House Republicans chart new strategy to pressure Biden, Democrats

After being blocked for months by Democratic President Joe Biden’s insistence that they do it without restrictions, House Republicans will try to agree on a proposal to raise the $31.4 trillion debt ceiling and cut government spending when Congress returns this week.

In a Monday speech at the New York Stock Exchange, House Speaker Kevin McCarthy will outline Republican demands for debt ceiling negotiations with Democrats.

Republicans have advocated limiting spending growth to 1% for a decade, cutting regulation, and increasing energy production.

McCarthy’s sometimes-fractious caucus, which holds a 222-213 majority, has failed to pass anything. Before becoming legislation, Republicans would have to bargain with Biden’s Senate Democrats.

The White House, which leads Democrats’ debt ceiling strategy, has called Republican plans impossible.

If Congress doesn’t act, nonpartisan experts predict a historic federal default this summer. As in the 2011 debt stalemate, a default may devastate the U.S. and global economy and lower the U.S. credit rating.

After months of delay, McCarthy’s speech, which Republicans think would win Wall Street’s support for budget negotiations, may spur action. Biden insists that Congress pass a “clean” debt raise without conditions, pointing that Republican Donald Trump did so three times.

“At this point, I think there’s no choice for Republicans and the speaker but to bring forward some type of proposal,” Representative Tom Emmer, the No. 3 House Republican, told Reuters.

According to a source, conservatives plan to enact legislation by April to raise the borrowing limit until May 2024. That would set up a 2024 presidential campaign debt ceiling fight.

First, Republicans must agree on a plan that can win at least 218 of their 222 votes.

“Unifying us is difficult. I’m confident we’ll succeed. “We’ve been discussing this,” said Republican Representative Ben Cline.

Cline, a member of the House Freedom Caucus, serves on the House Budget and Appropriations Committees and is assisting the conservative Republican Study Committee, Congress’ largest caucus, create a budget.

RISKS
The White House has rejected the recommendations.

“Speaker McCarthy is adopting the extreme MAGA House Republican position: threatening our economic recovery, hardworking Americans’ retirement, and catastrophic default in order to force devastating cuts,” said White House spokesperson Andrew Bates.

House Republicans believe their plans would get enough public support to push Biden and the Democrats into negotiations, just as their bill to abolish the Washington, D.C., criminal code passed Congress last month despite Democratic opposition.

Since the administration has asked House Republicans to submit a budget proposal, Biden and McCarthy have not met since February.

The White House proposed a $3 trillion 10-year deficit reduction in March. Republicans now focus on the debt ceiling plan as the House Budget Committee is unlikely to produce a spending package soon.

Republican Representative Garret Graves, a prominent McCarthy adviser who has led Republican conference debt ceiling talks, said legislation may follow a March 28 McCarthy letter to Biden.

“We’re continuing to discuss both strategy and putting a little more meat on the bones or translating the speaker’s letter into legislation,” Graves said in an interview.

Republicans are considering a proposal to reset nondefense discretionary spending to fiscal 2022 levels, hold annual spending at 1% for a decade, reduce regulation, boost energy production, and reset the debt ceiling to a debt-to-GDP ratio. McCarthy’s letter provided few details.

Five Families
The Republican conference’s ideological caucuses are called “the five families,” a reference to “The Godfather” movies’ warring mafia factions.

The five families, who are expected to vote on the plan early next week, range from the bipartisan Problem Solvers Caucus, which has suggested working with Democrats to avoid default, to the hardline conservative House Freedom Caucus, which wants deep spending cuts and blames Biden for any default.