Decoding the Freedom Caucus’s debt limit demands

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In today’s edition … What we’re watching: AUMF procedural vote … Matt Viser on Biden’s fundraiser speeches … Ashley Parker on 2024 doom and gloom … A portrait of Antony Blinken … but first …

On the Hill

Decoding the Freedom Caucus’s debt limit demands

Republicans are far from agreeing on what they want in exchange for voting to raise the debt limit this summer. But one fraction of the House has put a marker on the field.

The House Freedom Caucus put out a list of priorities on Friday that would lead them to “consider voting to raise the debt ceiling.”

While this is by no means a consensus plan, the caucus is a significant voting bloc, and Republican leadership must entertain its ideas. (Some of its members did push the speaker’s vote to 15 rounds, after all.)

So, we thought it would be prudent to translate it into English.

Some of the demands are easy to understand: canceling the climate investments and IRS funding in Democrats’ new climate law and scrapping President Biden’s plan to forgive more than $400 million in student loan debt. Those ideas are nonstarters with the White House (although the Supreme Court could strike down the student loan forgiveness plan).

But other demands are hard to make sense of for anyone who’s not a budget wonk. Here’s our guide to what they’d mean:

Cut spending to 2022 levels

Republicans have been talking for months about paring discretionary spending back to the levels the federal government spent in the 2022 fiscal year. (Discretionary spending doesn’t include programs such as Social Security, Medicare, Medicaid and food stamps.)

  • “You’ve got to start somewhere,” Rep. Scott Perry (R-Pa.), the Freedom Caucus’s chairman, said in an interview on Monday.

But many House Republicans don’t want to cut defense spending — which accounts for close to half of discretionary spending — at all. Perry didn’t rule out Pentagon budget cuts but suggested any reductions would be minimal.

“We’re willing to take a very light touch on defense,” he said.

He also ruled out cutting spending on veterans. That accounts for more than 7 percent of discretionary spending, according to Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

Exempting those categories from cuts means Republicans would need to slash all other discretionary spending by more than 20 percent to return to fiscal 2022 levels, according to Brian Riedl, a former chief economist to former senator Rob Portman (R-Ohio) who is now a senior fellow at the Manhattan Institute

And that could be tough.

  • “When you’re talking cuts of 15 to 20 percent to the [National Institutes of Health], K-12 education spending, housing subsidies, international assistance, highways, the border — that becomes more challenging both politically and on policy,” Riedl said. “Those are popular programs that have very strong constituencies.”

Perry argues that deep cuts are necessary after such spending ballooned during the pandemic. But Democrats warn it could trigger an economic downturn.

“I think there’s absolutely no doubt that it would cause a recession,” said Rep. Brendan Boyle (Pa.), the top Democrat on the House Budget Committee, citing a recent Moody’s Analytics report. (Mark Zandi, Moody’s chief economist, was more cautious, telling The Early such cuts would “probably” be enough to tip a fragile economy into recession.)

It’s not clear exactly which programs Republicans want to target because they haven’t put forward a detailed plan yet. Democrats’ challenge, Boyle said, is to make the consequences real for voters and avoid “very abstract terms like ‘nondefense discretionary,’ which make your eyes gloss over unless you are a budgetary wonk.”

Restore “Clinton-era work requirements”

The Freedom Caucus called for reviving “Clinton-era work requirements for welfare programs” without specifying which programs they’re eyeing. As our colleague Jeff Stein pointed out last month, there are already work requirements for receiving welfare and food stamps. 

Perry said he wants nationwide work requirements for Medicaid. (The Trump administration allowed 13 states to impose Medicaid work requirements, but after courts blocked some of them, only Arkansas ultimately put them into effect. The Biden administration rolled back those rules.) 

But James Capretta, an Office of Management and Budget official in George W. Bush’s administration who’s now a senior fellow at the American Enterprise Institute, said Congress would be “highly unlikely” to impose Medicaid work requirements even under a Republican president.

  • “Once you start digging into it — ‘Well, who does this apply to? What’s the expectation of them?’ — you quickly end up with large numbers of exemptions,” Capretta said. The number of people such rules would affect “would be very, very small.”

Another idea: slashing the amount the federal government contributes to cover people in higher income brackets who are now eligible for Medicaid in the 39 states that expanded the program under the Affordable Care Act. “It seems to me that states need to have skin in the game here,” Perry said.

Take back unspent covid funds

Republicans have long called for recovering unobligated covid relief funds. Perry went further, calling for “clawing back obligated but not spent pandemic money.”

About $90 billion in covid aid was still unobligated on Jan. 31, according to a recent Government Accountability Office report. That’s a small percentage of the $1.4 trillion deficit the federal government is expected to run this year — but it’s not nothing.

About 60 percent of what’s left is money meant to shore up the pensions of employees such as ironworkers and machinists, according to an administration official, who spoke on the condition of anonymity. Other remaining funds are meant for veterans’ health care and vaccine distribution and development, as well as transit funding that’s been promised to specific states and cities but is still technically unobligated.

Boyle was skeptical of Republicans’ push to claw back unobligated covid relief funds — but he didn’t rule it out entirely.

  • “If they can show me where there’s this big pot of money that could be used, I would be happy to take a look at it,”  Boyle said.

What we’re watching

In the Senate: The Senate will take its first procedural vote on repealing the 1991 Gulf War authorization and the 2002 Iraq War authorization. The measures, led by Sens. Tim Kaine (D-Va.) and Todd C. Young (R-Ind.), have a good chance of passing. 

The bill has 12 Republican co-sponsors, and Sen. Josh Hawley (R-Mo.) told us last week he’ll support it, too. But there are expected to be four senators absent today — two Democrats and two Republicans — and there could be more. 

This is only the first step in the process. If today’s vote gets 60 senators, the process will continue next week with amendments and final passage. 

If it passes the Senate, its fate is uncertain in the House. Kaine said it’s possible to convince Speaker Kevin McCarthy (R-Calif.) to bring it up for a vote by running up the score in the Senate. 

  • “The best thing that we can do here is just run up the vote as big as we can, because the House — there are more than enough votes in the House to do this,” Kaine said. 

But Kaine has a direct message for McCarthy: “This is a legislative branch reasserting legislative powers. There’s something in that for the most powerful legislator in the place: the speaker of the House.”

Banking woes, cont.: Treasury Secretary Janet L. Yellen will testify this morning before the Senate Finance Committee — and a lot’s happened since she appeared six days ago before the House Ways and Means Committee. The hearing is centered on Biden’s budget, but lawmakers are expected to grill her on turmoil in the banking industry.

In the Texas courts: U.S. District Judge Matthew Kacsmaryk is expected to rule as soon as possible on a lawsuit that seeks to restrict access to mifepristone nationwide. Kacsmaryk heard more than four hours of debate Wednesday over a challenge brought by Alliance Defending Freedom, on behalf of several antiabortion groups and doctors, against the U.S. Food and Drug Administration

  • Kacsmaryk seemed sympathetic to the challenger’s argument that the abortion drug hadn’t been properly vetted. His ruling will probably be appealed, and the case could reach the Supreme Court.

In the New York courts: Former president Donald Trump could soon be indicted for his role in hush money payments to adult-film actress Stormy Daniels

At the White House

Biden’s speeches at fundraisers offer insight into what he’s thinking

White House reporter and Bidenologist Matt Viser files this week’s Notebook:

Biden often quotes his father, claiming he had told him: “Don’t tell me what you value. Show me your budget. I’ll tell you what you value.” 

It also might be said that, to understand Biden, don’t look at the prepared remarks. Rather, listen to him at fundraisers. That will show you what he thinks.

Biden often veers from the text when he’s in front of donors. Twice during Biden’s three-day swing to the West Coast this week, he held fundraisers in multimillion-dollar homes that offered insights.

  • He is blunter: “I think we’re going to lick it,” he said of inflation.
  • He is plain-spoken: “We better damn well get it straight, or you’re not getting any water to drink out of the Colorado River,” he said of climate change at a Las Vegas event. “Not a joke.”
  • He is gaffe-prone:Jimmy Carter … asked me to do his eulogy,” he said in Rancho Santa Fe, Calif., referring to the 98-year-old former president who recently entered hospice care. “Excuse me. I shouldn’t say that.”
  • He is a jokester: “I have two cranial aneurysms, one major embolism. Took the top of my head off the second time … because they said they couldn’t find a brain the first time,” he also said in Rancho Santa Fe.

And while he often says publicly that he considers some, but not all, of the Republican Party to be “extreme MAGA,” he put forward a precise number in his Las Vegas speech, saying 40 percent of the House Republican caucus is “extreme.”

At times, he veered into media commentary. “If you’re a moderate to liberal, you want to look at MSNBC. That’s the only thing you’ll watch on cable. If you’re conservative, you’ll turn to Fox. And it’s just getting too narrow what we’re doing.” 

At one point during his Las Vegas fundraiser on Tuesday night, he paused.

“I’m talking too long, and I apologize for doing that,” he said. “My staff is over there going, ‘Grrr.’”

The crowd laughed. And the staff, no doubt, nodded in agreement. Biden was nowhere near finished.

The campaign

2024 doom and gloom

‘Saviors versus villains’: The GOP’s 2024 presidential hopefuls have latched onto the apocalyptic rhetoric that has colored “much of the Republican Party in the era of Trump,” our colleague Ashley Parker writes.

Here are some recent examples: 

  • Trump told conservative activists that he would be “your warrior” and “your justice,” promising: “And to those who have been wronged and betrayed, I am your retribution.”
  • Former South Carolina governor Nikki Haley warned a group of conservative donors that “Joe Biden and the Democrats are destroying our people’s patriotism and swapping it out for dangerous self-loathing.”
  • Florida Gov. Ron DeSantis (R) told a crowd at the Ronald Reagan Presidential Library in California that his state was a refuge from Democratic-led “dystopia, where people’s rights were curtailed and their livelihoods were destroyed.”

In the agencies

A portrait of Antony Blinken

Our colleague John Hudson interviewed dozens of senior U.S., Ukrainian and Western officials for a profile of Washington’s top diplomat and his management of the war in Ukraine — the defining moment of his career. Here’s an excerpt:

  • “Blinken, 60, is unique in the recent pantheon of secretaries of state. He began working for Biden in the Senate more than two decades ago and built a career as the ultimate behind-the-scenes operator: a staffer enmeshed in foreign policy minutia, close to but never holding center stage..”
  • “For Blinken, the secretary-of-state role represents a career pinnacle — a dynamic that, in theory, frees him of the political constraints that shackled others who saw the job as a steppingstone to grander ambitions.”

Meanwhile, Education Secretary Miguel Cardona has an op-ed in the Tampa Bay Times today that criticizes some of DeSantis’s education policies, including his denigration of a new Advanced Placement course in African American studies.

  • “It’s heartbreaking, for example, to see politicians trying to prevent students from learning about the history, arts and culture, contributions and experiences of African Americans — especially when Black history is a vital part of our shared American story,” Cardona wrote.

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