{"id":619,"date":"2023-03-22T12:36:00","date_gmt":"2023-03-22T13:36:00","guid":{"rendered":"https:\/\/adn.monetizemail.com\/?p=619"},"modified":"2023-03-31T01:05:42","modified_gmt":"2023-03-31T01:05:42","slug":"chicken-or-egg-game-is-on-as-congress-barrels-toward-debt-limit-cq-roll-call-bc-congress-debtlimitcon","status":"publish","type":"post","link":"https:\/\/adn.monetizemail.com\/?p=619","title":{"rendered":"Chicken-or-egg game is on as Congress barrels toward debt limit [CQ-Roll Call :: BC-CONGRESS-DEBTLIMIT:CON]"},"content":{"rendered":"

WASHINGTON \u2014 A House budget resolution will be delayed in part to allow for negotiations with President Joe Biden on a debt limit increase paired with some sort of concessions on spending and other policies acceptable to Republicans, according to House Budget Chairman Jodey C. Arrington<\/a>.<\/p>\n

But that raises an interesting chicken-or-egg question for the two parties. Biden says he won\u2019t negotiate at all over the debt ceiling, and even if he were to agree to talk about fiscal policy, it won\u2019t be until Republicans produce their own budget blueprint.<\/p>\n

There are several months left to figure something out. The Congressional Budget Office and other analysts say lawmakers and the White House have until sometime between June and September<\/a> to figure out a debt limit resolution or the economy could tip right over into recession.<\/p>\n

But if neither side blinks first, there\u2019s a real risk talks could get dangerously close to going past the \u201cx date\u201d when the Treasury Department could miss payments on U.S. obligations.<\/p>\n

House Republicans need more time for drafting a fiscal 2024 budget resolution partly because Biden was a month late in submitting his budget request, which was not delivered until March 9, Arrington said in an interview Monday at the House GOP\u2019s annual policy conference in Orlando, Fla.<\/p>\n

But a delay is also designed to give Speaker Kevin McCarthy<\/a>, R-Calif., more flexibility in negotiating terms for a debt ceiling increase that is needed by summer to ensure the Treasury can keep paying all its bills, Arrington said.<\/p>\n

\u201cI can only tell you that I\u2019m committed to getting this budget out, and so is the speaker,\u201d the Texas Republican said. \u201cBut we also, remember, want to give [McCarthy] the space to negotiate on the debt ceiling, and you just don\u2019t want too many things in the pot at one time.\u201d<\/p>\n

Deadlines? What deadlines?<\/h3>\n

The 1974 budget law set the first Monday in February as the deadline for presidential budget submissions, but there\u2019s no penalty for missing it, which has occurred frequently.<\/p>\n

Similarly, the 1974 law says April 15 is the deadline for lawmakers to complete action on a budget resolution, but that\u2019s another oft-missed, nonbinding deadline, and oddsmakers give the divided Congress virtually no chance of agreeing on a joint budget this year anyway.<\/p>\n

A budget resolution lays out spending, revenue and deficit targets for a period of years, usually a decade. It\u2019s nonbinding and isn\u2019t signed into law by the president, but if adopted by both chambers it creates enforceable spending caps for appropriations and gives lawmakers the option to use reconciliation procedures to create a filibuster-proof fiscal package.<\/p>\n

Given this year\u2019s political dynamics, a House-only budget resolution would serve little purpose other than to broadcast GOP fiscal priorities but could make some party lawmakers cast tough votes that could be used against them in the 2024 campaign. It also could expose cracks in party unity, which is needed if Republicans hope to extract any policy concessions out of the debt limit talks.<\/p>\n

At the same time, there\u2019s nothing more \u201cmust-pass\u201d than a debt limit increase \u2014 or at least a temporary suspension of the borrowing cap \u2014 to prevent Treasury from having to delay payments on federal obligations, spending incurred under laws enacted by both parties.<\/p>\n

McCarthy and Biden met initially in February and agreed to keep talking, but no further meetings have been scheduled, as Biden has maintained the position that Republicans need to first show their budget plans.<\/p>\n

\u201cI told the speaker, as soon as he\u2019s about ready to lay out his budget, I\u2019m willing to sit down,\u201d Biden said earlier this month at the White House. \u201cAnd now I\u2019m hearing things like, well, we\u2019re not going to have our budget till April or May, maybe even June. \u2026 It doesn\u2019t sound like it\u2019s on the level yet.\u201d<\/p>\n

Speaking to reporters in Orlando on Sunday, McCarthy said there was no reason why debt limit talks couldn\u2019t happen first. \u201cWhy do we have to have a budget out to sit down and talk about the debt ceiling?\u201d he said.<\/p>\n

McCarthy said he spoke with Biden on Friday at the annual Friends of Ireland lunch at the Capitol. He told the president he was wasting time not negotiating on the debt limit; Biden reiterated his demand for a \u201cclean\u201d debt limit increase, which McCarthy said his members wouldn\u2019t support. Other than tax increases, all policy attachments are on the table, the speaker said.<\/p>\n

In a separate interview, House Majority Leader Steve Scalise<\/a> accused Biden of \u201cplaying games with the debt ceiling\u201d and questioned why the president took so long to get his own budget out.<\/p>\n

\u201cIf the budget was such a priority to have debt ceiling talks done, then the president would have filed his budget on time instead of having it delayed by a month,\u201d Scalise, R-La., said. \u201cThat shouldn\u2019t hold up talks over how we can actually address the debt ceiling. That\u2019s got to happen sooner rather than later.\u201d<\/p>\n

On Tuesday, McCarthy cited the latest banking crisis as an example of the financial instability wrought by spending-fueled inflation over the past few years. Silicon Valley Bank and others bought up large amounts of supposedly safe government bonds, only to be exposed to heavy losses when interest rates rose sharply and customers wanted to withdraw funds.<\/p>\n

\u201cWhy are we having a banking crisis? Because government spent too much and created inflation,\u201d McCarthy said. \u201cShould we do exactly what the president is saying, just lift the debt ceiling and create more inflation and more banking problems? I mean, this should be a wake-up call to everybody and say, \u2018Oh my god, we\u2019ve got to do something about this debt ceiling.\u2019\u201d<\/p>\n

High hopes<\/h3>\n

The new House Republican majority began the year with hopes of producing a budget that would eliminate deficits over 10 years. But that task has grown more daunting after lawmakers promised not to cut Social Security or Medicare and not to gut the military, while pushing to extend the 2017 GOP tax cuts that are set to expire after 2025.<\/p>\n

The Congressional Budget Office laid out the math challenge last week in an analysis prepared at the request of Senate Budget Chairman Sheldon Whitehouse<\/a>, D-R.I., and Senate Finance Chairman Ron Wyden<\/a>, D-Ore.<\/p>\n

The analysis showed that if the tax cuts are extended and Social Security, Medicare, defense and veterans\u2019 benefits are taken off the table, all other discretionary programs would have to be cut by 100 percent by the final year of the 10-year budget window. And even then, the deficit in fiscal 2033 wouldn\u2019t be wiped entirely clean; there\u2019d still be a modest $20 billion shortfall.<\/p>\n

Arrington said Monday that a balanced budget is more \u201caspirational\u201d than an immediate focus of a narrow GOP House majority that has only four votes to spare to reach the 218-vote threshold for passage, assuming united Democratic opposition.<\/p>\n

\u201cThe focus is, the next year or two, what we can do to reduce spending and get real spending cuts accomplished, and then how do we leverage the debt ceiling negotiation to achieve those spending limitations,\u201d Arrington said.<\/p>\n

In the interview, Arrington said he wants to produce a budget \u201cthat reins in spending, reduces the debt-to-GDP [ratio], and restores fiscal responsibility to our nation\u2019s capital and to Congress.\u201d<\/p>\n

He said the House budget was likely to hold discretionary spending to a 1 percent annual increase over 10 years, which he said would produce about $2.7 trillion in deficit reduction. The hard-right House Freedom Caucus proposed a similar plan in recent weeks.<\/p>\n

Democrats are using the CBO analysis to argue that a GOP push for a balanced budget is unrealistic and would impose devastating cuts to vital programs.<\/p>\n

But Arrington said the CBO study doesn\u2019t use \u201cdynamic scoring\u201d to take account of the additional revenue that can be produced by lowering taxes and reducing regulations.<\/p>\n

He said he would like the CBO to start using that scoring method \u201cbecause [economic] growth is a part of reducing our debt to GDP.\u201d<\/p>\n

If a bipartisan commitment is needed for the CBO to use that methodology, Arrington said, he would push for legislation to make that happen. \u201cI\u2019m committed to all of the above,\u201d he said.<\/p>\n

But ultimately, Arrington said, balancing the budget will require \u201ca significant amount of mandatory spending reduction,\u201d apart from Social Security and Medicare. He has pushed for work requirements for welfare programs and requiring Social Security numbers for receiving the child tax credit to reduce improper payments.<\/p>\n

While discretionary spending must be cut, he said, entitlement programs make up the lion\u2019s share of the federal budget. \u201cThere\u2019s just no other way around it,\u201d he said.<\/p>\n

___<\/p>\n

\u00a92023 CQ-Roll Call, Inc., All Rights Reserved. Visit cqrollcall.com.<\/a> Distributed by Tribune Content Agency, LLC.<\/p>\n

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