Wimps

GOP leaders blink, make last-minute changes to debt bill

After a week of internal sniping, House Republicans on Wednesday approved legislation in a 217-215 vote that would slash federal spending and extend the government’s borrowing authority into next year.

The package has no chance of becoming law in the face of opposition from the Senate and White House, both of which are controlled by Democrats, but it nonetheless represents a hard-fought victory for Speaker Kevin McCarthy (R-Calif.) and his leadership team.

McCarthy and his conference have demanded budget-cutting negotiations with President Biden in return for raising the debt ceiling and now have specific policy proposals — and more political leverage — heading into that fight. 

Here are five takeaways.

McCarthy squeaks out another win

In an important sense, Wednesday’s vote marked a victory for McCarthy in his first real legislative test, proving he and his leadership team can unite a discordant conference on massive budget bills despite their slim majority.

Leaders successfully wooed Midwestern Republicans and fiscal hawks whose opposition had threatened to sink the bill, which combined $4.8 trillion in spending cuts with a $1.5 trillion debt ceiling hike.

McCarthy’s projection of confidence followed by a flurry of meetings behind closed doors and last-minute changes was not so different from the environment leading up to and during McCarthy’s five-day, 15-ballot Speaker election in January. 

“You’ve underestimated us,” McCarthy told reporters after the vote. “Just as it took me 15 rounds to win Speaker, the one thing I have promised the American public: I will never give up on you. So what we did today was raise the debt limit, stop the wasteful Washington spending and curb inflation and put us on a path that we can control.”

“Not only did we offer a plan, we passed it,” McCarthy said.

And members involved in crafting and getting agreement on the debt bill credited their success to relationships built during the Speaker election saga.

“It forced some unlikely bedfellows into a room together. It forced people to get to know one another,” said Rep. Garret Graves (R-La.). “This House is much more functional as a result [of the Speaker’s election].”

Ball now in Biden’s court

Republicans’ debt limit bill amounts to a black-and-white opening offer in debt limit negotiations – which President Biden has so far refused to have.

Biden has called for a “clean” debt ceiling increase not tied to any policy changes or spending reductions, and has not met with McCarthy on the matter since Feb. 1. For months, he called on Republicans to release a 10-year budget proposal before sitting down to discuss spending as a separate issue.

“We are empowering Speaker McCarthy to negotiate,” said Rep. Stephanie Bice (R-Okla.). “He has a clear vision on what this conference wants to see.”

Key members backing the debt limit bill have declined, though, to get specific with any “red lines” for debt limit negotiations with the president and Senate Democrats.

“The red line is that we’re not going to do a clean debt ceiling, period,” said Rep. Garret Graves (R-La.), a leader of McCarthy’s debt limit negotiations strategy. “We are going to demand changing the trajectory of this country’s financial situation.”

It gets tougher from here

For all the victory celebration, Wednesday’s legislation was merely a Republican messaging bill — written by GOP leaders and passed solely with GOP votes — that will be dead-on-arrival in a Senate chamber controlled by Democrats.

With that in mind, the GOP struggles to pass their own policy priorities take on greater significance, highlighting the divisions in the conference, underscoring the difficulties of managing a tiny majority and foreshadowing the much tougher task McCarthy faces when it comes time to pass a bipartisan debt-ceiling bill.

That legislation will need to win Biden’s signature and prevent a government default without infuriating House conservatives to the extent that they want to remove McCarthy from the Speakership. 

Some conservatives are already warning that they’ll oppose any debt-limit increase that lacks the deficit-reduction provisions of the House GOP proposal. 

“I’m not interested in anything coming back – anything but what we voted on,” said Rep. Ralph Norman (R-S.C.)

It remains unclear if such opposition would be enough to cause McCarthy to keep a bipartisan debt-ceiling bill from reaching the floor at all.

‘Technical changes’ vs. ‘major concessions‘

House GOP leaders had pledged on Wednesday that they would not make any changes to the bill despite concerns from Midwestern Republicans in the “corn belt” about provisions that would end ethanol biofuel tax credits.

Conservatives had also pushed for more on work requirements for public assistance programs.

Then in the wee hours of the morning on Wednesday, leaders changed the bill to remove a provision that would have eliminated the biofuel tax credits and hasten implementation of new work requirements provisions from fiscal year 2025 to fiscal year 2024.

Rep. Matt Gaetz (R-Fla.) had threatened to vote against the bill unless the work requirements were moved up. 

House Majority Whip Steve Scalise (R-La.) said that the adjustments were mere “technical changes,” while House Majority Whip Tom Emmer (R-Minn.) said “nothing of substance” was changed in the bill.

The draft bill, Rep. Chip Roy (R-Texas) said, had “cut some things that were not intended in our agreement to do.”

But a joint release from all four Iowa Republicans — Mariannette Miller-Meeks, Ashley Hinson, Zach Nunn and Randy Feenstra — boasted of securing “major concessions” after negotiating with McCarthy.

“Having successfully amended the bill to protect funding for these tax credits, our delegation will vote for this legislation, which is a starting point to avoid a default and cut wasteful spending,” the Iowa members said in a joint statement.  

Conservatives won’t always demand ‘regular order’ 

Republicans, for years, have railed against the mechanisms used by the majority Democrats, accusing Speaker Nancy Pelosi (D-Calif.) of ramming legislation through the chamber without granting lawmakers either the time to read it or the power to change it. 

Indeed, a key feature of January’s Speakership fight was the conservatives’ insistence that McCarthy accept new rules for promoting transparency and empowering the rank-and-file — rules McCarthy vowed to heed. 

Wednesday’s debt-ceiling vote revealed that neither group — conservatives or leadership — will always adhere to those guidelines.

The 320-page proposal was cobbled together by McCarthy and other GOP leaders rather than moving through the various committees of jurisdiction, defying the Republicans’ promise to move all legislation by “regular order.” 

The package was introduced officially only on Tuesday, defying the party’s 72-hour rule designed to allow members ample time to read bills. 

And it was altered at 2 a.m. on Wednesday to eliminate certain tax credits for biofuels and to expedite the timeline for implementing new work requirements for federal benefits — substantial policy changes that defied GOP promises not to alter legislation “in the dead of night.”

Still, Republican leaders rejected any notion that they had contravened their promises of good-government transparency, dismissing the criticisms as a construct of the “liberal media.” And conservatives joined the chorus, revealing that they will not always insist upon regular order — if the conditions demand otherwise. 

“It’s never my first choice that we have some elements of a package that didn’t go through committee, and there’s a couple elements to this that didn’t. And it’s not my first choice that we had, you know, a last-minute change. But let’s put it all in perspective, okay?  … Of the last 20 debt ceilings, about two have gone through committee,” said Rep. Chip Roy (R-Texas). 

“None of this stuff is new and none of it is surprising. We’ve been talking about it for weeks,” he continued. “The language of the bill was available last Wednesday, more than honoring our 72-hour commitment.”

Mychael Schnell contributed.