BIDEN-MCCARTHY DEBT & BUDGET DEAL
Voting 314 for and 117 against, the House on May 31, 2023, passed a bill (HR 3746) negotiated by President Joe Biden and House Speaker Kevin McCarthy that would suspend the Treasury’s statutory borrowing limit until January 2025; clamp down on nondefense discretionary spending over the next two fiscal years; allow the military budget and veterans’ health care spending to rise at normal rates; require further cuts in discretionary spending if Congress fails to pass all 12 annual appropriations bills on time; reduce Internal Revenue Service spending; expand work requirements for receiving food stamps; rescind $28 billion in unspent appropriations for Covid relief; scale back environmental reviews by federal agencies, and expedite construction of a 300-mile natural gas pipeline between northern West Virginia and southern Virginia. The accumulated national debt is now $31.4 trillion. Congressional action is required to permit additional borrowing needed for the government to pay its bills.
In more detail, the bill would:
- Essentially freeze fiscal 2024 nondefense discretionary spending at current (fiscal 2023) levels and allow a 1 percent increase in fiscal 2025. These steps would reduce budget deficits by $1.5 trillion over 10 years.
- Transfer $20 billion from the Internal Revenue Service to other agencies in fiscal 2024-2025, reducing the $80 billion recently added to IRS budgets over 10 years for modernizing computer systems, improving customer service and increasing audits of wealthy individuals and corporations.
- Increase from 49 to 54 the age cutoff for work requirements imposed on adults without dependents who receive Supplemental Nutrition Assistance (food stamps); waive the work requirement for veterans, the homeless and individuals 18-24 raised in foster care, and tweak eligibility rules for Temporary Assistance for Needy Families (TANF), the state-federal welfare program for indigent families with children.
- Weaken the authority of the National Environmental Policy Act to regulate the environmental, health and economic impacts of actions by federal agencies, a step intended to speed the permitting of energy and infrastructure projects.
Floor Debate, Pro & Con:
Supporter Tom Cole, R-Okla., said: “The reforms included in this bill are historic. The first year-over-year cut in spending in a debt-ceiling bill. The largest rescission of appropriated but unspent funds in history. The first real reforms to requirements for SNAP and TANF, which will help lift people out of poverty, and real reforms to the permitting process which will streamline major infrastructure and energy projects….”
Opponent Jim McGovern, D-Mass., said: “Even though 97 percent of the [national] debt was accumulated before President Biden took office and over a quarter of the debt was accumulated under Donald Trump, and even though Republicans had no problem adding trillions to the debt with their giveaways to Wall Street CEO’s and lavish tax cuts for the very rich, they now choose to play Russian Roulette with our economy.”
A yes vote was to send the bill to the Senate, where it was passed and sent to Biden for his signature.
REPUBLICAN BUDGET AND DEBT PLAN
Voting 217 for and 215 against, the House on April 26, 2023, passed a Republican bill that would suspend the federal debt ceiling through March 31, 2024, or until total debt reaches $32.9 trillion, in exchange for President Biden and congressional Democrats agreeing to discretionary spending cuts totaling $130 billion next fiscal year and $4.5 billion over 10 years. The bill would limit spending growth to 1 percent annually from 2022 levels over 10 years, but does not identify the domestic, veterans, foreign-affairs or military programs that potentially would be cut to meet those caps. The bill clashes with President Biden’s call for Congress to immediately increase the debt ceiling – as Republicans were willing to do during the Trump administration — and then use normal budget negotiations to set future spending.
The bill would save $570 billion over 10 years by rolling back green-energy and energy-efficiency measures enacted in the 2022 Inflation Reduction Act, and hundreds of billions over 10 years by canceling administration programs to provide student-debt relief.
In addition, it would reduce spending by an estimated $120 billion over 10 years by imposing stricter work requirements on able-bodied recipients of Medicaid, Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). The package would also rescind $100 billion in Covid relief funds that have not been spent.
On the other hand, the bill also would add an estimated $2.4 billion to federal debt over 10 years by enacting a Republican energy bill promoting fossil-fuel consumption, and another $200 billion by repealing a newly launched $80 billion Internal revenue Service upgrade that includes improved taxpayer services and expanded auditing of businesses and wealthy individuals.
The debt limit is the total amount of debt the government can take on through borrowing to cover expenses that exceed revenue.
Floor Debate, Pro & Con:
Majority Leader Steve Scalise, R-La., said: “If somebody maxed out the credit card like President Biden did, the first thing you do is not give them another credit card to max out….He said to just give him more money to keep spending — money that we don’t have, to rack up more inflation on hardworking families….What House Republicans have done is come together to say there is a better way.”
Opponent Jim McGovern, D-Mass., called the bill “a ransom note [that] demands 10 years’ cuts unless we stick it to our own constituents….Now [Republicans] didn’t win the Senate. They didn’t win the White House. They didn’t win as big a majority as they wanted in the House. So now, to get what they want, they want to default on America so then can push through their radical MAGA agenda.”
A yes vote was to send the bill to the Senate, where it was dead on arrival.
CLEAN EXTENSION OF DEBT LIMIT
Voting 211 for and 221 against, the House on April 26, 2023, defeated a Democratic motion that sought to enact a stand-alone extension of the statutory debt limit through April 30, 2025. This would be in place of a Republican bill (HR 2811, above) using a one-year extension as a bargaining chip to obtain deep cuts in federal discretionary spending over 10 years. The current $31.4 trillion borrowing limit is expected to be reached within weeks, putting the government at risk of defaulting on its obligations.
Floor Debate, Pro & Con:
Sponsor Pat Ryan, D-N.Y., said: “The cuts in this bill are just cruel, and they would have catastrophic consequences for American families. In combat, it was my sacred duty to make sure we left no one behind. This bill leaves far too many Americans behind.”
Opponent Jason Smith, R-Mo., said: “Even Democrat[ic] senators on the other side of the building said they will not support an absolute blank-check debt limit because they are concerned about the fiscal state of America.”
A yes vote was to adopt the motion.
FOCUSING PRESIDENTIAL ATTENTION ON INFLATION
Voting 272 for and 148 against, the House on March 1, 2023, passed a bill (HR 347) urging President Biden to consider official inflation estimates by the executive branch’s Office of Management and Budget and Council of Economic Advisers when he issues presidential orders having an impact of at least $1 billion on the federal budget. The bill requires Biden to regularly report the estimates to Congress, but otherwise it is only advisory.
Floor Debate, Pro & Con:
Supporter James Comer, R-Ky., said: “Pushing one big-spending policy after another, President Biden has continued to throw fuel on the inflationary fire. That fire is rapidly consuming the wages of our constituents. They have had to pay higher and higher prices for everything from eggs to electricity, all while inflation pushes their real wages further and further behind. President Biden just does not seem to get it or admit it.”
Opponent Cori Bush, D-Mo., said: “If Republicans were serious about fighting inflation and cutting costs for regular, everyday people, they would have joined with Democrats to pass critical legislation like the Inflation Reduction Act to rebuild American manufacturing and lower the cost of prescription drugs, healthcare, energy, and other goods and services for the people of our country rather than pushing an extreme MAGA [Make America Great Again] messaging bill that accomplishes nothing.”
A yes vote was to send the bill to the Senate, where it was likely to fail.
CUTTING IRS BUDGET FOR TAX COLLECTIONS
Voting 221 for and 210 against, the House on Jan. 9, 2023, passed a bill (HR 23) that would cancel Internal Revenue Service funding of $80 billion over 10 years included in the Biden administration’s Inflation Reduction Act. About $45 billion of the sum would be used to expand IRS audits and tax collections and the remainder on improving customer service and modernizing computer systems. The IRS would use the added enforcement funds to hire thousands of auditors focused on reducing an estimated $600 billion-plus annual gap between taxes owed and taxes paid by Americans. Most of the shortfall is owed by businesses and wealthy individuals that fail to report income rather than wage earners whose taxes are deducted from paychecks, according to the Treasury Department. The rate of audits for taxpayers earning less than 400,000 will not be increased as a result of the added funding, and “the additional resources will go toward enforcement against those with the highest incomes,” the department told Congress.
Floor Debate, Pro & Con:
Supporter David Kustoff, R-Tenn., said Republicans are “focused on protecting taxpayers and small businesses from overreach and abuse. Blocking the Biden administration from unleashing 87,000 new IRS agents on taxpayers is a crucial first step toward fulfilling our commitment to America.”
Opponent Richard Neal, D-Mass., said: “The audit rate for millionaires has declined by 70 percent since 2010. Low-income workers who receive the earned income tax credit, they are audited more now than taxpayers who are making over $1 million a year. All we are asking for is fairness in the distribution of the responsibilities as to how we pay for government.”
A yes vote was to send the bill to the Democratic-led Senate, where it was likely to fail.