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Wednesday, July 17, 2024 | Back issues
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In already tenuous debt talks, Republicans urge McCarthy to increase demands

The House Freedom Caucus says it will withhold support for a deal with the White House unless Republican policy priorities are implemented.

WASHINGTON (CN) — As the nation hurtles closer to a national debt crisis, members of one of Congress’ more politically radical coalitions voiced hostility to compromise Thursday, instead insisting that Speaker Kevin McCarthy use his leverage to bring additional demands to the bargaining table.

Without some sort of deal, the country could be just days away from a first-ever default on its debt, some government officials have warned. Treasury Secretary Janet Yellen has predicted that the “X-date,” the day when the Treasury Department will run out of cash to pay down its debts, could come as soon as June 1.

But even as the deadline inches closer, negotiations between the White House and congressional Republicans led by Speaker McCarthy have been sluggish. GOP leadership has said that it would not support the Biden administration’s request to increase the debt limit without conditions — instead, Republicans have demanded that any debt ceiling legislation be paired with significant spending cuts.

GOP lawmakers have already passed legislation in the House that serves as their debt ceiling counteroffer. Marked by a reinstatement of work requirements for welfare programs and the elimination of certain tax incentives for renewable energy generation, the lower chamber earlier this month cleared a measure that would raise the national spending limit by around $1.5 trillion for a year and cap annual debt growth at just 1% for a decade.

Neither side has appeared willing over the past several months to cede ground in debt-ceiling negotiations, but optimism has grown this week among Republican leadership that a deal could be reached in the next few days. If successful, Congress would then need to pass compromise legislation with just days to go before the projected X-date.

Now, however, the House Freedom Caucus — a coalition of hard-right lawmakers — are threatening to throw a spanner in the works, suggesting in a Thursday letter to Speaker McCarthy that members would refuse to vote for a compromise if he does not double down on some key demands.

“As a result of your skilled leadership since your consequential election in January, Congressional Republicans have not been so united in decades,” says the letter, signed by Colorado Representative Lauren Boebert, Texas Congressman Chip Roy, Louisiana Representative Clay Higgins and more. “We firmly believe the best means to preserve Republican unity is to deploy it.”

Building on existing criticisms from some of its members, the Freedom Caucus questioned Yellen’s prediction of a June 1 default, calling it a “manufactured crisis.”

“The credibility of her projection suffers not only from its manipulative timing but also from Yellen’s spectacular prior failures to recognize our severe and lasting inflation while serving as Treasury Secretary and her refusal or inability to avert its development while serving as Federal Reserve Chair,” the letter states.

Yellen has said that her June 1 forecast is based on available data from the Treasury Department. Although she has previously said the X-date could be in flux, she has in recent days settled on an early June default as a likely scenario.

The Freedom Caucus also implored McCarthy to add additional provisions to Republicans’ debt-ceiling legislation, including language from a separate GOP border security bill that the lower chamber cleared in early May.

The coalition of lawmakers urged the speaker as well to support an effort to split certain funding cuts proposed in the debt limit bill — such as a provision that repealed funding to hire additional IRS agents — into separate legislation. The caucus reasoned that such a move would enable Congress to push the X-date past June.

Thursday’s letter repeats what has become a refrain among some Republican lawmakers, including Speaker McCarthy himself: placing blame for a potential default squarely on the White House’s shoulders.

“President Biden is entirely responsible for any breach in the debt ceiling, period,” the Freedom Caucus wrote. “Use our unity to make history.”

Congressional Democrats, meanwhile, have argued the opposite, blaming Republicans for what they see as holding the economy hostage in exchange for budget concessions.

“It’s amazing how people miss the obvious: there is only one person responsible for the debt ceiling hand grenade being at issue,” Rhode Island Senator Sheldon Whitehouse tweeted, referring to Speaker McCarthy. “Gaslighting this as ‘not his fault’ is obviously false. He’s the guy with the hand grenade.”

Follow @BenjaminSWeiss
Categories / Economy, Financial, Government, Politics

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