The last time Washington negotiated over federal spending, Republicans were in disarray.
Conservatives loudly protested Minority Leader Mitch McConnell’s (R-KY) decision to cut an omnibus spending deal with Democrats, days before the GOP took over the lower chamber in January.
JUNE DEFAULT ‘X-DATE’ AIDS MCCARTHY’S PUSH FOR DEBT CEILING TALKS
Then-Leader Kevin McCarthy (R-CA), courting his right flank ahead of a rocky speaker’s election, even threatened to block the agenda of any Senate Republican who voted for the bill, including McConnell himself.
The threat turned out to be bluster — the omnibus became law without retribution. But the episode underscored a tension in Republican politics, between deal-cutting centrists and the yield-no-ground conservatives who demand ideological purity from them.
Just four months later, Democrats are betting those same divisions will unravel a GOP push to extract spending cuts in exchange for a hike in the debt ceiling. But sheer legislative math and a surprising win by now-Speaker McCarthy have Republicans hopeful they can hold the line in a high-stakes game of chicken.
House Republicans, against the odds, banded together last month to pass a bill slashing the deficit by $4.8 trillion over the next decade in return for a $1.5 trillion bump in the debt ceiling. The move was seen as necessary to get President Joe Biden to the negotiating table ahead of a summer deadline to raise the federal borrowing limit.
But the bill also took a great deal of negotiating within the Republican conference itself. Despite getting much of what they wanted, the measure was hard to swallow for GOP hard-liners, many of whom had on principle never before voted to lift the debt ceiling. And a demand by Midwestern lawmakers to preserve ethanol tax credits almost derailed the legislation.
Yet Republican leadership managed to mollify both sides. Just four GOP lawmakers voted against the bill, viewed as an opening offer to the White House in budget talks. It was the maximum McCarthy could afford to lose with his narrow majority.
For months, the White House has rejected the speaker’s demand for spending cuts, arguing the party had become beholden to “extreme MAGA Republicans” hell-bent on sending the country into default. McCarthy sat down with Biden on Feb. 1, hoping to broker an agreement well before the Treasury is unable to pay all of its bills, but the president refused to engage, insisting the debt ceiling not be used as a bargaining chip.
Democrats, adamant that Congress pass a “clean” debt ceiling increase, had cause not to take McCarthy seriously — it took him 15 rounds to become speaker in January. Even if they agreed to sit down and negotiate, they had no confidence he could deliver the votes for a compromise bill.
Yet McCarthy surprised Washington by muscling the bill through the lower chamber in a 217-215 vote. Somehow, he was able to overcome hard-liners’ aversion to compromise and centrists’ aversion to risk-taking.
Its passage has been a game-changer in debt ceiling talks — it helped get McCarthy a second meeting with the president, slated for Tuesday. But it also galvanized Senate Republicans behind the speaker.
The fiscally minded Breakfast Club was naturally happy to see the House vote to rein in federal spending. But there’s been an overwhelming show of support for McCarthy by virtually every Senate Republican.
The same GOP senators who helped Democrats raise the borrowing limit by $2.5 trillion without concessions in 2021 were now standing in lockstep with McCarthy’s insistence on cuts. Even McConnell, who played an instrumental role in spending deals in the past, reiterated in no uncertain terms that it will be McCarthy, not him, who orchestrates a deal.
“I’m seeing a higher degree of resolve in our conference behind that than I’ve seen behind anything, almost ever, when it comes to the debt ceiling,” Sen. Mike Lee (R-UT), a member of the Breakfast Club, told the Washington Examiner.
To some extent, that resolve boils down to a mathematical reality: For a debt ceiling bill to become law, it has to pass the House. Hard-line Republicans, who hold outsize sway given the GOP’s five-seat majority, simply aren’t going to accept a hike without spending cuts.
House Democrats could bring a no-conditions bill to the floor without McCarthy’s blessing using what’s known as a “discharge petition,” but the process to do so is long and arduous and requires at least five GOP votes.
For that reason, Senate Republicans say it’s up to McCarthy and Biden to sit down and negotiate.
“The Senate at some point will obviously have a role to play in all this, but they really have to work it out,” Sen. John Thune (R-SD), the No. 2 Republican in the Senate, told reporters. “There isn’t anything the Senate could originate over here that would pass the House. The House is going to have to agree on something the president will sign, and then we’ll go about the process of figuring out how to get the votes in the Senate.”
That stance, in part, is a tactical play to strengthen McCarthy’s hand going into the Tuesday meeting at the White House. Biden agreed to sit down with McCarthy, this time with the three other congressional leaders — McConnell, House Minority Leader Hakeem Jeffries (D-NY), and Senate Majority Leader Chuck Schumer (D-NY) — but the White House still refuses to negotiate over the debt ceiling.
Republicans see a united front as necessary for Biden to move off his no-negotiations stance.
Moreover, the House passing the debt limit bill has bolstered confidence among Senate Republicans that McCarthy can actually take the lead.
One of the reasons Senate GOP leaders cut an omnibus deal with Democrats in December, rather than insisting on a short-term extension into the new Congress, was their skepticism that the new GOP-led House could get a deal done without thrusting Washington into a protracted shutdown fight.
Members of the conservative Freedom Caucus were denying McCarthy the votes to become speaker, and the acrimony did little to instill confidence.
The concessions McCarthy ultimately made to win the gavel, diminishing his own power while elevating his right flank to powerful committee posts, worried Republicans that he would enter debt ceiling talks from a weak negotiating position. But his ability to unify his conference over the debt limit bill has led to a reevaluation of his speakership.
“They’re governing,” Sen. Thom Tillis (R-NC), known as a bipartisan deal-maker in the Senate, told the Washington Examiner on Wednesday. “They demonstrated that last week against the odds of a lot of the pundits on the day of the vote, thinking they weren’t going to pull it off. So, I think that’s good leadership. And I like following good leadership.”
McConnell faced his own leadership challenge for the first time in November, but it was never seen as a true threat. Multiple GOP senators said the party has moved on from the division of that election, when 10 Republicans voted against McConnell. But Tillis said it’s worth keeping “in the back of your mind” insofar as it teaches the need to engage every Republican.
It’s a lesson McCarthy appears to have learned — he and his leadership team went to great lengths to get buy-in from each of the “five families” of his conference when crafting the debt bill. He built goodwill with the Freedom Caucus and convinced centrists to coalesce around a plan that could get the support of their most conservative members.
“That’s how they got the bill passed out last week,” Tillis said. “So, I think there’s a lesson in there for leadership: Engage everyone. Do the very best you can and then move on. If you can’t get the support, then go find votes elsewhere.”
In the end, GOP centrists viewed getting a bill out of the House as more important than its contents, which they assumed would be watered down in negotiations with the White House anyway.
The next stage of the Republican push for spending cuts will be more challenging. The Treasury Department has been deploying “extraordinary measures” to stave off default but may be unable to pay all of its obligations as soon as June 1.
Democrats, who remain unmoved by passage of the debt ceiling bill, are betting that Republican unity will fray the closer Washington comes to that “X-date.”
“I think that once the tremors of their irresponsibility start to be felt in the economy, they’re going to hear a lot of noise from their big donors, from their big corporate backers. And it’s going to be very hard for them to maintain unity,” Sen. Sheldon Whitehouse (D-RI) told the Washington Examiner.
Republicans don’t have the best track record when it comes to sticking together — it’s one of the reasons the GOP base gravitated to former President Donald Trump’s brawler persona, feeling that Democrats stick together while Republicans give ground. Sen. Rick Scott (R-FL) channeled that very grassroots frustration in his leadership challenge of McConnell.
Several Republican senators conceded that their united front could dissolve as negotiations progress or stall.
“It just depends on the direction in which the president’s and the speaker’s talks go. I don’t know how they’re gonna end up,” Sen. John Kennedy (R-LA) told the Washington Examiner. “I can’t guarantee that it’ll be something I’m happy with. We’ll just have to wait and see what they come up with. I’m very pleased that we are where we are.”
Centrist Sen. Todd Young (IN) predicted GOP unity won’t last “indefinitely” but said it doesn’t have to. The point of holding the line, he said, is to extract concessions from the White House and break the impasse.
“So, if there are concessions there, you’ll start to see members consider whether or not those concessions are reasonable,” he told the Washington Examiner.
Sen. Mike Rounds (R-SD) emphasized that, for now, it makes no sense for Republicans to get involved and “muddy the waters” in negotiations between McCarthy and Biden. But as talks progress, he sees no reason why the Senate can’t play a role, so long as it’s done in a way that does not undermine their leadership.
“Now, if there was an inspiration someplace along the line, then I think that’s fine to share,” he told the Washington Examiner. “But I think that would be shared — Democrats would share that with the president, and I think Republicans would probably share that with the speaker, but that’s gonna have to be done not in a public way.”
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Tillis echoed that sentiment, insisting that House leadership will continue to be “at the tip of the spear” even if negotiations stall.
“We’re not going to turn our back on good leadership,” he said.
