Earlier this week on Fox News’s Hannity show, House Speaker Kevin McCarthy called debt “one of the greatest threats … to this nation.” CNN reported that a deal worked out between McCarthy and the anti-McCarthy insurgents who delayed his coronation as speaker included a major focus on cutting government spending and reducing the deficit.
According to Rep. Patrick McHenry of North Carolina, “debt, deficit and the fiscal house … is the biggest challenge in this Congress” and “a major priority for House Republicans.” House GOP lawmakers are openly suggesting that they will be insisting on changes to federal social insurance programs.
Republicans see the potential for a catastrophic default on U.S. debt obligations as leverage to force a Democratic president's hand.
This is more than mere posturing by Republicans. In a presentation to the House GOP conference on the party’s fiscal priorities, GOP leaders laid out a series of proposals, including a fiscal 2024 budget resolution balancing the budget within 10 years, a cap on 2024 discretionary spending at 2022 levels or lower, and most ominously, for the nation’s seniors “reforms” to “mandatory spending programs” which would almost certainly include Social Security, Medicare, and Medicaid. In addition, House Republicans are vowing to not raise the debt limit “without budget agreement or commensurate fiscal reforms.”
It’s certainly true that Republicans have long railed against budget deficits, though they usually are more vocal when they are not in power and are even more muted when their policies are growing the national debt — as was the case with the deficit-exploding Trump tax cuts passed in 2017 (and the Bush tax cuts passed in 2001 and 2002). Indeed the national debt rose by close to $8 trillion during Trump’s four years in office. As Democratic Rep. Brendan Boyle put it earlier this week, “You can always tell where there’s a Democrat in the White House” because Republicans suddenly get concerned again about the deficit and the debt. Oddly, Republicans didn’t seem overly delighted about the fact that the Treasury Department reported on Thursday that the budget deficit had fallen from $2.6 trillion to $1.4 trillion in just the past year.
Here’s what is particularly odd about the current hand-wringing over the debt: Up until now House Republicans hardly talked about it.
Last September, when Republicans unveiled their policy agenda if they won control of the House, debt reduction was all but absent, and it certainly wasn’t portrayed as a top legislative priority. Sure, there was a call to “curb wasteful government spending that is raising the price of groceries, gas, cars, and housing, and growing our national debt,” but this is the sort of anodyne language that has shown up in Republican talking points for decades.
Rather, the GOP focus was on “fighting inflation,” making America “energy independent,” and “strengthening the supply chain and end dependence on China.” There was no mention of the deficit, no talk about balancing the budget, and certainly no proposals for cutting social insurance programs. In individual House races, Republicans were far more likely to talk about immigration, crime, and the scourge of “wokeness” and/or socialism.
This insane political strategy will almost certainly backfire.
So what changed? Well, first, since inflation, the GOP’s key economic issue in the fall campaign, continues to decline, they need new talking points. But the bigger and more obvious reason is that Republicans want to hold the debt limit hostage to force the Biden administration to agree to spending cuts. The only way they can justify that position is to harp on the deficit as the greatest threat to America’s future. You don’t have to believe me. A key leader of the anti-McCarthy insurgency, Rep. Chip Roy of Texas, made the direct connection, “We believe there ought to be specific, concrete limits on spending attached to a debt ceiling increase.”
Roy is not alone. Republicans are unabashedly connecting the debt limit increase to spending cuts. As has frequently been the case over the past 12 years, Republicans see the potential for a catastrophic default on U.S. debt obligations as leverage to force a Democratic administration’s hand.
But it’s worth noting that this insane political strategy will almost certainly backfire.
There’s a reason Republicans didn’t run on this issue last fall. The only way to truly cut spending to the degree that the GOP wants would mean reducing Social Security and Medicare benefits, and Americans really like Social Security and Medicare. Certainly, they could try to cut defense spending, but the military is popular, and already, some House Republicans have pushed back on the idea.
There’s always the approximately 30% of the budget that is discretionary spending. Yet not only is there not enough money there to truly reduce the deficit, but that 30% includes plenty of government programs that Americans like — such as money for schools and student loans, infrastructure and transportation, anti-poverty and environmental programs, national parks and public television. In the abstract, cutting government spending is a politically popular idea. When you get to the concrete details, not so much.
One can expect that Republicans will spend the next several months talking in the most general of terms about the evils of deficit spending in order to gin up support for the debt ceiling showdown that is coming. It’s really the only way to justify what they will try to do — and there is little reason to take sudden turn to fiscal responsibility seriously.
But the bigger problem for Republicans is that no one truly wants a debt default, even them. There’s little reason to believe that the Biden administration will openly negotiate with the GOP as they hold the American economy hostage to their demands. And there’s even less reason to believe that they will win public support for cutting Social Security and Medicare. To an extent, they likely haven’t realized, House Republicans have painted themselves into a corner on the debt issue. And if they do force a debt default they will almost certainly pay the biggest political price. In short, the first week of House GOP rule is off to a great start!