prior to Thursday's deadline. 

Just as expectedly – because virtually all of the concessions were made by Democrats, whose "no negotiations, expect GOP failure" gambit failed – the political intrigue now shifts to how leaders in both parties will wrangle the votes to get the package passed. On the House side (a House-passed, Biden-blessed bill will likely pass the Senate with ease), a large chunk of votes will need to come from the Republican majority. McCarthy and company are positioning the document as a total win for their side, seeking to rally support from a large majority of their conference. These are the primary talking points: 

In a Wall Street Journal op-ed, McCarthy laid out the case for the House-approved bill that forced the president's hand, leading to the imperfect pact that was announced shortly thereafter. House Republican leadership has come out full bore for the agreement, unsurprisingly, and he's expecting most rank-and-file members to follow suit, despite certain reservations. The party's right flank is less impressed, though views are mixed. For instance, nobody will mistake Jim Jordan for a squishy moderate, and he's sounding upbeat about the "pretty darn good" bill.  Here's the editorial board of the Journal endorsing the agreement this morning:

The deal is a significant victory for GOP priorities, in return for raising the debt ceiling that had to be raised anyway. Mr. Biden tried to jam the GOP into a clean debt increase, but Republicans forced him to the table when they passed the Limit, Save, Grow bill. The lesson is that political unity pays. The deal lifts the current $31.4 trillion debt limit into 2025 while capping non-defense discretionary spending at $704 billion for fiscal 2024. That’s higher than the House GOP’s demand for a return to fiscal 2022 levels ($689 billion), though it’s a significant cut from the projected 2024 baseline of $757 billion. Both sides agreed to increase the veterans’ health share portion of this discretionary pot, so the cuts to other accounts will be greater and close to fiscal 2022 levels. The domestic discretionary cap will rise to $711 billion in fiscal 2025, a 1% increase...

The GOP resisted the Democratic demand for parity between defense and social-welfare spending...The deal includes relatively small gains on work requirements for welfare programs...divided government requires compromise and, as the 2011 debt-limit deal showed when future spending caps were broken, no Congress can bind a future Congress...McCarthy won the showdown with Mr. Biden over domestic discretionary spending by picking politically popular ground to fight on and then rounding up 218 votes to give his negotiators leverage. Assuming the deal passes Congress, it will defy the Democratic narrative that Republicans can’t govern. Mr. McCarthy’s troops are proving they can, and conservatives would be foolish to abandon the victories in this deal.

McCarthy is also touting praise for the deal from various members, former Speaker Newt Gingrich, conservative economist Stephen Moore, and the New York Post's editors.  On the other hand, several prominent conservatives are blasting the plan, or at least dousing it in cold water – noting that it raises the debt ceiling into early 2025, taking the issue off the table until after the next election: 

This thread goes to many of these objections, including updates after text was released: 

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Chip Roy tweeted his agreement that upon further review, the bill is "actually worse" than imagined. He's a no, for reasons laid out here. Others will certainly be with him.  The fact that someone like Nancy Mace has also come out swinging as a 'no' might be a worry for House Republican whip counters. Presidential candidate Ron DeSantis is also sounding very cool on the idea, pointing out that the deal doesn't alter the trajectory of the country "careening toward bankruptcy."  Elsewhere on the GOP spectrum, some defense hawks like Lindsey Graham are attacking the bill as a "catastrophe" that "gut[s] our national security apparatus." Across the aisle, Democrats have been angrily griping about the collapse of the White House "clean hike" posture, many insisting that Biden violate the constitution and attempt to raise the debt limit unilaterally. They wanted zero concessions, and they're now facing a raft of them. Many on the left are furious that these concessions exist, while some on the right are appalled that they're so meager, in their view. Are Democrats now pulling an about-face trying to spin this as a relative win for their side? 

Ayes from Democrats will be necessary to get this through the House; maybe quite a few of them.  I'd be surprised to see universal Democratic support for this bill.  A lot of their members are upset with the result of these discussions. This is all an internal spin war now. McCarthy and Republicans got their act together, called the Democrats' bluff, and ended up embarrassing them. The Democrats' playbook was blown up as soon as the House passed its own bill, packed with reasonable proposals and popular provisions. In divided government, which is what the people voted for last fall, unsatisfying legislative sausage gets made. Having listened to some of the arguments on each side of the center-right debate over the agreement, it seems to me like it's not the lopsided, total victory McCarthy and his allies are presenting, but it's also not the capitulatory debacle that the loudest critics are claiming. It's...basically what I expected it to be, although some of this ambiguity is concerning: 

Whether the agreement could have been more aggressive, while still keeping the GOP coalition together and getting Biden to sign off, is hard to say.  McCarthy clearly thinks not.  All it would take is a few peel-offs from anxious moderates to give House Democrats the opportunity to win a "discharge petition" vote and torpedo everything the GOP negotiators worked for. And while McCarthy's margin for error on passing party-line legislation is very narrow, if a substantial number of Democrats are going to back a Biden-supported deal, the math looks different (if unclear).  If Republican support crumbles, Democrats may withhold votes to create a political problem for McCarthy. Of course, the best way to have empowered Republicans to strike a harder-line bargain under these circumstances would have been to win quite a few more House and Senate races last year. Instead, the GOP blew a slew of winnable races with unpalatable candidates, and the result is a very closely-divided stalemate, with each side wielding limited leverage. I nevertheless think McCarthy can lay a claim to a modest victory here – which is impressive, relative to expectations and recent history on this front, but decidedly underwhelming in the broad scheme of things. Overall, I tend to mostly agree with this view, cynical as it may be: 

As a reminder, the national debt has approximately doubled since the debt ceiling showdown of 2011. Everything under discussion is tinkering at the edges. Mandatory spending on our massive, soon-to-be-insolvent entitlement programs must be reformed for rising generations. That's a mathematical reality. But the political will to touch those issues is spotty at best on the Republican side, and nonexistent on the Democratic side. And finally, once more: It's a spending problem, not a revenue problem.