Debt and Spending Showdown About to Heat Up

When Republicans took their razor thin majority in the House of Representatives, eventual GOP Speaker Kevin McCarthy promised to rein in spending.

When Republicans took their razor thin majority in the House of Representatives, eventual GOP Speaker Kevin McCarthy promised to rein in spending.

Then, when Treasury Secretary Janet Yellen announced that the US was poised to hit the debt ceiling as soon as the end of January if Congress didn’t raise the debt ceiling, Republicans jumped at the chance to hold the country hostage, threatening to default on the national debt and tank the global economy if they couldn’t extract deep cuts to social programs that our communities rely on. 

After a few weeks of saber rattling and framing the terms of the debate, the debates over debt and spending are about to heat up. Democrats are insisting that we pay our bills and pass a clean increase to the debt ceiling. Republicans are posturing to use the threat of defaulting on our debts to push through draconian cuts to social programs. 

Note I say debates - plural - because there are really two different issues. The debate over the debt ceiling is about whether or not we are going to pay our debts for money we’ve already spent… much of it racked up because of the Trump administration’s tax cuts.  The debate about spending is a discussion about whether or not we are going to fund the programs that our communities rely on, like Medicaid, Medicare, Social Security, education, public health and renewable energy. And then there is a whole other debate that nobody seems to want to have about revenue: rolling back decades of tax cuts so the rich pay a slightly more reasonable share and actually fund social services. 

Debt and Spending Debates Heat Up

• We are going to get our first serious look at economic and budget projections today (Feb 14) at 2pm when the bipartisan Congressional Budget Office releases its 'The Budget and Economic Outlook: 2023 to 2033' report, including updated budget and economic projections. 

• Senate Democrats are planning a quick response. At 2:30 pm today, Senate Majority Leader Chuck Schumer and fellow Democratic Sens. Debbie Stabenow, Patty Murray, and Sheldon Whitehouse will hold a press conference discuss a Senate Democratic Policy and Communications Committee (DPCC) report on the impact of the House Republican proposal to cut funding back to FY22 levels for discretionary appropriations. 

• Meanwhile, President Biden is headed to an IBEW hall in Latham, MD for a speech on the economy where advisors say he is going to talk about 'progress we are making building an economy from the bottom up and the middle out, and about his vision to grow the economy, lower costs, and reward work, not wealth - while reducing the deficit.’ 

And with that the debates over debt and spending will be in full swing. 

On the other side of the aisle, Republicans are working to get their act in gear. Aides to Kevin McCarthy say the Speaker is in talks with the “five families” of the House GOP to gain alignment on a plan. GOP insiders invoked a term referencing the mob families that controlled the criminal underworld in New York and New Jersey to describe the disparate interests in the Republican Conference. In reality, House Republicans are much less organized and less ethical than the Mafia.

We likely won’t see a real threat of defaulting on national debt until June, but we can expect the brinkmanship about debt and spending to reach a fever pitch by early March. 

The Biden administration is set to release its FY2024 budget funding request on March 7, formally kicking the discussion over to Congress. 

Not coincidentally, the Conservative Political Action Committee (CPAC) is positioning itself to frame that debate. CPAC is planning its annual conference March 1-4 at the Gaylord National Resort in National Harbor. The full scale media blitz surrounding that event could be a key moment for Republicans to prime the conversation IF they’re able to to keep the focus on the economy and not the ongoing food fight going on within the Republican Party.  

Get Some Context

Want a look into the appropriations process and how the sausage is made? Tune into Show Me the Money: The Appropriations Process, a webinar with the Congressional Progressive Caucus Center Thursday (tomorrow) at 1pm eastern.