House Republicans insist that any move to raise the debt ceiling, which was partially breached this week, must come alongside cuts in spending. In doing so, House Speaker Kevin McCarthy, R-Calif., has embraced the far right’s demand for fiscal brinksmanship that could potentially see the U.S. default on its debts.
All of this poses a political threat to McCarthy, who seems likely to be forced to either cave on his demands, accept a proposed off-ramp like the fiscal commission Sen. Joe Manchin, D-W.Va., has suggested, or be responsible for a global financial crisis. But before we even get to that point, McCarthy has a bigger problem: math.
It’s unclear that any combo of cuts that would substantially reduce the federal deficit could even pass muster inside the GOP caucus.
At this point, the speaker has yet to specify what needs to be cut from the federal budget in order to satisfy his members. Running through the options he could potentially bring to negotiations with Democrats, it quickly becomes obvious that there’s almost no set of proposed cuts that would be acceptable to the White House or the Senate. Moreover, it’s unclear that any combo that would substantially reduce the federal deficit could even pass muster inside the GOP caucus.
Last month, Congress passed a $1.7 trillion omnibus appropriations package, funding the government through the end of the fiscal year in October. That topline number — and the last-minute scramble to pass the bill — has been a point of contention for conservatives, who claim that it’s yet more out-of-control spending from Democrats. But that bill dealt mostly with discretionary spending, which Congress has to set each year and only makes up about 30% of total federal spending. Another 8% or so goes to paying down interest payments on the national debt. The other roughly 62% is made up of mandatory spending, including Social Security and Medicare, which are fully funded each year by law. Reducing mandatory spending requires changing the laws that authorized each program.
It’s also worth noting that while the omnibus bill is projected to produce a $1 trillion deficit, that would be less than the previous year’s $1.4 trillion deficit. And the Congressional Budget Office score of the bill showed that the most recent spending bill will actually reduce the deficit by $3.9 billion over the next decade.
Right away these numbers are a problem for McCarthy. While talking about cutting Social Security or Medicare has long been a part of the GOP’s mantra, they’ve been loath to actually cut those programs, even when they’ve had control of both houses of Congress and the White House. Former President Donald Trump derided the idea of slashing entitlements on Friday, giving Democrats a potential cudgel to beat back any GOP attempt to do so.
Shifting over to discretionary spending, over half of the fiscal year 2023 omnibus package was dedicated to defense spending: $858 billion. In his backroom deal to gain the speaker’s gavel, McCarthy reportedly agreed to cap discretionary spending at the previous year’s levels, which would mean rolling back the defense budget to around $780 billion. He defended that potentiality on Sunday, telling Fox News’ Maria Bartiromo that there was room to cut inside the Pentagon’s budget, especially “money spent on ‘wokeism.’” But that idea hasn’t sat well with other House Republicans, many of whom insist that nondefense spending bear the brunt of any cuts.
Yet if almost three-quarters of government spending is off the table in any final deal, that gives precious little wiggle room to bring down the deficit. It becomes an even harder sell when you consider that during Trump’s first two years in office, his annual budget suggested massive cuts to programs like the Supplemental Nutrition Assistance Program, aka food stamps, and the Corporation for Public Broadcasting. Instead, the GOP Congress passed enough increases in federal spending that it was as though Democrats had written the bills themselves.
I’m sorry, but the math just ain’t mathing here — and McCarthy must surely know that.
They also passed the Trump tax cuts, which shrunk federal revenues and blew away any chance of a balanced budget. In the process, even before the pandemic hit, the Trump era saw the deficit balloon to levels unseen in times of low unemployment since World War II, as the director of the CBO put it in January 2020.
To recap, it’s hard to see how McCarthy would slash spending enough to claim victory. Even if he sets a goal of cutting half the current $1 trillion deficit, that roughly $500 billion wouldn’t be able to come from Medicare, Social Security, the defense budget, or any program that Republicans may rail against but voters actually like. I’m sorry, but the math just ain’t mathing here — and McCarthy must surely know that.
On the one hand, it’s probably much easier at this point for McCarthy to behave like the Trump White House this time around, setting demands that sound good to fiscal hawks but struggle to gain traction. But much like his Republican predecessors, he still would need to actually get any sort of debt ceiling deal to also pass among his rank-and-file while also gaining the approval of the Senate Democrats and President Joe Biden. And given both his narrow majority and the looming threat of a discharge petition that could kick him out of the speaker’s office, the numbers don’t seem to bode well for McCarthy’s future.
