IMO, the right way to go is to say that for every additional $1 of spending, they have to cut $2
House Republicans are preparing to give the Treasury Department guidance if the White House and Congress can’t agree to lift the nation’s debt ceiling.
The plan was part of the private deal struck between House conservatives and Rep. Kevin McCarthy (R-CA) in order for McCarthy to win speakership, according to Rep. Chip Roy (R-TX), who helped broker the deal. Roy told the Washington Post that McCarthy agreed to adopt a payment prioritization planby the end of the first quarter of the year.
According to the Post, the emergency contingency plan will need to include major spending cuts from the Biden administration, in exchange for which Republicans will sign off on raising the current limit of $31.4 trillion before the Treasury Department can’t borrow any more.
On Friday, Treasury Secretary Janet Yellen said that the Treasury department will enact “extraordinary measures” next week so the government can keep its payment obligations – however she couldn’t guarantee that the US will make it beyond early June without default.
Also on Friday, White House press secretary Karine Jean-Pierre made clear that the administration will not negotiate.
In the preliminary stages of being drafted, the GOP proposal would call on the Biden administration to make only the most critical federal payments if the Treasury Department comes up against the statutory limit on what it can legally borrow. For instance, the plan is almost certain to call on the department to keep making interest payments on the debt, according to four people familiar with the internal deliberations who spoke on the condition of anonymity to describe private conversations. House Republicans’ payment prioritization plan may also stipulate that the Treasury Department should continue making payments on Social Security, Medicare and veterans benefits, as well as funding the military, two of the people said. –WaPo
That said, Democrats are preparing to push back on the plan, and will likely note that any hypothetical proposal to triage Social Security, Medicare and benefits for veterans and the military would still leave out ‘huge swaths of critical federal expenditures on things such as Medicaid, food safety inspections, border control and air traffic control,’ etc. Democrats will also likely accuse Republicans of pandering to bondholders, which include Chinese banks, vs. Americans.
“Any plan to pay bondholders but not fund school lunches or the FAA or food safety or XYZ is just target practice for us,” said one senior Democratic aide.
In other Kevin McCarthy news, the newly minted speaker may be trying to win back the MAGA crowd, announcing on Thursday that he’s open to the idea of “expunging” one or both of former President Trump’s impeachments.