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  • Early struggles of new House Republican majority raise anxiety over high-stakes fights to come | CNN Politics

    Early struggles of new House Republican majority raise anxiety over high-stakes fights to come | CNN Politics

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    CNN
     — 

    As House Republicans prepared to pass a parental rights bill – a signature plank of their governing agenda – GOP leaders ran into unexpected headwinds.

    House Majority Whip Tom Emmer, who is tasked with counting votes, began picking up on concerns from conservatives who thought the measure was federal overreach and moderates who worried about potential amendments related to transgender students.

    Even Rep. Ken Buck of Colorado, a member of Emmer’s whip team, informed leadership he would be voting against the bill – prompting grumbling from some senior Republicans who mused about kicking him off the whip team, according to sources familiar with the internal conversations.

    And when it came time for the floor vote, a last-minute hiccup – GOP Rep. Troy Nehls of Texas accidentally voting against the bill – prompted Emmer and other leaders to swarm Nehls on the floor and urge him to change his vote, a frantic scene as the clock ticked down and the measure’s fate hung in the balance.

    In the end, the bill wound up narrowly passing with five Republican defections – a margin that would have been enough to sink the legislation, had it not been for 10 Democratic absences.

    “Nobody ever said it was going to be easy,” Emmer told CNN in a phone interview. “You’re dealing with a whole bunch of people with a whole bunch of personalities, different points of view. (The amendment process) is an exciting process when members are able to come to the floor with an idea to impact a piece of legislation. … It’s always a challenge though.”

    Asked about Buck defying leadership on the education bill, Emmer said they are not booting him from the whip team, but he did joke about getting retribution.

    “I told him instead, we’re going to add a couple people to his whip card that will give him just a little bit more work,” Emmer said.

    The intense whipping effort and internal drama on a messaging bill that is dead-on-arrival in the Senate has become a recurring theme of the House GOP’s first 100 days in office. With little room for error in their razor-thin majority, Republicans have so far struggled to deliver on key priorities like the border and the budget amid their internal divisions – though they have notched some symbolic victories on energy and education, while actually succeeding in overturning a DC crime bill.

    Despite the handful of successes, the party’s more vulnerable members are frustrated with how the House Republican majority has so far spent its time in power, which has also included a heavy focus on investigations and running defense for former President Donald Trump.

    “I’m concerned about the kind of legislation that we’re working on, and what we’re talking about,” Rep. Nancy Mace of South Carolina, who represents a swing district, told CNN. “We just spent the last week talking about paying off porn stars, and that doesn’t get us anywhere closer to solving the inflation crisis, it doesn’t inch further to finding ways to protect women. … I’ve been very disappointed with what we’re doing right now.”

    Rep. Tony Gonzales of Texas, a moderate and outspoken critic of the GOP’s hardline border security bills, was even blunter: “I don’t have time to sit around all day long and drink scotch and bullsh*t about bills that have no chance of passing into law.”

    Senior Republicans chalked up the early struggles to natural growing pains that come with any new majority.

    “There’s always a bit of a learning curve. You have to understand, over half our members have never been in a majority,” said veteran Rep. Tom Cole of Oklahoma, a member of the GOP leadership team. “There’s a lot of learning that goes on – then add in a divided government and a narrow majority.”

    But the biggest hurdles are yet to come, with Congress gearing up to deal with must-pass items like lifting the nation’s debt ceiling and funding the government – two politically tricky issues with incredibly high stakes. And while GOP lawmakers say they are generally experiencing a honeymoon phase right now, the anxiety over the challenges ahead was palpable in interviews with over two dozen Republican members for this story.

    In a sign of how difficult things could get for GOP leaders, members of the hardline House Freedom Caucus are already talking about the cudgels they have at their disposal to use in those upcoming fights – namely, the power of any single member to force a floor vote on ousting the speaker. Restoring the procedural tool, known as the “motion to vacate,” was one of the key concessions Kevin McCarthy made in his bid to become speaker.

    “It hasn’t come up as far as in a serious conversation, as this needs to be enacted. But as we look at these issues … It does come up from time to time, as we game plan and we look at all of the alternatives and contingency plans that could play out over the next two years,” said freshman Rep. Eli Crane of Arizona, one of the McCarthy holdouts who ended up voting “present” on the last ballot.

    Lawmakers have largely attributed the House GOP’s slow start to the historic, drawn-out speaker’s battle that delayed their ability to organize committees.

    But there are other reasons: House Majority Leader Steve Scalise initially promised to put 11 bills on the floor within their first two weeks in office, but leadership was forced to pull five of them – including legislation on hot-button topics like border security, law enforcement and abortion – amid resistance within their ranks.

    House Republicans also promised to produce a 10-year budget, but have struggled behind the scenes to find consensus and are now discussing delaying – or even skipping – a budget in order to focus on a bill to combine hiking the debt ceiling with spending cuts.

    McCarthy can only afford to lose four Republican votes on any partisan bills. And he made a number of promises to secure his speakership that have complicated his ability to govern, such as vowing a more open amendment process that allows any member to alter legislation on the floor.

    While many lawmakers welcomed this addition to the legislative process, some have expressed concern that it could sink otherwise bipartisan pieces of legislation.

    “I’ve got mixed feelings,” GOP Rep. Don Bacon, who represents a Biden-won district in Nebraska, told CNN. “On the positive side, it gets more people involved. They feel like they have a voice. That’s good. I think, too, though, on the downside, it’s taking some of our bills that should be more bipartisan, but through the amendment process is made more partisan.”

    Rep. Kelly Armstrong of North Dakota acknowledged that the process is “not without its stumbles and it’s going to cause problems along the way,” but added: “I think we should celebrate it.”

    Abolishing the House’s remote voting system, though encouraging for many who wanted the chamber to return to its pre-Covid posture, has also made attendance an issue. Emmer told CNN that even a member who recently tore his Achilles’ heel is not planning on missing any time.

    Despite the challenging dynamics, Republicans have notched some real wins, including passing a resolution to block a DC crime bill that lessened penalties for certain offenses and a resolution to end the Covid-19 public health emergency.

    “We’re holding tight to our commitment to America. And I know it looks a little bit dicey and it doesn’t look real fluid. … That’s democracy. I think that’s a positive thing,” said Rep. Lisa McClain of Michigan, a new member of the GOP leadership team. “It’s not real pretty all the time, but I think it’s positive.”

    GOP Rep. Jennifer Kiggans, a freshman from Virgina who flipped her seat, said it is important to show what Congress looks like under Republican leadership even if the legislation is not going to pass the Senate.

    “We’ve been there three months. I don’t know anybody that assumes a new position and changes things overnight. So it’s a work in progress. I think we are demonstrating what Republican leadership looks like.”

    A number of House Republicans expressed concern that the toughest fights the party will face are still to come, from reaching a deal on the debt ceiling, to funding the government to continuing to deliver on key campaign promises.

    “We haven’t gotten to the heavy lifting yet,” GOP Rep. Mike Rogers of Alabama, a committee chairman, told CNN.

    Crane told CNN, “I’m definitely concerned about it” when asked about the pace of legislation coming to the floor.

    And GOP Rep. Steve Womack of Arkansas compared the first 100 days to a football scrimmage.

    “In football terms, we have been in a scrimmage. We’ve basically been trying to figure out how this small majority is going to work together with differing viewpoints,” he explained. “We’re going to join the varsity now. Competition is going to get a little tougher. The issues are going to get a little harder. And the challenge to leadership is going to get a little bit more compelling. But I think that they are equal to the task.”

    A number of members also voiced their concern that not enough progress has been made on crucial issues like the debt ceiling.

    “What worries me is the delay,” Cole told CNN about the state of debt ceiling talks.

    There’s also been some miscommunication issues. House Budget Chairman Jodey Arrington of Texas ruffled some feathers among Republicans when he told CNN that the GOP would produce a budget in May – a statement his office had to then walk back – and when he told a group of reporters that he is working on a “term sheet” of spending cuts, which McCarthy later shot down, saying: “I don’t know what he’s talking about.”

    Still, most House Republicans are pinning their frustrations on President Joe Biden, who they framed as unwilling to come to the negotiating table.

    “I wish we had made more progress on the debt ceiling at this point,” GOP Rep. Dusty Johnson, chair of the centrist-leaning Main Street Caucus, told CNN. “We are getting very close to go time. The fact that we’re where we’re at should concern a lot of us. That is because Joe Biden refuses to come to the table.”

    Kiggans told CNN, “there’s got to be less finger pointing” over the issue.

    “I really disagree with standing up on the floor and making really obnoxious speeches about the other side.”

    The White House has called for the debt ceiling to be raised without any conditions attached.

    Beyond the debt ceiling, the conference is still stalled on a number of key pieces of legislation including a narrow border security bill that has run into fierce opposition from moderates.

    The various ideological groups inside the House GOP met twice about a broader immigration and border package during the last week the House was recently in session, including one meeting involving McCarthy. The hope is to move a package through committee later this month.

    But the two most vocal voices on the issue, Gonzales and Texas GOP Rep. Chip Roy, do not appear to be budging.

    “I’m not going to give in, and you’re never going to out-border me,” said Gonzales, who opposes a hardline border security bill from Roy.

    Meanwhile, Roy told CNN: “I’m not really worried about what [Gonzales] has to say.”

    To help deal with the internal divisions, McCarthy tapped GOP Rep. Garret Graves of Louisiana to lead negotiations on the debt ceiling and to meet at least weekly with leaders of each faction of the House GOP conference, known as the “five families,” in an effort to privately air grievances and avoid tensions from spilling into public view.

    But the deputization of Graves – as opposed to someone on McCarthy’s elected leadership team, like Scalise, or Arrington, who is actually in charge of budget issues– has raised some eyebrows in GOP circles, who wonder if McCarthy is trying to create some distance from the talks or if he doesn’t feel like he can trust his other deputies.

    One GOP lawmaker said Arrington is not a close ally of the speaker, which has made things more challenging for the pair.

    “Jodey’s not a McCarthy guy,” the member said. “But Jodey is doing his best.”

    Another Republican acknowledged that there’s long been some distrust between McCarthy and Scalise, who were once seen as potential rivals.

    Arrington, in a statement, said he is focused on his mission “to stop the reckless spending that is bankrupting our country and restore fiscal sanity in Washington before it’s too late.”

    And Armstrong pointed out that having Graves in charge of overseeing some of these talks makes sense from a resource perspective.

    “Scalise and his team have to run the floor with a five-vote majority,” he said. “They are doing a great job, but it’s a lot.”

    Graves acknowledged to CNN the significance of being tapped by leadership to take on such a pivotal role.

    “Everything that I’m doing is sort of part of the speaker’s authority,” Graves told CNN. “I was not elected.”

    Graves likened the meetings, which McCarthy joins at least a third of the time, to “a therapy session.”

    “The best way I can describe it is a big family Thanksgiving dinner,” Armstrong, a regular meeting attendee, told CNN. “Everybody fights and is rowdy and will get into arguments but you know what? When you walk out of that Thanksgiving dinner, you better not make fun of my sister or brother at a bar or you’re going to have a problem.”

    “They’re contentious, but they’re respectful,” Armstrong added.

    These meetings are intended to open the lines of communication with members who normally wouldn’t engage with one another and be proactive about working out issues in order to avoid clashes on the House floor. From there, Emmer digs into the details with members who have specific sticking points. Beyond targeted meetings, Emmer said he and his team have had listening sessions with every member of the conference.

    The process of bringing various groups of House Republicans together has become a fixture in the conference’s first 100 days in the majority and a hallmark of McCarthy’s leadership style. Part of that is, by necessity, since McCarthy can only lose four Republicans on any given vote.

    But that process takes time, which is partly why the conference has not been able to put up some of its top priorities up for a floor vote yet.

    “It’s like getting a bunch of stray cats to all come together and go in the same direction. Pretty much the same thing with congressmen,” GOP Rep. Jeff Van Drew of New Jersey said.

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  • ‘It’s not zero.’ Wall Street is pricing in a small but growing risk of a disastrous US default | CNN Business

    ‘It’s not zero.’ Wall Street is pricing in a small but growing risk of a disastrous US default | CNN Business

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    New York
    CNN
     — 

    A US default would have such devastating economic and financial consequences that many observers dismiss the possibility out of hand. But investors are not ruling out such a nightmare scenario.

    Even though a default could wipe out millions of jobs and wreak havoc on Wall Street, the White House and Republican leaders in Washington are nowhere near a deal to avert disaster that could strike as soon as July.

    As politicians sleepwalk toward a potential debt ceiling crisis, financial markets have begun pricing in a small — but growing — chance of a disastrous default.

    The implied probability of a US government default has increased to approximately 2%, according to modeling by research provider MSCI shared exclusively with CNN. That calculation is based on the cost to insure US debt in the market for credit default swaps.

    Although the probability of default is tiny, it has increased roughly fivefold since January 2, MSCI said.

    Since then, chaos in Congress, underlined by the historic dysfunction leading up to the election of House Speaker Kevin McCarthy, have raised concerns about how lawmakers will reach a compromise on much thornier issues such as the debt ceiling.

    “The probability of default has gone up noticeably,” Andy Sparks, head of portfolio management research at MSCI, told CNN in an interview. “It is small, but it’s not zero. And it has gone up in a very significant way.”

    An actual default would be terrible — for both Wall Street and Main Street. Moody’s Analytics chief economist Mark Zandi has described a default as “financial Armageddon.”

    “I don’t think anyone should be complacent about this,” said Sparks. “Turmoil in the banking system shows how things can change very quickly.”

    The federal government hit the $31.4 trillion debt ceiling in January, forcing Treasury Secretary Janet Yellen to take accounting moves known as “extraordinary measures” to avoid default.

    Yellen has used unusually strong language for a former central banker to warn Congress against messing with the debt ceiling. On Thursday, Yellen said a breach of the debt ceiling could spark a “prolonged downturn and a global financial crisis.”

    “It could upend the lives of millions of Americans and those around the world,” Yellen said in a speech.

    Goldman Sachs chief economist Jan Hatzius told CNN in January that even a near-default could cause a recession as well as turmoil in financial markets. Moody’s estimates that even a brief breach of the debt limit would kill almost a million jobs.

    All of this explains why many believe Washington will get a deal done before disaster strikes, as it has in the past.

    Even though leaders in Washington are not seriously negotiating on a debt ceiling deal, there is still time.

    The Congressional Budget Office has estimated that even without addressing the debt ceiling, the government will have enough cash to avoid a default until sometime between July and September. The exact timing for the so-called X-date will depend in large part on 2022 tax collections in April.

    Tom Barkin, president of the Federal Reserve Bank of Richmond, told CNN last week that it’s “hard to imagine” the government would breach the debt ceiling.

    Still, Barkin conceded if it happened the Fed would be forced to react, much like it did after the Sept. 11 terror attacks.

    Others are more pessimistic about the debt ceiling.

    Greg Valliere, chief US policy strategist at AGF Investments, only sees a 60% chance that Congress reaches a deal to address the debt ceiling.

    “I think we’ll come right up to the precipice,” Valliere, who is based in Washington, told CNN. “Most people in this city feel it’s inconceivable we could default on our debt. I agree it’s unlikely but it’ll be much closer than people thought.”

    He pointed to the more radical makeup of the Republican caucus and the reluctance among some lawmakers to vote for a debt ceiling hike.

    Even McCarthy, the Republican House Speaker, told CNBC this week there has been “no progress” in negotiations. “Time is ticking. Now I’m very concerned about where we are,” McCarthy said.

    “I worry there are just enough House radicals who might not accept anything. And it doesn’t take many of them to make this a crisis,” Valliere said.

    Asked about MSCI’s estimate of a 2% implied probability of a default, Valliere said that number is low.

    “The markets are too sanguine,” he said. “The market has felt for months that this is like the little boy who cries wolf. But this is not a typical debt ceiling debate.”

    There are some early indicators of concern popping up in the bond market.

    Morgan Stanley wrote in a report on Thursday that “kinks” have emerged in the Treasury bill market around bonds that mature around the X-date.

    “Market attention could swing back to this issue soon” Morgan Stanley advised clients.

    Or maybe not.

    McCarthy and his top lieutenants say they are prepared to push ahead with a fallback plan: A party-line bill to raise the debt ceiling, CNN’s Manu Raju reports.

    But such a move could be risky. Republicans can only afford to lose four of their own members in any party-line vote.

    There is also a possibility that Congress punts, reaching a short-term agreement to delay the issue by a few months.

    Eurasia Group analyst Jon Lieber said in a report Thursday there is a growing chance that lawmakers put off a debt ceiling solution until the end of the year.

    “A short-term punt would merely delay and not eliminate the disruption risks of the debt limit,” Lieber said.

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  • McCarthy sends letter to Biden urging more robust negotiations on the debt ceiling | CNN Politics

    McCarthy sends letter to Biden urging more robust negotiations on the debt ceiling | CNN Politics

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    CNN
     — 

    House Speaker Kevin McCarthy urged the White House in a letter sent Tuesday to start more robust negotiations over raising the nation’s borrowing limit, the first major action in weeks on either side of the debt ceiling issue.

    McCarthy writes “with each passing day, I am incredibly concerned that you are putting an already fragile economy in jeopardy by insisting upon your extreme position of refusing to negotiate any meaningful changes to out of control government spending.”

    McCarthy also proposed a series of places to start saving money including reclaiming unspent Covid-19 relief funds and strengthening work requirements for social programs.

    However, there are limited relief funds left to draw upon. As of the end of January, some $90.5 billion in federal Covid-19 pandemic funding has not been obligated and has not expired, according to the US Government Accountability Office.

    That’s out of the roughly $4.6 trillion in pandemic relief and recovery funding that Congress approved in six packages since early 2020.

    The largest chunk of unexpired, unobligated money is in the Public Health and Social Services Emergency Fund, with smaller amounts left in the Pension Benefit Guaranty Corporation Fund, the Emergency Rental Assistance, Veterans Medical Care and Health Fund and other programs, according to the GAO.

    Republicans have also long been eager to add or enhance work requirements in public assistance programs, which will limit enrollment and reduce the amount of federal funding needed. Already, one GOP lawmaker has proposed broadening the work mandate in the food stamps program.

    McCarthy walked his members through his letter during their GOP conference meeting. He said that the White House is doing everything it can to not negotiate in an attempt to extract maximum leverage in these talks when the deadline approaches.

    McCarthy, shortly after the letter went out, criticized Biden for refusing to sit down with him.

    “I’m concerned more than I’ve ever been about getting this debt ceiling done,” the California Republican said on CNBC, due to the lack of conversations and negotiations.

    The White House, however, said it does not want to continue negotiations until Republicans are ready to offer a counter proposal to the White House’s budget request, which the Biden administration unveiled earlier this month.

    In a statement, the White House said, “It’s time for Republicans to stop playing games, agree to a pass a clean debt ceiling bill, and quit threatening to wreak havoc on our economy. And if they want to have a conversation about our nation’s economic and fiscal future, it’s time for them to put out a Budget – as the President has done with his detailed plan to grow the economy, lower costs, and reduce the deficit by nearly $3 trillion.”

    Republicans have yet to release their plan, as they continue struggle to find an agreement between the different factions in their narrowly divided majority.

    However, McCarthy told CNBC that House Republicans are prepared to lay out $4 trillion in cuts in his next meeting with Biden.

    “If the president would have a meeting I would have all the $4 trillion sitting there and provided to you … the difference, is he wants to play politics and I do not. I think we should be adults here,” he said.

    McCarthy and his team still believe that they have the upper hand on the debt ceiling in the sphere of public opinion if they continue to show a pattern of trying to get Biden to sit down and he refuses to do so. It’s why McCarthy publicly said last week he’d asked Biden when they’d talk at the Friends of Ireland lunch – they want to show they are making the effort.

    Republicans believe that if this does go to the brink, they need to show that they’ve tried repeatedly to talk.

    Rep. Richard Hudson, the head of the campaign committee for Republicans, told CNN that while the politics should be secondary on debt ceiling, he does think McCarthy repeatedly asking for negotiations only to be rebuffed helps Republicans.

    This story has been updated with additional developments.

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  • Trump shadow looms large over House GOP policy retreat | CNN Politics

    Trump shadow looms large over House GOP policy retreat | CNN Politics

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    Orlando, Florida
    CNN
     — 

    House Republicans had hoped to use their annual retreat to get on the same page about upcoming policy battles and devise a strategy to preserve their fragile majority.

    Instead, they find themselves playing defense for former President Donald Trump.

    While most Republicans had hoped to steer clear of any presidential politics – despite being in Florida, home to two major potential GOP rivals in 2024 – Trump’s announcement over the weekend that he expects to be imminently arrested has put him back in the center of the conversation and forced Republicans to publicly rally to his side. Even some GOP lawmakers who have called for the party to move on from Trump have lined up to offer their full-throated defense of the ex-president, attacking the Manhattan District Attorney’s office that is investigating Trump as a political witch hunt.

    Speaker Kevin McCarthy, echoing calls from inside his conference, has instructed GOP-led committees to investigate whether the Manhattan DA used federal funds to probe a payment made by Trump’s then-personal attorney Michael Cohen to adult film star Stormy Daniels days before the 2016 presidential election.

    McCarthy said Sunday that he already talked to House Judiciary Committee Chairman Jim Jordan, a Republican from Ohio, about an investigation into the matter, and hinted that there could be more developments on that front soon.

    “Remember, we also have a select committee on the weaponization of government, this applies directly to that. I think you’ll see actions from them,” McCarthy told reporters at a news conference kicking off their three-day policy retreat.

    But Republicans weren’t in complete lockstep with Trump. McCarthy carefully broke with Trump’s calls to protest and “take our nation back” if he is arrested, which has sparked concerns of political violence reminiscent of the January 6 attack on the Capitol.

    “I don’t think people should protest this, no,” McCarthy said. But he added: “You may misinterpret when President Trump talks … he is not talking in a harmful way, and nobody should. Nobody should harm one another … We want calmness.”

    Firebrand Rep. Marjorie Taylor Greene of Georgia, however, offered a different take.

    “I don’t think there’s anything wrong with calling for protests,” she told reporters after the news conference on Sunday. “Americans have the right to assemble and the right to protest. And that’s an important constitutional right. And he doesn’t have to say ‘peaceful’ for it to mean peaceful. Of course he means peaceful.”

    The latest Trump drama is once again threatening to divide the GOP and overshadow their carefully-laid messaging plans – a familiar predicament for Republicans who served in Congress while Trump was in office and spent years being forced to answer for his regular controversies. Republican leaders who had hoped to focus on their legislative agenda during the first news conference of their policy retreat instead fielded numerous questions from reporters about Trump and the Manhattan DA’s investigation.

    Asked whether he thinks it would be appropriate for Trump to run for president if he is ultimately convicted, McCarthy said: “He has a constitutional right to run.”

    Multiple Republican lawmakers – including House GOP Conference Chair Elise Stefanik – have endorsed Trump, while at least two of his staunch supporters have thrown their weight behind other candidates in the race: South Carolina Rep. Ralph Norman is backing former South Carolina Gov. Nikki Haley, and Rep. Chip Roy of Texas is supporting Florida Gov. Ron DeSantis.

    Most GOP lawmakers, however, have been reluctant to pick sides just yet, waiting to see how the field develops. Even McCarthy, who credited his speakership to Trump, has yet to make his preference known.

    “I could endorse in the primary, but I haven’t endorsed,” he told reporters on Friday. When pressed on if he will do so, he again repeated: “I could endorse but I haven’t.”

    Aside from a potentially bruising GOP primary contest, House Republicans have other major internal battles on the horizon. They are about to dive into some of the most complicated and divisive policy fights of their razor-thin majority, including lifting the nation’s borrowing limit, funding the government, reauthorizing federal food stamp programs and deciding whether to continue aid for Ukraine.

    Part of their goal during their annual retreat is to just get the conference in sync ahead of these looming debates.

    “The value of something like this is, can we keep the era of good feelings going within the Republican conference?” said Rep. Dusty Johnson of South Dakota, who chairs the centrist-leaning Main Street Caucus. “This is gonna be a nice opportunity for us to just get in the same room, have a couple hundred of us breathe the same air, and remind ourselves that we have more in common than we have apart.”

    While the GOP has notched a handful of victories since taking over the House, including a resolution to overturn a DC crime bill, most of their bills have been messaging endeavors thus far. And even measures that were thought to be low-hanging fruit, like a border security plan, have proved more challenging than expected in their slim majority.

    House Republicans know their biggest challenges lie ahead.

    “The question is really going to be as we get into phase two,” GOP Rep. Brian Fitzpatrick of Pennsylvania, who co-leads a bipartisan caucus with Democrats, told CNN. “The real test is going to be the must-pass pieces of legislation.”

    The GOP’s investigations on a wide array of subjects, including Hunter Biden’s business deals and the treatment of January 6 defendants, have caused some consternation among the party’s moderates. And some were also skeptical about the need for a congressional response to a potential Trump indictment.

    “I’m going to wait until I hear more facts and read the indictment itself,” Rep. Don Bacon, a Nebraska Republican who represents a district President Joe Biden won, told CNN. “I have faith in our legal system. If these charges are political bogus stuff, and they may be, it will become clear enough soon.”

    GOP leaders are nonetheless expressing confidence in their ability to stay united.

    “House Republicans are working as a team,” House GOP Whip Tom Emmer of Minnesota said at the Orlando news conference. “Because that’s what the American people elected us to do.”

    Bacon framed the stakes of the legislative fights with Biden and Senate Majority Leader Chuck Schumer to come by saying, “We need to be the governing party that voters trust. This will determine 2024 results. This means we can’t cave to Biden’s and Schumer’s demands, but we can’t refuse to find consensus and make agreements on must pass legislation.”

    GOP Rep. Tim Burchett of Tennessee, who told CNN he is willing to shut down the government if conservatives do not get what they are calling for pertaining to the debt ceiling, reflected on how House Republicans could learn from their Democratic counterparts in presenting a unified front.

    “They’re better than us at the carrot and the stick. If they get in line, they get the carrot. If they don’t, they get the stick. They all tout the unity thing. Maybe that’s one of our weaknesses,” he told CNN.

    The must-pass pieces of legislation expose not only the fault lines of a slim majority, but also underscore the hurdles House Republicans face in cementing their transition from a nay-saying minority to a governing majority.

    “Campaigning is for dividing. Governing is for uniting,” GOP Rep. Tony Gonzales of Texas told CNN, adding that sentiment must extend beyond House Republicans to Biden and Senate Democrats.

    “I’d say in general, not everybody comes up here to be serious legislators. A lot of people come up here for fame and fortune. I spent 20 years in the military. I’m focused on being a serious legislator,” he added.

    Fitzpatrick told CNN, “It’s definitely an adjustment,” when describing the House Republicans’ transition from minority to majority, particularly for those members who have not served in the majority before. But Fitzpatrick pointed to the fact that the messaging bills that Republicans have brought to the floor so far have passed almost unanimously.

    Some of the House GOP’s biggest hurdles will come in trying to write a budget blueprint, which they hope will kick off negotiations over the raising debt ceiling, where Republicans are demanding steep spending cuts.

    Further complicating the GOP’s goal to balance the budget and claw back federal spending, Republican leaders – egged on by Trump – have vowed not to touch Social Security and Medicare.

    Norman acknowledged how difficult it is going to be to coalesce around a framework that the entire conference can agree on. Before leaving Washington, the far-right House Freedom Caucus laid out their own hardline spending demands in the debt ceiling fight.

    “I don’t expect to get 218 on the first blush. What we present, there’s gonna be some gnashing of teeth,” he told CNN. “Every dollar up here has an advocate.”

    Burchett told CNN he stands behind the proposals being pushed by the Freedom Caucus.

    “It seems like every time the conservatives are the only ones that compromise. And we are just going to have to say no compromise,” he told CNN, adding he is willing to shut down the government on this issue. “I did it under Trump, and I’ll sure as heck do it under Biden.”

    McCarthy said he thought it was “productive” for his members to outline “ideas” for the budget, and dismissed the idea that anyone was drawing red lines.

    Asked about Biden’s insistence that House Republicans show them their budget before negotiations can continue, McCarthy replied, “Why do we have to have a budget out to talk about the debt ceiling? We’re not passing the budget, we’re doing a debt ceiling.”

    He added that he has told the president, “We’re not going to raise taxes, and we’re not going to pass a clean debt ceiling, but everything else is up for negotiation.”

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  • McCarthy leans on ‘five families’ as House GOP plots debt-limit tactics | CNN Politics

    McCarthy leans on ‘five families’ as House GOP plots debt-limit tactics | CNN Politics

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    CNN
     — 

    The White House and Senate Democrats have calculated that Speaker Kevin McCarthy won’t have enough votes to raise the national borrowing limit and will end up caving to their demands to avoid a first-ever debt default – with no strings attached or any conditions whatsoever.

    House Republicans are trying to prove them wrong.

    Behind the scenes, McCarthy is beginning to chart out a new strategy to ensure the House GOP can muster 218 votes to raise the national debt ceiling and tie that to an array of cuts to federal spending, as the standoff with the White House shows no signs of easing.

    In the speaker’s office last week, leaders of the so-called “five families” of the House GOP – representing the various ideological wings of the conference – met for the first time to discuss the range of possibilities and to kick around ideas about raising the debt limit, according to multiple attendees. McCarthy didn’t attend the session but enlisted a close confidant, Louisiana Rep. Garret Graves, to lead the discussions, with top committee chairmen and other members of leadership also participating. Talks are expected to pick up when the House returns from a two-week recess after the Presidents Day holiday.

    The goal, according to multiple Republicans, is to begin to develop a consensus about a proposal that can pass the House with GOP votes and strengthen their conference’s negotiating position as Washington stares into a looming debt default this summer. The belief among Republicans is such a plan would force the White House and Senate Democrats to back off their insistence that they will only accept a “clean” debt ceiling increase without any spending cuts attached.

    The move gives a window into McCarthy’s management of his razor-thin majority, allowing his most conservative members to try to find consensus with more moderate lawmakers – replicating a dynamic that ultimately allowed him to win the speakership after a messy, 15-ballot fight. But it also is a break to how one of his predecessors, John Boehner, dealt with the debt limit the last-time the country nearly defaulted – in 2011 when many of the decisions were made by the leadership, prompting a revolt among the rank-and-file.

    The private GOP talks have been positive so far, attendees said, even as they acknowledged they are in the very early stages, weighing a range of potential budget cuts and not nearing any agreement yet.

    Rep. Patrick McHenry, the North Carolina Republican who chairs the House Financial Services Committee, said the meeting amounted to a “healthy discussion” that showed “goodwill” in an effort “to come up with an approach that unifies Republicans and enables us to unlock the rest of the legislative year.”

    “That’s the purpose of the conversation: How do you move the debt limit out of the House of Representatives?” McHenry told CNN.

    The discussions are expected to run parallel to talks between McCarthy and President Joe Biden, with the speaker making clear he believes the next step will be to continue discussions with Biden. The group could potentially help McCarthy present a GOP proposal to the president in future conversations and help vet any White House offer.

    But despite both Biden and McCarthy sounding positive after their first face-to-face encounter earlier this month, there’s been little tangible progress toward finding a deal as Democrats continue to hold firm to their demands to raise the borrowing limit with no horse-trading with Republicans.

    Republicans believe that the White House is slow-rolling Biden’s discussions with the speaker in order to ratchet up pressure to pass a clean debt ceiling increase, something McCarthy has publicly and privately rejected.

    “They say they don’t want to put the economy in jeopardy,” McCarthy told CNN when asked about the lack of progress with Biden since the last White House meeting. “I think that would be the wrong approach.”

    Behind the scenes, McCarthy has been proactive in ensuring regular communication between the five families, a nickname from the “The Godfather” of warring New York mob families who tried to maintain the peace.

    “There’s a level of trust and engagement within the five families that I have not seen in the previous four years,” said South Dakota Rep. Dusty Johnson, chairman of the Main Street Caucus, a center-right group. “We’re working really well together.”

    Rep. Dave Joyce of Ohio, who leads the pragmatic-minded Republican Governance Group, said the group meeting with Graves was “very productive, and we will continue to have those until we come up with something.”

    Another reason Republicans are eager to outline their vision: Democrats have hammered them for not having a plan – and have tried to speak for them. Indeed, perhaps the most memorable moment of Biden’s State of the Union address was when the president suggested Republicans want to cut Social Security and Medicare, eliciting jeers and boos from GOP lawmakers in the audience.

    “It’s intellectually dishonest,” Joyce said, noting that McCarthy has said repeatedly that Medicare and Social Security cuts are off the table.

    Some Democrats have speculated that they could peel off at least six House Republicans to back a so-called discharge petition – a lengthy process that forces a bill to the floor if 218 lawmakers sign on – once they get closer to a debt default and still don’t have a resolution.

    But moderate Republicans are ruling out using the discharge petition for a clean debt ceiling hike and are insisting on extracting spending cuts in exchange for raising the nation’s borrowing limit – a sign that the conference is in lockstep with McCarthy’s negotiating strategy.

    “If it’s tied to a clean debt ceiling, I wouldn’t do that,” said Rep. Don Bacon, who represents a Biden-won district in Nebraska. “The President’s got to give us some compromise.”

    The hardline House Freedom Caucus, which ended up forcing McCarthy to make key concessions to win the speakership, is one of the five groups taking part in the debt ceiling talks.

    Rep. Scott Perry, a Pennsylvania Republican who chairs the group and attended the five families meeting, said there’s a consensus on this point: “We’re not going to accept ‘no negotiation,’” a reference to the White House’s position. “And there’s not going to be a clean debt ceiling, alright?”

    South Carolina Rep. Ralph Norman, also a member of the hardline group, agreed.

    “We got to get 218,” he said of the early talks. “We’re trying to get the framework. We want all buy in.”

    Norman argued that it didn’t make sense for the groups to publicly float competing proposals, even though one of the so-called families, the Republican Study Committee, has outlined its preferred approach, although the group did not lay out specific cuts or spending proposals.

    “There’s no sense in us, one group putting something out, another group puts something out,” Norman said.

    Norman, who initially opposed McCarthy’s speakership bid but ultimately backed him, said the California Republican’s effort to build consensus has helped his standing within the conference.

    “To his credit, Kevin has done a good job of getting us all together and getting us on the same page,” Norman said.

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  • Opinion: Biden doesn’t throw away his shot | CNN

    Opinion: Biden doesn’t throw away his shot | CNN

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    Editor’s Note: Sign up to get this weekly column as a newsletter. We’re looking back at the strongest, smartest opinion takes of the week from CNN and other outlets.



    CNN
     — 

    In Lord Byron’s satirical epic poem, “Don Juan,” the main character marvels at “the whole earth, of man the wonderful, and of the stars … of air-balloons, and of the many bars to perfect knowledge of the boundless skies — and then he thought of Donna Julia’s eyes.”

    The balloon from China floating eastward over the United States last week riveted the nation’s attention for a lot longer.

    At first, the enormous balloon, carrying a smaller substructure roughly the length of three city buses, seemed to symbolize America’s wide-open vulnerability to what the Pentagon described as surveillance from a rising power.

    But the downing of the balloon off the Carolinas Saturday gave President Joe Biden’s administration a way to unleash its fighter jets without any loss of life.

    “I told them to shoot it down,” said Biden, peering at reporters through his Ray-Ban aviators at a Maryland airport. Referring to his national security team, Biden added, “They said to me let’s wait till the safest place to do it.”

    The incident led to the abrupt postponement of Secretary of State Antony Blinken’s trip to China and an apologetic statement from Beijing calling it a “civilian airship” that had “deviated far from its planned course.” The US Navy and Coast Guard are taking part in an effort to recover the aircraft. which may yield evidence of its true purpose.

    Some Republicans criticized the President for not shooting it down sooner. China called the downing of the balloon an “obvious overreaction” and said it “reserves the right” to act on “similar situations.”

    In May 1937, the golden age of transcontinental passenger airships came to a catastrophic end in roughly 30 seconds after a spark set the hydrogen fuel on the Hindenburg ablaze, killing 36. But balloons for other uses survived, and they remain a tool of surveillance, even in the era of spy satellites.

    “The question is whether China carefully considered the consequences of its actions,” wrote David A. Andelman. “Intentional or otherwise, if it was indeed monitoring air flows, their engineers might have suspected these weather phenomena would eventually take these balloons over the United States.”

    He pointed out that China has an enormous fleet of satellites which can surveil other nations. “Between 2019 and 2021, China doubled the number of its satellites in orbit from 250 to 499.”

    In the Washington Post, Sebastian Mallaby observed, “To understand how a balloon — at once menacing and farcically Zeppelin-retro — might become a defining image of the new cold war, consider how this alleged Chinese spy contraption captures both sides of the present moment. It is provocative enough to cause Secretary of State Antony Blinken to postpone a much-anticipated trip to Beijing. It is clumsy enough to symbolize China’s immense capacity to blunder — a tendency that President Biden’s team has lately exploited, to devastating effect.”

    05 opinion cartoons 020423

    02 Marie Kondo tidying

    “It is not hard to tidy up perfectly and completely in one fell swoop,” Marie Kondo wrote in the 2011 book that sold more than 13 million copies worldwide and launched her career as a Netflix star and curator of “joy.”

    “In fact, anyone can do it.”

    It was an apt sentiment at a time when striving for perfection at home and at work was the norm, despite it being a sometimes soul-crushing aspiration — and one that began to vanish with the arrival of the pandemic in 2020.

    So it was understandable that people took notice when Kondo, who gave birth to her third child in 2021, recently said, “My home is messy, but the way I am spending my time is the right way for me at this time at this stage of my life.”

    As Holly Thomas wrote, “Her benign comment, while welcomed with relief in some circles, prompted a surprisingly febrile reaction in others. … Kondo’s success was built on tidying, and encouraging us to tidy in turn. Where was her loyalty to tidying? How dare she pivot out of her well-ordered lane after selling us a way to live?”

    But that’s the wrong way to look at it, Thomas added. “The discomfort … with Kondo’s personal rebrand demonstrates a rigidity that’s reflected across many areas of life. … On a more sinister level, there can be an implicit sense that once you’ve established a particular trait or activity as inherent to your identity, it is somehow greedy or unfaithful to try your hand at something new.”

    Jura Koncius wrote in the Washington Post, “Kondo, 38, has caught up with the rest of us, trying to corral the doom piles on our kitchen counters while on hold with the plumber and trying not to burn dinner. The multitasker seems somewhat humbled by her growing family and her business success, maybe realizing that you can find peace in some matcha even if you drink it in a favorite cracked mug rather than a porcelain cup.”

    The new Kondo might welcome a bill in Maryland that would provide tax breaks to companies that switch to four-day work weeks as a pilot project. “We are three years into a pandemic that upended work life (and life-life) as many of us knew it,” wrote Jill Filipovic. “We are living in an era in which out-of-work demands, most especially parenting and other forms of caregiving, are more extreme than ever. And we are living in a country that, unlike other nations, provides meager support as its people strive to balance it all…”

    “No wonder so many workers report being fed up and burned out. No wonder so many women, who continue to do the lion’s share of the nation’s parenting, drop out of the workforce.”

    03 opinion cartoons 020423

    The 2024 presidential campaign is just starting to come into focus. Former President Donald Trump has locked on to Florida Gov. Ron DeSantis as the biggest threat to his campaign for the GOP nomination.

    Trump “mercilessly slammed DeSantis again … first at a South Carolina campaign rally and then in remarks to the media,” Dean Obeidallah noted. “On his campaign plane, Trump berated DeSantis as ‘very disloyal’ and accused him of ‘trying to rewrite history’ in recent pronouncements about Covid-19 policy in Florida.”

    If DeSantis enters the race, Obeidallah observed, “he’ll need to show the red meat-loving GOP base that he can punch back against Trump.”

    Yet Trump’s derisive nicknames for DeSantis haven’t stuck, as SE Cupp said. “I know we’re just getting started, but this Trump doesn’t seem to pack the punch that 2016 Trump did. … Maybe he’s lost his touch as he’s faced one political storm after the other.”

    Some other potential rivals are queueing up, with Nikki Haley, the former US ambassador to the United Nations, planning to announce her candidacy on February 15 and former Secretary of State Mike Pompeo mulling a possible run.

    “Haley is a formidable candidate who brings the executive experience from her days as governor as well as the foreign policy experience from her time as ambassador,” wrote Gavin J. Smith, who worked in both the Trump administration and Haley’s executive office in South Carolina. “This experience, paired with her ability to bring people together, her background as a mom and a military spouse, and her track record of fighting the uphill battle of running against old White men — is exactly why she is the right candidate, at the right moment, for Republicans to rally behind as we look to win back the White House in 2024.”

    Mike Pompeo has lost 90 pounds on a diet and exercise regimen. He has a new book out that attacks the media and lambastes some of his Trump administration colleagues. “Based on a close reading of his book,” Peter Bergen wrote, “I bet he will take the plunge. Pompeo could be looking to benefit as Trump loses altitude among some Republicans, and at 59, Pompeo is a spring chicken compared with President Joe Biden and Trump, so if it doesn’t work out well this time around, he sets himself up for other runs down the road.”

    When Biden sums up the State of the Union Tuesday evening, the camera will reveal one change from last year, reflecting divided party control of Congress: Republican Speaker Kevin McCarthy — rather than Nancy Pelosi — will be in the backdrop, alongside Vice President Kamala Harris, as Biden speaks from the House podium.

    David Axelrod, who served as a strategist and adviser to former President Barack Obama, has some advice for Biden: “Acknowledge the stress people feel, explain how you’ve tried to help but don’t tell them how great things are. Or worse, how great YOU are. You can’t persuade people of what they don’t feel — and will lose them if you try.”

    “Rather than claim his place in history, the President should paint the picture of where we’ve been and, even more important, where we’re going…”

    Biden met with McCarthy last week, as each staked out their positions on the coming battle over America’s debt limit.

    In 2011, Obama and GOP leaders in Congress narrowly averted a default in US debt payments. Republican Lanhee J. Chen pointed out that one of the people “who facilitated the 2011 deal was none other than Joe Biden. Now, many in Washington are trying to predict what might unfold over the next several months as the once-and-future dealmaker approaches yet another debt ceiling crisis — but this time as commander in chief.”

    “The current crisis presents an opportunity for moderates in both parties to unite around the need both to raise the debt ceiling but also to put in place lasting changes that will fundamentally improve America’s fiscal trajectory.”

    01 opinion cartoons 020423

    For CNN Politics, Zachary B. Wolf spoke with Robert Hockett, a Cornell University law professor, who argues that the President would have legal grounds to ignore the debt ceiling entirely. Moreover, Hockett disputed the notion that US government debt is on an unsustainable path: “When we measure a national debt, we look at it as a percentage of GDP. It’s much, much lower than the Japanese national debt is, for example, relative to Japanese GDP. And you don’t see anybody worrying about the integrity or the worthiness of the Japanese national debt or whether Japan’s economy can sustain its debt.”

    Following Biden’s speech on Tuesday, the new Arkansas governor, Sarah Huckabee Sanders, will give the GOP response. “The 40-year-old certainly provides a contrast to the 76-year-old former President Donald Trump by virtue of her age and gender,” wrote Julian Zelizer.

    But the Trump approach is still in the background, he added. “Sanders represents a new generation of Republicans eager to weaponize the same outrage machine with familiar talking points about the threats of immigration, the so-called radical left’s attacks on education, and an economy in shambles under Biden — while showing that they can govern without the self-defeating chaos and tumult that rocked the nation from 2017 to 2021.”

    For more on politics:

    Elliot Williams: I had a security clearance. It’s easier to lose classified documents than you think

    Frida Ghitis: The most important of George Santos’ secrets

    06 opinion cartoons 020423

    The death of a young man after a traffic stop and brutal police beating in Memphis cries out for a response to a national problem, wrote Maya Wiley, CEO of the Leadership Conference on Civil and Human Rights. “Tyre Nichols, who was laid to rest on Wednesday, was killed for driving while Black,” she wrote. “The former Memphis police officers fired for his killing will get an opportunity to defend themselves in court against the criminal charges, as they should. Nichols got no such opportunity…”

    “The question we should be asking now is, why are Black people stopped so often for traffic violations? Why are so many across the United States dying at the hands, or tasers or guns of police officers during these stops? And what can be done to change this horrific situation?”

    “Here’s one thing we know: Body cameras are not the answer. Body camera footage is not prevention; there was body camera footage of Nichols’ killing. It is evidence, not a prophylactic.”

    In the summer of 1966, when the young civil rights leader Stokely Carmichael “climbed onto the back of a truck with generator-powered lights below, he looked as though he had stepped onto a floodlit stage.” Carmichael lamented that after six years of shouting for freedom, “We ain’t got nothing. What we’re going to start saying now is ‘Black Power!’”

    Mark Whitaker, who wrote about that moment for CNN Opinion, is the author of a forthcoming book, “Saying It Loud: 1966 – The Year Black Power Challenged the Civil Rights Movement.”

    The day after Carmichael spoke, “a short Associated Press story describing the scene was picked up by more than 200 newspapers across America. Overnight, the Black Power Movement was born. … In 1966, the Black Power pioneers established the principle that all Black lives deserve to matter.”

    Florida’s governor is engaging in a bad faith attack on the College Board’s “proposed Advanced Placement African American Studies course, citing concerns about six topics of study, including the Movement for Black Lives, Black feminism and reparations,” wrote Leslie Kay Jones, assistant professor in the sociology department at Rutgers University. “Gov. Ron DeSantis said the course violates the so-called Stop WOKE Act, which he signed last year, and the state criticized the inclusion in the course of work by a number of scholars, including me.”

    “By villainizing CRT (critical race theory) and then representing African American Studies as synonymous with CRT, the DeSantis administration paved the way to convince the public that the accurate teaching of African American Studies as a field of research was a Trojan horse for teaching students ‘to hate.’ … I must ask where ‘hate’ is being stoked in African American Studies? Is it in the factual teaching that enslaved Black people were considered 3/5ths of a human being?”

    04 opinion cartoons 020423

    Manish Khanduri: ‘Blisters inside my blisters.’ Why we walked the entire length of India

    Lev Golinkin: Germany’s quiet betrayal of victims of the Holocaust

    Darren Foster: After 15 years of reporting on opioids, I know this to be true

    Joyce Davis: How Russia outmaneuvered the US in Africa

    AND…

    Judy Blume

    Young adult author Judy Blume is the subject of a new documentary, set to air in April on Amazon Prime. One of her books, “Are You There God? It’s Me, Margaret” is the basis for a new film, also aimed for an April release.

    “To say Blume is widely loved would be an understatement, as the documentary shows,” wrote Sara Stewart. “It features interviews with some of the author’s more famous adoring fans, including Molly Ringwald, Samantha Bee and Lena Dunham. It also showcases her correspondence with now-adult women who wrote to Blume, initially, as teenagers — and she wrote back, beginning friendships that would last decades.”

    “All of these women speak about the ways Blume’s books changed them, made them feel seen and understood in a way that their parents often did not.” At a time when books touching the topics she covers are increasingly being banned in schools, Blume’s voice rings out.

    At 84, she “is still fighting the good fight,” wrote Stewart. At the Key West, Florida, bookstore Blume co-founded, “the shelves bear signs proclaiming, ‘We Sell Banned Books.’”

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  • McCarthy hopeful after first meeting with Biden on debt limit: ‘I think that at the end of the day, we can find common ground’ | CNN Politics

    McCarthy hopeful after first meeting with Biden on debt limit: ‘I think that at the end of the day, we can find common ground’ | CNN Politics

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    CNN
     — 

    House Speaker Kevin McCarthy did not walk away from his highly anticipated White House meeting on Wednesday with an agreement in hand to address the debt limit, but signaled optimism that both he and President Joe Biden can reach consensus “long before” the United States reaches default.

    McCarthy called it “a good first meeting,” adding, “We both have different perspectives on this, but I thought this was a good meeting. We promised we would continue the conversation and we’ll see if we can get there. I think that at the end of the day, we can find common ground.”

    “I told the president I would like to see if we can come to an agreement long before the deadline and we can start working on other things,” McCarthy added in remarks outside the White House.

    Following his first White House meeting since he won the speakership, McCarthy said he believes that a funding agreement could be reached for the next two years and that “you won’t see omnibuses anymore.”

    “You’ll see the Senate and the House actually do what the American public has elected them to do,” he added.

    The highly anticipated meeting was expected to influence how the fight to raise the national debt limit unfolds as the White House and the new House GOP majority are at odds over how to resolve the critical issue.

    House Republicans say that lifting the borrowing cap must be tied to spending reductions. The White House, however, has countered that it will not offer concessions or negotiate on raising the debt ceiling.

    The US hit the debt ceiling set by Congress in January, forcing the Treasury Department to start taking extraordinary measures to keep the government paying its bills and escalating pressure on Capitol Hill to avoid a catastrophic default.

    The debt limit fight will be an early test of McCarthy’s leadership as House speaker, where he has to balance competing demands from different factions of his conference amid a razor-thin majority. It will also shed light on how, and to what extent, McCarthy and Biden are able to work with one another.

    Senate Republicans have indicated they will sit back and see how the House GOP maneuvers a way to raise the $31.4 trillion borrowing limit – before deciding if they need to insert themselves into the process.

    McCarthy told reporters on Tuesday the nation has reached “a critical point” with respect to the debt limit.

    Republicans face a political risk as they push to cut spending: If they propose cuts to popular government programs and services, they could face a public backlash.

    While McCarthy had not settled on any individual proposal ahead of the Biden meeting and was unlikely to make a specific offer, he had heard suggestions from key players in his conference.

    Ahead of Wednesday’s meeting, McCarthy has been involved in extensive preparations, consulting regularly with allies on and off the Hill including former House Speaker Newt Gingrich as well as his relevant committee chairs who he has been leaning on for their policy expertise, such as Ways and Means Chairman Jason Smith of Missouri and Financial Services Committee Chairman Patrick McHenry of North Carolina, sources familiar with the preparation told CNN.

    McCarthy and his House GOP allies are hashing out initial demands, discussing steep cuts to domestic programs and a trim to defense spending – all the while steering clear of two programs to avoid voter blowback: Medicare and Social Security.

    House Republicans had been hoping to strengthen their negotiating hand with the White House by uniting around a proposal, but finding conference-wide consensus on spending cuts has proved challenging.

    The view from Republicans heading into Wednesday’s meeting was that it is still early and there are still months of negotiations ahead – meaning there’s plenty of time for McCarthy to lay out specifics. Still, leaders have also been aware they have to begin laying the groundwork with their members now.

    The White House, meanwhile, has continued to emphasize the critical importance of avoiding a catastrophic default.

    McCarthy’s position that cuts to Medicare and Social Security are not on the table in exchange for a debt ceiling increase has drawn skepticism the White House. And when asked for his message to McCarthy in the meeting, the president told CNN, “Show me your budget and I’ll show you mine.”

    A White House spokesperson told CNN that Biden would remind McCarthy of his “Constitutional obligation to prevent a national default, as every other House and Senate leader in U.S. history has done, and as Leaders (Mitch) McConnell, (Chuck) Schumer, and (Hakeem) Jeffries have pledged to do.”

    “He will underscore that the economic security of all Americans cannot be held hostage to force unpopular cuts on working families,” they added.

    In a memo to “interested parties” dated Monday that was written by National Economic Council Director Brian Deese and Office of Management and Budget Director Shalanda Young, Biden’s top economic advisers said the president intended to pose two questions to McCarthy on Wednesday: Whether McCarthy will commit to the US not defaulting on its financial obligations and when McCarthy and House Republicans will release their budget.

    Biden, the officials wrote, “will seek a clear commitment from Speaker McCarthy that default – as well as proposals from members of his Caucus for default by another name – is unacceptable.”

    They added, “President Biden will ask Speaker McCarthy to publicly assure the American people and the rest of the world that the United States will, as always, honor all of its financial obligations.”

    A day ahead of the meeting, the president suggested McCarthy was entering the talks from a weakened position, hampered by agreements he made with an unruly GOP conference.

    Calling McCarthy a “decent man,” Biden nonetheless said he had been forced to cater to extremist Republicans in his quest to become speaker.

    Biden said at a high-dollar fundraiser in Manhattan that McCarthy had to make commitments “that are just absolutely off the wall for the speaker of the House to make.”

    Responding to the president’s fundraiser comments, McCarthy told reporters, “Apparently, he doesn’t understand … I’m looking forward to sitting down with the president, negotiating for the American public, the people of America, on how we can find savings. We’ve watched what the spending has done, we watched it brought us inflation, we watched the challenge that it happened. We’re looking forward to changing the course.”

    Illinois Sen. Dick Durbin, the Senate majority whip, told “CNN This Morning” on Wednesday that Biden should “absolutely not” negotiate on raising the nation’s borrowing limit and raised fears a default could tank the US economy. He reiterated his support for Biden’s position, while leaving the door open for spending cuts during future negotiations.

    House GOP Whip Tom Emmer said he doubted there would be any agreement on Wednesday, but said,”Everything’s on the table” when asked about defense spending cuts.

    He also said he expected McCarthy to reassure the president that there will not be a default and that spending cuts for Social Security and Medicare will not be considered.

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  • Biden and McCarthy to meet Wednesday amid debt ceiling showdown | CNN Politics

    Biden and McCarthy to meet Wednesday amid debt ceiling showdown | CNN Politics

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    CNN
     — 

    President Joe Biden and House Speaker Kevin McCarthy will meet Wednesday, a White House official confirmed, the first such gathering since the California Republican captured the speakership earlier this month.

    The meeting comes as the Treasury Department continues to take extraordinary measures to keep the government paying its bills after the US hit the debt ceiling set by Congress.

    “I want to find a reasonable and a responsible way that we can lift the debt ceiling but take control of this runaway spending,” McCarthy said Sunday on “Face the Nation” on CBS.

    “So I want to sit down together, work out an agreement that we can move forward to put us on a path to balance at the same time, not put any of our debt in jeopardy at the same time,” he said.

    Hard-line Republicans, who hold significant sway in the House because of their party’s slim majority, have demanded that lifting the borrowing cap be tied to spending reductions.

    The White House, however, has countered that it will not offer any concessions or negotiate on raising the debt ceiling. And with the solution to the debt ceiling drama squarely in lawmakers’ hands, fears are growing that the partisan brinksmanship could result in the nation defaulting on its debt for the first time ever – or come dangerously close to doing so.

    McCarthy on Sunday suggested that defense spending could potentially be on the table, but he made clear that cuts to Social Security and Medicare weren’t an option.

    “I first think, our very first responsibility, we both should have to pass a budget. We both should have to pass the appropriation bills so the country can see the direction we’re going. But you cannot continue the spending that has brought this inflation, that has brought our economic problems. We’ve got to get our spending under control,” he said.

    Earlier this month, White House press secretary Karine Jean-Pierre said the two men would meet on a range of topics, but insisted that raising the debt limit was “not negotiable.”

    “President Biden looks forward to meeting with Speaker McCarthy to discuss a range of issues, as part of a series of meetings with all new Congressional leaders to start the year,” Jean-Pierre said. “Like the President has said many times, raising the debt ceiling is not a negotiation; it is an obligation of this country and its leaders to avoid economic chaos.”

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  • Fact check: Biden makes false and misleading claims in economic speech | CNN Politics

    Fact check: Biden makes false and misleading claims in economic speech | CNN Politics

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    Washington
    CNN
     — 

    President Joe Biden delivered a Thursday speech to hail economic progress during his administration and to attack congressional Republicans for their proposals on the economy and the social safety net.

    Some of Biden’s claims in the speech were false, misleading or lacking critical context, though others were correct. Here’s a breakdown of the 14 claims CNN fact-checked.

    Touting the bipartisan infrastructure law he signed in 2021, Biden said, “Last year, we funded 700,000 major construction projects – 700,000 all across America. From highways to airports to bridges to tunnels to broadband.”

    Facts First: Biden’s “700,000” figure is wildly inaccurate; it adds an extra two zeros to the correct figure Biden used in a speech last week and the White House has also used before: 7,000 projects. The White House acknowledged his misstatement later on Thursday by correcting the official transcript to say 7,000 rather than 700,000.

    Biden said, “Well, here’s the deal: I put a – we put a cap, and it’s now in effect – now in effect, as of January 1 – of $2,000 a year on prescription drug costs for seniors.”

    Facts First: Biden’s claims that this cap is now in effect and that it came into effect on January 1 are false. The $2,000 annual cap contained in the Inflation Reduction Act that Biden signed last year – on Medicare Part D enrollees’ out-of-pocket spending on covered prescription drugs – takes effect in 2025. The maximum may be higher than $2,000 in subsequent years, since it is tied to Medicare Part D’s per capita costs.

    Asked for comment, a White House official noted that other Inflation Reduction Act health care provisions that will save Americans money did indeed come into effect on January 1, 2023.

    – CNN’s Tami Luhby contributed to this item.

    Criticizing former President Donald Trump over his handling of the Covid-19 pandemic, Biden said, “Back then, only 3.5 million people had been – even had their first vaccination, because the other guy and the other team didn’t think it mattered a whole lot.”

    Facts First: Biden is free to criticize Trump’s vaccine rollout, but his “only 3.5 million” figure is misleading at best. As of the day Trump left office in January 2021, about 19 million people had received a first shot of a Covid-19 vaccine, according to figures published by the Centers for Disease Control and Prevention. The “3.5 million” figure Biden cited is, in reality, the number of people at the time who had received two shots to complete their primary vaccination series.

    Someone could perhaps try to argue that completing a primary series is what Biden meant by “had their first vaccination” – but he used a different term, “fully vaccinated,” to refer to the roughly 230 million people in that very same group today. His contrasting language made it sound like there are 230 million people with at least two shots today versus 3.5 million people with just one shot when he took office. That isn’t true.

    Biden said Republicans want to cut taxes for billionaires, “who pay virtually only 3% of their income now – 3%, they pay.”

    Facts First: Biden’s “3%” claim is incorrect. For the second time in less than a week, Biden inaccurately described a 2021 finding from economists in his administration that the wealthiest 400 billionaire families paid an average of 8.2% of their income in federal individual income taxes between 2010 and 2018; after CNN inquired about Biden’s “3%” claim on Thursday, the White House published a corrected official transcript that uses “8%” instead. Also, it’s important to note that even that 8% number is contested, since it is an alternative calculation that includes unrealized capital gains that are not treated as taxable income under federal law.

    “Biden’s numbers are way too low,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center at the Urban Institute think tank, though Gleckman also said we don’t know precisely what tax rates billionaires do pay. Gleckman wrote in an email: “In 2019, Berkeley economists Emmanuel Saez and Gabe Zucman estimated the top 400 households paid an average effective tax rate of about 23 percent in 2018. They got a lot of attention at the time because that rate was lower than the average rate of 24 percent for the bottom half of the income distribution. But it still was way more than 2 or 3, or even 8 percent.”

    Biden has cited the 8% statistic in various other speeches, but unlike the administration economists who came up with it, he tends not to explain that it doesn’t describe tax rates in a conventional way. And regardless, he said “3%” in this speech and “2%” in a speech last week.

    Biden cited a 2021 report from the Institute on Taxation and Economic Policy think tank that found that 55 of the country’s largest corporations had made $40 billion in profit in their previous fiscal year but not paid any federal corporate income taxes. Before touting the 15% alternative corporate minimum tax he signed into law in last year’s Inflation Reduction Act, Biden said, “The days are over when corporations are paying zero in federal taxes.”

    Facts First: Biden exaggerated. The new minimum tax will reduce the number of companies that don’t pay any federal taxes, but it’s not true that the days of companies paying zero are “over.” That’s because the minimum tax, on the “book income” companies report to investors, only applies to companies with at least $1 billion in average annual income. According to the Institute on Taxation and Economic Policy, only 14 of the companies on its 2021 list of 55 non-payers reported having US pre-tax income of at least $1 billion.

    In other words, there will clearly still be some large and profitable corporations paying no federal income tax even after the minimum tax takes effect this year. The exact number is not yet known.

    Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, told CNN in the fall that the new tax is “an important step forward from the status quo” and that it will raise substantial revenue, but he also said: “I wouldn’t want to assert that the minimum tax will end the phenomenon of zero-tax profitable corporations. A more accurate phrasing would be to say that the minimum tax will *help* ensure that *the most profitable* corporations pay at least some federal income tax.”

    There are lots of nuances to the tax; you can read more specifics here. Asked for comment on Thursday, a White House official told CNN: “The Inflation Reduction Act ensures the wealthiest corporations pay a 15% minimum tax, precisely the corporations the President focused on during the campaign and in office. The President’s full Made in America tax plan would ensure all corporations pay a 15% minimum tax, and the President has called on Congress to pass that plan.”

    Noting the big increase in the federal debt under Trump, Biden said that his administration has taken a “different path” and boasted: “As a result, the last two years – my administration – we cut the deficit by $1.7 trillion, the largest reduction in debt in American history.”

    Facts First: Biden’s boast leaves out important context. It is true that the federal deficit fell by a total of $1.7 trillion under Biden in the 2021 and 2022 fiscal years, including a record $1.4 trillion drop in 2022 – but it is highly questionable how much credit Biden deserves for this reduction. Biden did not mention that the primary reason the deficit fell so substantially was that it had skyrocketed to a record high under Trump in 2020 because of bipartisan emergency pandemic relief spending, then fell as expected as the spending expired as planned. Independent analysts say Biden’s own actions, including his laws and executive orders, have had the overall effect of adding to current and projected future deficits, not reducing those deficits.

    Dan White, senior director of economic research at Moody’s Analytics – an economics firm whose assessments Biden has repeatedly cited during his presidency – told CNN’s Matt Egan in October: “On net, the policies of the administration have increased the deficit, not reduced it.” The Committee for a Responsible Federal Budget, an advocacy group, wrote in September that Biden’s actions will add more than $4.8 trillion to deficits from 2021 through 2031, or $2.5 trillion if you don’t count the American Rescue Plan pandemic relief bill of 2021.

    National Economic Council director Brian Deese wrote on the White House website last week that the American Rescue Plan pandemic relief bill “facilitated a strong economic recovery and enabled the responsible wind-down of emergency spending programs,” thereby reducing the deficit; David Kelly, chief global strategist at J.P. Morgan Funds, told Egan in October that the Biden administration does deserve credit for the recovery that has pushed the deficit downward. And Deese correctly noted that Biden’s signature legislation, last year’s Inflation Reduction Act, is expected to bring down deficits by more than $200 billion over the next decade.

    Still, the deficit-reducing impact of that one bill is expected to be swamped by the deficit-increasing impact of various additional bills and policies Biden has approved.

    Biden said, “Wages are up, and they’re growing faster than inflation. Over the past six months, inflation has gone down every month and, God willing, will continue to do that.”

    Facts First: Biden’s claim that wages are up and growing faster than inflation is true if you start the calculation seven months ago; “real” wages, which take inflation into account, started rising in mid-2022 as inflation slowed. (Biden is right that inflation has declined, on an annual basis, every month for the last six months.) However, real wages are lower today than they were both a full year ago and at the beginning of Biden’s presidency in January 2021. That’s because inflation was so high in 2021 and the beginning of 2022.

    There are various ways to measure real wages. Real average hourly earnings declined 1.7% between December 2021 and December 2022, while real average weekly earnings (which factors in the number of hours people worked) declined 3.1% over that period.

    Biden said he was disappointed that the first bill passed by the new Republican majority in the House of Representatives “added $114 billion to the deficit.”

    Facts First: Biden is correct about how the bill would affect the deficit if it became law. He accurately cited an estimate from the government’s nonpartisan Congressional Budget Office.

    The bill would eliminate more than $71 billion of the $80 billion in additional funding for the Internal Revenue Service (IRS) that Biden signed into law in the Inflation Reduction Act. The Congressional Budget Office found that taking away this funding – some of which the Biden administration said will go toward increased audits of high-income individuals and large corporations – would result in a loss of nearly $186 billion in government revenue between 2023 and 2032, for a net increase to the deficit of about $114 billion.

    The Republican bill has no chance of becoming law under Biden, who has vowed to veto it in the highly unlikely event it got through the Democratic-controlled Senate.

    Biden said that “MAGA Republicans” in the House “want to impose a 30 percent national sales tax on everything from food, clothing, school supplies, housing, cars – a whole deal.” He said they want to do that because “they want to eliminate the income tax system.”

    Facts First: This is a fair description of the Republicans’ “FairTax” bill. The bill would eliminate federal income taxes, plus the payroll tax, capital gains tax and estate tax, and replace it with a national sales tax. The bill describes a rate of 23% on the “gross payments” on a product or service, but when the tax rate is described in the way consumers are used to sales taxes being described, it’s actually right around 30%, as a pro-FairTax website acknowledges.

    It is not clear how much support the bill currently has among the House Republican caucus. Notably, House Speaker Kevin McCarthy told CNN’s Manu Raju this week that he opposes the bill – though, while seeking right-wing votes for his bid for speaker in early January, he promised its supporters that it would be considered in committee. Biden wryly said in his speech, “The Republican speaker says he’s not so sure he’s for it.”

    Biden claimed the unemployment rate “is the lowest it’s been in 50 years.”

    Facts First: This is true. The unemployment rate was just below 3.5% in December, the lowest figure since 1969.

    The headline monthly rate, which is rounded to a single decimal place, was reported as 3.5% in December and also reported as 3.5% in three months of President Donald Trump’s tenure, in late 2019 and in early 2020. But if you look at more precise figures, December was indeed the lowest since 1969 – 3.47% – just below the figures for February 2020, January 2020 and September 2019.

    Biden said that the unemployment rates for Black and Hispanic Americans are “near record lows” and that the unemployment rate for people with disabilities is “the lowest ever recorded” and the “lowest ever in history.”

    Facts First: Biden’s claims are accurate, though it’s worth noting that the unemployment rate for people with disabilities has only been released by the government since 2008.

    The Black or African American unemployment rate was 5.7% in December, not far from the record low of 5.3% that was set in August 2019. (This data series goes back to 1972.) The rate was 9.2% in January 2021, the month Biden became president. The Hispanic or Latino unemployment rate was 4.1% in December, just above the record low of 4.0% that was set in September 2019. (This data series goes back to 1973.) The rate was 8.5% in January 2021.

    The unemployment rate for people with disabilities was 5.0% in December, the lowest since the beginning of the data series in 2008. The rate was 12.0% in January 2021.

    Biden said that fewer families are facing foreclosure than before the pandemic.

    Facts First: Biden is correct. According to a report published by the Federal Reserve Bank of New York, about 28,500 people had new foreclosure notations on their credit reports in the third quarter of 2022, the most recent quarter for which data is available; that was down from about 71,420 people with new foreclosure notations in the fourth quarter of 2019 and 74,860 people in the first quarter of 2020.

    Foreclosures plummeted in the second quarter of 2020 because of government moratoriums put in place because of the Covid-19 pandemic. Foreclosures spiked in 2022, relative to 2020-2021 levels, after the expiry of these moratoriums, but they remained very low by historical standards.

    Biden said, “More American families have health insurance today than any time in American history.”

    Facts First: Biden’s claim is accurate. An analysis provided to CNN by the Kaiser Family Foundation, which studies US health care, found that about 295 million US residents had health insurance in 2021, the highest on record – and Jennifer Tolbert, the foundation’s director for state health reform, told CNN this week that “I expect the number of people with insurance continued to increase in 2022.”

    Tolbert noted that the number of insured residents generally rises over time because of population growth, but she added that “it is not a given” that there will be an increase in the number of insured residents every year – the number declined slightly under Trump from 2018 to 2019, for example – and that “policy changes as well as economic factors also affect these numbers.”

    As CNN’s Tami Luhby has reported, sign-ups on the federal insurance exchange created by the Affordable Care Act, also known as Obamacare, have spiked nearly 50% under Biden. Biden’s 2021 American Rescue Plan pandemic relief law and then the 2022 Inflation Reduction Act temporarily boosted federal premium subsidies for exchange enrollees, and the Biden administration has also taken various other steps to get people to sign up on the exchanges. In addition, enrollment in Medicaid health insurance has increased significantly during the Covid-19 pandemic, in part because of a bipartisan 2020 law that temporarily prevented people from being disenrolled from the program.

    The percentage of residents without health insurance fell to an all-time low of 8.0% in the first quarter of 2022, according to an analysis published last summer by the federal government’s Department of Health and Human Services. That meant there were 26.4 million people without health insurance, down from 48.3 million in 2010, the year Obamacare was signed into law.

    Biden said, “And over the last two years, more than 10 million people have applied to start a small business. That’s more than any two years in all of recorded American history.”

    Facts First: This is true. There were about 5.4 million business applications in 2021, the highest since 2005 (the first year for which the federal government released this data for a full year), and about 5.1 million business applications in 2022. Not every application turns into a real business, but the number of “high-propensity” business applications – those deemed to have a high likelihood of turning into a business with a payroll – also hit a record in 2021 and saw its second-highest total in 2022.

    Trump’s last full year in office, 2020, also set a then-record for total and high-propensity applications. There are various reasons for the pandemic-era boom in entrepreneurship, which began after millions of Americans lost their jobs in early 2020. Among them: some newly unemployed workers seized the moment to start their own enterprises; Americans had extra money from stimulus bills signed by Trump and Biden; interest rates were particularly low until a series of rate hikes that began in the spring of 2022.

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  • Treasury takes more extraordinary measures to avoid debt default | CNN Politics

    Treasury takes more extraordinary measures to avoid debt default | CNN Politics

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    CNN
     — 

    Treasury Secretary Janet Yellen is taking another step to temporarily delay the US defaulting on its debt.

    Less than a week after announcing that the nation hit its $31.4 trillion debt ceiling set by Congress, Yellen wrote to House Speaker Kevin McCarthy on Tuesday to say that she is adding to the extraordinary measures that will allow the government to keep paying its bills on time and stall the catastrophic economic and fiscal consequences of a default.

    She will stop fully investing the Government Securities Investment Fund of the Thrift Savings Fund, part of the Federal Employees’ Retirement System, in interest-bearing securities of the US.

    This is in addition to the measures announced last week, when Yellen said Treasury will begin to sell existing investments and suspend reinvestments of the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund.

    These funds are invested in special-issue Treasury securities, which count against the debt limit. Treasury’s actions would reduce the amount of outstanding debt subject to the limit and temporarily allow it to continue paying the government’s bills on time and in full.

    Yellen’s actions are mainly behind-the-scenes accounting maneuvers. No federal retirees or employees will be affected, and the funds will be made whole once the impasse ends, she wrote.

    The extraordinary measures should last at least until early June, Yellen has said, though she stressed that her forecast is subject to “considerable uncertainty.”

    Despite Yellen’s warnings to Congress to act promptly, little, if any, progress toward a resolution has been made between House Republicans and the White House.

    White House press secretary Karine Jean-Pierre reiterated Monday that the Biden administration is not open to negotiating on the debt limit, pushing back against comments from West Virginia Democratic Sen. Joe Manchin that the position was “a mistake.”

    “It was done three times in the past, in the past administration under Donald Trump, so this is nothing unusual,” she told CNN during a White House briefing. “This is something that should be done without conditions, and we should not be taking hostage key programs that the American people really earned and care about – Social Security, Medicare should not be put into a hostage situation.”

    McCarthy also blasted the administration’s position, tweeting last week that he’s ready to meet to discuss “a responsible debt ceiling increase to address irresponsible government spending.” He noted that he accepts President Joe Biden’s invitation to sit down, though no such meeting has been set.

    As part of the drawn-out negotiations to win the speaker vote earlier this month, McCarthy promised his conservative members that any effort to lift the debt ceiling would be accompanied by spending cuts.

    The Senate, meanwhile, is taking a back seat in the standoff for now. Senate Republicans say they will wait to see how the House GOP maneuvers a way to raise the borrowing limit before deciding if they need to insert themselves into the process.

    Despite the current situation, Senate Republican Leader Mitch McConnell told CNN Monday that “we won’t default,” without elaborating.

    Senate Majority Leader Chuck Schumer on Tuesday laid out the severe consequences of a default, saying “every single American will pay the price.” He called on House Republicans to reveal the fiscal measures they want to take.

    “Well, I say to my Republican colleagues: If you want to talk about spending cuts, then you have an obligation – an obligation – to show the American people precisely what kind of cuts you are talking about,” he said.

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  • Fact check: McCarthy’s false, misleading and evidence-free claims since becoming House speaker | CNN Politics

    Fact check: McCarthy’s false, misleading and evidence-free claims since becoming House speaker | CNN Politics

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    Washington
    CNN
     — 

    Since winning a difficult battle to become speaker of the House of Representatives, Republican Kevin McCarthy has made public claims that are misleading, lacking any evidence or plain wrong.

    Here is a fact check of recent McCarthy comments about the debt ceiling, funding for the Internal Revenue Service, the FBI search of former President Donald Trump’s resort and residence in Florida, President Joe Biden’s stance on stoves and Democratic Rep. Adam Schiff.

    McCarthy’s office did not respond to a request for comment.

    McCarthy has cited the example of Rep. Nancy Pelosi, his Democratic predecessor as House speaker, while defending conservative Republicans’ insistence that any agreement to lift the federal debt ceiling must be paired with cuts to government spending – a trade-off McCarthy agreed to when he was trying to persuade conservatives to support his bid for speaker. Specifically, McCarthy has claimed that even Pelosi agreed to a spending cap as part of a deal to lift the debt ceiling under Trump.

    “When Nancy Pelosi was speaker, that’s what transpired. To get a debt ceiling, they also got a cap on spending for the next two years,” McCarthy told reporters at a press conference on January 12. When Fox host Maria Bartiromo told McCarthy in a January 15 interview that “they” would not agree to a spending cap, he responded, “Well Maria, I don’t believe that’s the case, because when Donald Trump was president and when Nancy Pelosi was speaker, that’s exactly what happened for them to get a debt ceiling lifted last time. They agreed to a spending cap.”

    Facts First: McCarthy’s claims are highly misleading. The deal Pelosi agreed to with the Trump administration in 2019 actually loosened spending caps that were already in place at the time because of a 2011 law. In other words, while congressional conservatives today want to use a debt ceiling deal to reduce government spending, the Pelosi deal allowed for billions in additional government spending above the pre-existing maximum. The two situations are nothing alike.

    Shai Akabas, director of economic policy at the Bipartisan Policy Center think tank, said when asked about the accuracy of McCarthy’s claims: “I’m going to steer clear of characterizing the Speaker’s remarks, but as an objective matter, the deal reached in 2019 increased the spending caps set by the Budget Control Act of 2011.”

    The 2019 deal, which was criticized by many congressional conservatives, also ensured that Budget Control Act’s caps on discretionary spending – which were created as a result of a 2011 debt ceiling deal between a Democratic president and a Republican speaker of the House – would not be extended past 2021. Spending caps vanishing is the opposite of McCarthy’s suggestion that the deal “got” a spending cap.

    Pelosi spokesperson Aaron Bennett said in an email that McCarthy is “trying to rewrite history.” Bennett said, “As Republicans in Congress and in the Administration noted at the time, in 2019, Speaker Pelosi and Democrats were eager to reach bipartisan agreement to raise the debt limit and, as part of the agreement, avert damaging funding cuts for defense and domestic programs.”

    In various statements since becoming speaker, McCarthy has boasted of how the first bill passed by the new Republican majority in the House “repealed 87,000 IRS agents” or “repealed funding for 87,000 new IRS agents.”

    Facts First: McCarthy’s claims are false. House Republicans did pass a bill that seeks to eliminate about $71 billion of the approximately $80 billion in additional Internal Revenue Service funding that Biden signed into law in last year’s Inflation Reduction Act – but that funding is not going to hire 87,000 “agents.” In addition, Biden has already made clear he would veto this new Republican bill even if the bill somehow made it through the Democratic-controlled Senate, so no funding has actually been “repealed.” It would be accurate for McCarthy to say House Republicans “voted to repeal” the funding, but the boast that they actually “repealed” something is inaccurate.

    CNN’s Katie Lobosco explains in detail here why the claim about “87,000 new IRS agents” is an exaggeration. The claim, which has become a common Republican talking point, has been fact-checked by numerous media outlets over more than five months, including The Washington Post in response to McCarthy remarks earlier this January.

    Here’s a summary. While Inflation Reduction Act funding may well allow for the hiring of tens of thousands of IRS employees, far from all of these employees will be IRS agents conducting audits and investigations. Many other employees will be hired for the non-agent roles, from customer service to information technology, that make up the vast majority of the IRS workforce. And a significant number of the hires are expected to fill the vacant posts left by retirements and other attrition, not take newly created positions.

    The IRS has not yet released a detailed breakdown of how it plans to use the funding provided by the Inflation Reduction Act, so it’s impossible to say precisely how many new “agents” will be hired. But it is already clear that the total won’t approach 87,000.

    In his interview with Fox’s Bartiromo on January 15, McCarthy criticized federal law enforcement for executing a search warrant at Trump’s Mar-a-Lago resort and residence in Florida, which the FBI says resulted in the recovery of more than 100 government documents marked as classified and hundreds of other government documents. Echoing a claim Trump has made, McCarthy said of the documents: “They knew it was there. They could have come and taken it any time they wanted.”

    Facts First: It is clearly not true that the authorities could somehow have come to Mar-a-Lago at any time, without conducting a formal search, and taken all of the presidential records they were seeking from Trump. By the time of the search, the federal government – first the National Archives and Records Administration and then the Justice Department – had been asking Trump for more than a year to return government records. Even when the Justice Department went beyond asking in May and served Trump’s team with a subpoena for the return of all documents with classification markings, Trump’s team returned only some of these documents. In June, a Trump lawyer signed a document certifying on behalf of Trump’s office that all of the documents had been returned, though that was not true.

    When FBI agents and a Justice Department attorney visited Mar-a-Lago without a search warrant on that June day to accept documents the Trump team was returning in response to the subpoena, a Trump lawyer “explicitly prohibited government personnel from opening or looking inside any of the boxes that remained in the storage room,” the department said in a court filing after the August search. In other words, according to the department, the government was not even allowed to poke around to see if there were government records still at Mar-a-Lago, let alone take those records.

    In the August court filing, the department pointedly called into question the extent to which the Trump team had cooperated: “That the FBI, in a matter of hours, recovered twice as many documents with classification markings as the ‘diligent search’ that the former President’s counsel and other representatives had weeks to perform calls into serious question the representations made in the June 3 certification and casts doubt on the extent of cooperation in this matter.”

    McCarthy wrote in a New York Post article published on January 12: “While President Joe Biden wants to control the kind of stove Americans can cook on, House Republicans are certainly cooking with gas.” He repeated the claim on Twitter the next morning.

    Facts First: There is no evidence for this claim; Biden has not expressed a desire to control the kind of stove Americans can cook on. McCarthy was baselessly attributing the comments of a single Biden appointee to Biden himself.

    It is true that a Biden appointee on the United States Consumer Product Safety Commission, Richard Trumka Jr., told Bloomberg earlier this month that gas stoves pose a “hidden hazard,” as they emit air pollutants, and said, “Any option is on the table. Products that can’t be made safe can be banned.” But the day before McCarthy’s article was published by the New York Post, White House press secretary Karine Jean-Pierre said at a press briefing: “The president does not support banning gas stoves. And the Consumer Product Safety Commission, which is independent, is not banning gas stoves.”

    To date, even the commission itself has not shown support for a ban on gas stoves or for any particular new regulations on gas stoves. Commission Chairman Alexander Hoehn-Saric said in a statement the day before McCarthy’s article was published: “I am not looking to ban gas stoves and the CPSC has no proceeding to do so.” Rather, he said, the commission is researching gas emissions in stoves, “exploring new ways to address health risks,” and strengthening voluntary safety standards – and will this spring ask the public “to provide us with information about gas stove emissions and potential solutions for reducing any associated risks.”

    Trumka told CNN’s Matt Egan that while every option remains on the table, any ban would apply only to new gas stoves, not the gas stoves already in people’s homes. And he noted that the Inflation Reduction Act makes people eligible for a rebate of up to $840 to voluntarily switch to an electric stove.

    Defending his plan to bar Democratic Rep. Adam Schiff from sitting on the House Intelligence Committee, a committee Schiff chaired during the Democratic majority from early 2019 to the beginning of this year, McCarthy criticized Schiff on January 12 over his handling of the first impeachment of Trump. Among other things, McCarthy said: “Adam Schiff openly lied to the American public. He told you he had proof. He told you he didn’t know the whistleblower.”

    Facts First: There is no evidence for McCarthy’s insinuation that Schiff lied when he said he didn’t know the anonymous whistleblower who came forward in 2019 with allegations – which were subsequently corroborated – about how Trump had attempted to use the power of his office to pressure Ukrainian President Volodymyr Zelensky to investigate Biden, his looming rival in the 2020 election.

    Schiff said last week in a statement to CNN: “Kevin McCarthy continues to falsely assert I know the Ukraine whistleblower. Let me be clear – I have never met the whistleblower and the only thing I know about their identity is what I have read in press. McCarthy’s real objection is we proved the whistleblower’s claim to be true and impeached Donald Trump for withholding millions from Ukraine to extort its help with his campaign.” Schiff also made this comment to The Washington Post, which fact-checked the McCarthy claim last week, and has consistently said the same since late 2019.

    The New York Times reported in 2019 that, according to an unnamed official, a House Intelligence Committee aide who had been contacted by the whistleblower before the whistleblower filed a formal complaint did not inform Schiff of the person’s identity when conveying to Schiff “some” information about what the person had said. And Reuters reported in 2019 that a person familiar with the whistleblower’s contacts said the whistleblower hadn’t met or spoken with Schiff.

    McCarthy could have fairly repeated Republican criticism of a claim Schiff made in a 2019 television appearance about the committee’s communication with the whistleblower; Schiff said at the time “we have not spoken directly with the whistleblower” even though it soon emerged that the whistleblower had contacted the committee aide before filing the complaint. (A committee spokesperson said at the time that Schiff had been merely trying to say that the committee hadn’t heard actual testimony from the whistleblower, but that Schiff acknowledged his words “should have been more carefully phrased to make that distinction clear.”)

    Regardless, McCarthy didn’t argue here that Schiff had been misleading about the committee’s dealings with the whistleblower; he strongly suggested that Schiff lied in saying he didn’t know the whistleblower. That’s baseless. There has never been any indication that Schiff had a relationship with the whistleblower when he said he didn’t, nor that Schiff knew the whistleblower’s identity when he said he didn’t.

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  • Manchin says it’s a ‘mistake’ for White House to want Democrats to address debt ceiling without GOP | CNN Politics

    Manchin says it’s a ‘mistake’ for White House to want Democrats to address debt ceiling without GOP | CNN Politics

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    Washington
    CNN
     — 

    Democratic Sen. Joe Manchin of West Virginia said Sunday that it’s a “mistake” for the White House to want Democrats to deal with the debt ceiling without negotiating with congressional Republicans.

    “I think it’s a mistake because we have to negotiate. This is a democracy that we have. We have a two-party system, if you will, and we should be able to talk and find out where our differences are. And if they are irreconcilable, then you have to move on from there and let people make their decisions,” Manchin, a key Senate moderate, told CNN’s Dana Bash on “State of the Union.”

    “Using the debt ceiling and holding it hostage hasn’t worked in the past,” Manchin continued, adding that he “respectfully” disagrees with his party’s No. 2 Democrat in the chamber, Majority Whip Dick Durbin, on not negotiating with Republicans.

    “Every American has to live within a budget. If they don’t, they’re in trouble financially. Every business that’s successful has to live within a budget. Every state has to live within a budget. Shouldn’t the federal government have some guardrails that, say, ‘Hey, guys … you’re overreaching here and you’re overspending?’ But then pick your priorities. That’s all,” he added.

    The US hit the debt ceiling set by Congress on Thursday, forcing the Treasury Department to start taking “extraordinary measures” to keep the government paying its bills and escalating pressure on Capitol Hill to avoid a catastrophic default.

    The battle lines for the high-stakes fight have already been set. Hard-line Republicans, who have enormous sway in the House because of the party’s slim majority, have demanded that lifting the borrowing cap be tied to spending reductions. Manchin suggested Sunday he was open to spending cuts.

    The White House, however, has countered that it will not offer any concessions or negotiate on raising the debt ceiling. And with the solution to the debt ceiling drama squarely in lawmakers’ hands, fears are growing that the partisan brinksmanship could result in the nation defaulting on its debt for the first time ever – or come dangerously close to doing so.

    GOP Rep. Brian Fitzpatrick of Pennsylvania said Sunday on Fox News that the White House position against negotiating with House Republicans on spending cuts, in exchange for raising the debt ceiling, is “very irresponsible.” He said the first step in addressing the debt ceiling situation is for Speaker Kevin McCarthy to sit down with Biden.

    Rep. Josh Gottheimer, a New Jersey Democrat, said in the same interview that he believes the White House will ultimately sit down with McCarthy, which he called “a good thing.”

    Fitzpatrick and Gottheimer are the co-chairs of the bipartisan Problem Solvers Caucus in the House.

    As to whether Social Security and Medicare should be part of these negotiations, Manchin shared his interest in wanting to create a committee that would make the two programs “more financially secure and stable.” But he said no one who currently receives these benefits should receive any cuts.

    “No cuts to anybody that’s receiving their benefits, no adjustments to that. They’ve earned it. They paid into it. Take that off the table,” Manchin said. “But everyone’s using that as a leverage.”

    The senator indicated he was open to raising the income cap for Social Security taxes.

    “I’m open to basically raising – the easiest and quickest thing we can do is raise the cap,” he said.

    Meanwhile, Manchin on Sunday also offered support for fellow Senate moderate Krysten Sinema, calling her a “formidable candidate” for reelection in 2024.

    Sinema announced last month she was leaving the Democratic Party and registering as a political independent, fueling fresh interest from Arizona Democrats to challenge her next year.

    “I would think that she needs to be supported again, yes, because she brings that independent spirit,” Manchin said.

    This story has been updated with additional information.

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  • Here’s what will happen to the economy as the debt ceiling drama deepens | CNN Business

    Here’s what will happen to the economy as the debt ceiling drama deepens | CNN Business

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    Minneapolis
    CNN
     — 

    After the United States hit its debt ceiling on Thursday, the Treasury Department is now undertaking “extraordinary measures” to keep paying the government’s bills.

    A default could be catastrophic, causing “irreparable harm to the US economy, the livelihoods of all Americans and global financial stability,” Treasury Secretary Janet Yellen has warned.

    Yellen on Friday told CNN’s Christiane Amanpour that the impacts would be felt by every American.

    “If that happened, our borrowing costs would increase and every American would see that their borrowing costs would increase as well,” Yellen said. “On top of that, a failure to make payments that are due, whether it’s the bondholders or to Social Security recipients or to our military, would undoubtedly cause a recession in the US economy and could cause a global financial crisis.”

    She added: “It would certainly undermine the role of the dollar as a reserve currency that is used in transactions all over the world. And Americans — many people — would lose their jobs and certainly their borrowing costs would rise.”

    Dire warnings of debt ceiling trouble aren’t new. Federal lawmakers have reached agreements in the past, and this Congress has some time — until at least early June, according to Yellen’s public estimates — to reach an agreement on whether to raise or suspend the debt limit.

    Many economists say they expect an agreement will be reached. However, given the current “extremely fractious political environment,” it could be a long process that would contribute to “flare-ups” in financial market volatility, Moody’s Investors Service said in a note Thursday.

    Such volatility is coming at a time when the Federal Reserve is trying to bring down inflation while navigating a soft (or softish) landing with minimal harm to the economy.

    So what happens to the economy in a worst-case scenario of default?

    It’s an understandable question with an unsatisfying answer, said Michael Pugliese, vice president and economist with Wells Fargo’s corporate and investment bank.

    “The honest truth is, no one knows,” he said. “A widespread default by the US government is not something we’ve ever experienced and not something we’ve ever even come close to experiencing.”

    While a default isn’t something that can be modeled in the way a more historically common economic event such as a recession can be, the events of 2011 could lend some perspective as to what would happen if the debt ceiling drama turns into a debacle, said Gregory Daco, chief economist at EY-Parthenon.

    “2011 was the first time in a long time that we came close to a debt ceiling breach,” he said. “And that was a time when there was a lot of political fragmentation and there was a strong desire to essentially attach spending cuts to any debt ceiling increase.”

    The current environment includes similar brinksmanship and desires to attach spending cuts, he said.

    But some fear this fight may be tougher than those in the past, a concern reinforced by the fact it took 15 ballots to elect the Speaker of the House in what is normally the easiest vote taken by a new Congress.

    The economy nearly 13 years ago was different, as well.

    At the time, the Fed was in an easy monetary policy mode and the economy in a weaker position, as it was still recovering from the Great Recession of 2008, Pugliese said. Unemployment was north of 9% in July 2011.

    That same year, Treasury projected the “X date” — the date on which it would be unable to pay its obligations on time — would fall on August 2, 2011. That ultimately was the date when Congress passed, and President Barack Obama enacted, a law increasing the ceiling.

    The actual economic impact of the debt ceiling run-up in 2011 is hard to isolate and quantify, Pugliese said, noting how the sluggish US economic recovery also experienced spillover effects from global events, notably Europe’s sovereign debt crisis.

    Still, there were some indications that the protracted congressional battle contributed to a shake-up in the economy then, he said. Real GDP growth was a weak -0.1% on a quarter-over-quarter annualized basis in the third quarter of 2011. Financial markets were roiled, consumer confidence weakened, the US economic policy uncertainty index set a new high and Standard & Poor’s credit rating agency downgraded the United States to AA+ from AAA.

    “I think you would be hard pressed to say [the debt ceiling debacle] was a positive thing,” he said. “I think of it more as one other hurdle among a lot of other hurdles for the economy as it emerged from 9% unemployment at the time.”

    This time, if the X date were to come without a resolution, there is speculation that the Treasury could prioritize principal and interest payments to prevent a technical default, Pugliese said. There are potentially other “break the glass” options from the Treasury and Federal Reserve, but those are untested and short-term solutions, he added.

    “Someone, somewhere is going to get shortchanged if the government doesn’t have all of its money, whether that’s Social Security beneficiaries, defense contractors, civil service employees, veterans, [etc.],” he said.

    Joggers run past the Treasury Department on January 18, 2023, in Washington, DC.

    Adding to the uncertainty is the current economic climate, Daco said.

    “We are going into this delicate period at a time when the US economy is clearly slowing down and at a time when the global economic backdrop is also weakening … so the economic environment against which this debt ceiling debacle is unfolding is one of increased economic softening.”

    While a self-inflicted recession would be likely after the point when an X date is hit, some upheaval could come sooner, Daco said.

    “Financial markets and private sector actors tend to react ahead of that date,” he said. “If there is the anticipation that we will get very close to that drop-dead date, then financial market volatility generally tends to increase, stock prices tend to react adversely.”

    A Treasury default would undermine the global financial system, said Louise Sheiner, policy director at the Hutchins Center on Fiscal and Monetary Policy and former senior economist with the Fed and the Council of Economic Advisers.

    “If Treasuries become something that people are worried about holding, then that has ripple effects throughout capital markets throughout the world, in ways that are really difficult to predict,” she said.

    Considering the potential consequences in the United States and abroad, Sheiner believes the debt ceiling will be lifted or suspended — eventually.

    “There’s no other way around it,” she said. “There’s no way that Congress is going to cut spending 20% in the middle of the year. It would plunge the economy into a recession. It would be a terrible policy.”

    She added: “If you care about the long-term debt, you have to actually change different laws, Social Security law, Medicare, or the tax law … you want to do that in the appropriate process, you want to do it well thought out. It’s not the kind of thing that should be done under duress.”

    CNN’s Maegan Vazquez, Matt Egan and Tami Luhby contributed to this report.

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  • Yellen warns of ‘global financial crisis’ if US debt limit agreement isn’t reached | CNN Politics

    Yellen warns of ‘global financial crisis’ if US debt limit agreement isn’t reached | CNN Politics

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    CNN
     — 

    Treasury Secretary Janet Yellen on Friday warned of the widespread global effects that could be felt if the federal government exhausts extraordinary measures and fails to raise the debt ceiling, telling CNN’s Christiane Amanpour about the ways everyday Americans could face stark consequences.

    Yellen’s warning comes after the United States on Thursday hit its $31.4 trillion debt limit set by Congress, forcing the Treasury Department to start taking extraordinary measures to keep the government paying its bills.

    While those newly deployed extraordinary measures are largely behind-the-scenes accounting maneuvers, Yellen told Amanpour that “the actual date at which we would no longer be able to use these measures is quite uncertain, but it could conceivably come as early as early June.”

    Speaking exclusively to CNN from Senegal, Yellen said that after the measures are exhausted, the US could experience at a minimum downgrading of its debt as a result of Congress failing to raise the debt ceiling. The effects of the federal government failing to make payments, she argued, could be as broad as a “global financial crisis.”

    “If that happened, our borrowing costs would increase and every American would see that their borrowing costs would increase as well,” Yellen said. “On top of that, a failure to make payments that are due, whether it’s the bondholders or to Social Security recipients or to our military, would undoubtedly cause a recession in the US economy and could cause a global financial crisis.”

    “It would certainly undermine the role of the dollar as a reserve currency that is used in transactions all over the world. And Americans – many people would lose their jobs and certainly their borrowing costs would rise,” she continued.

    Yellen wrote a letter to House Speaker Kevin McCarthy on Thursday explaining the measures being taken, escalating pressure on Capitol Hill to avoid a catastrophic default.

    Hardline Republicans have demanded that lifting the borrowing cap be tied to spending reductions. The White House has countered by saying that it will not offer any concessions or negotiate on raising the debt ceiling. And so far, Yellen’s warnings have failed to spark bipartisan discussion, with both Republicans and Democrats reaffirming their rigid positions over the past week.

    As part of the debt issuance suspension period using extraordinary measures, the agency intends to sell existing investments and suspend reinvestments of the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund. Also, it will suspend the reinvestment of a government securities fund of the Federal Employees Retirement System Thrift Savings Plan.

    No federal retirees or employees will be affected, and the funds will be made whole once the impasse ends, Yellen said in the letter.

    “I respectfully urge Congress to act promptly to protect the full faith and credit of the United States,” she wrote.

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  • Opinion: The debt ceiling debate reveals how House Republicans are weaponizing the government | CNN

    Opinion: The debt ceiling debate reveals how House Republicans are weaponizing the government | CNN

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    Editor’s Note: Julian Zelizer, a CNN political analyst, is a professor of history and public affairs at Princeton University. He is the author and editor of 25 books, including the New York Times best-seller, “Myth America: Historians Take on the Biggest Lies and Legends About Our Past” (Basic Books). Follow him on Twitter @julianzelizer. The views expressed in this commentary are his own. View more opinion on CNN.



    CNN
     — 

    At the same time that House Republicans are setting up a committee to investigate the “weaponization” of government, they are weaponizing the government.

    Under the leadership of Speaker Kevin McCarthy, the GOP is warning President Biden that they will not vote to raise the debt ceiling when the US reaches its $31.4 trillion borrowing limit unless the administration agrees to draconian spending cuts.

    Never one to miss a good brawl, former President Donald Trump is urging his party to “play tough” on the issue to use it as leverage.

    If the crisis is not resolved and House Republicans don’t vote to raise the debt ceiling, the government won’t be able to borrow the money it needs to pay for spending that Congress has already approved. The US could be forced to default on its debt, ruining the credit rating that has made Treasury bills and notes one of the safest investments in the world. The government might have to delay paying benefits such as social security and salaries for federal workers.

    Delivering a stern warning last week, Treasury Secretary Janet Yellen stated that, “failure to meet the government’s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability.”

    Fearing that House Republicans are dead serious about deploying this budgetary missile – after all, the party is only a few years away from its concerted effort to overturn a presidential election – the US is expected to hit its ceiling as soon as Thursday, but the real crisis may not come until June. To keep things going, Treasury is investigating options such as shifting funds from one department to the other and temporarily stopping specific forms of federal investments.

    The fear running through Washington – and beyond – is that elected officials could prove unable to end the standoff, sending the country into default by this summer, creating global financial chaos and turmoil.

    The political battle that is unfolding is a result of Republicans becoming increasingly radicalized in what they are willing to do to achieve partisan power.

    The measure at the center of this dangerous game of chicken is not part of the Constitution. The federal debt ceiling was enacted by Congress in 1917 through the Second Liberty Bond Act, shortly before the US entered World War I, with the goal of granting the Department of Treasury increased flexibility in handling federal finances. Before, the department had to wait until Congress authorized more money every time that the government needed it.

    For decades, raising the federal debt limit remained a routine matter. Understanding that the government had to pay its bills, even when costs ballooned during times of war, Congress would pass the measure either on a temporary or permanent basis.

    To be sure, there were times when Congress came dangerously close to being too late, such as in April 1979 when the vote was not taken until the very last minute, although technical glitches resulted in about $120 million in debt payments being late.

    A few months later, the House adopted a rule – named after Rep. Richard Gephardt – which empowered the lower chamber to automatically raise the debt ceiling when they passed a budget resolution, tying the two issues together.

    In 1982, the federal debt ceiling was codified into law. The first time that the federal government was forced to take “extraordinary measures” to keep the money flowing was in September of 1985 when Democrats and Republicans could not reach agreement on a budget. Three months later, Congress permanently raised the debt limit to $2.1 billion.

    While there were votes taken against raising the debt ceiling between the 1980s and 2011, including by Democrats such as then-Senator Joe Biden in 2006, they were symbolic. Elected officials took this stand only after knowing that there were enough votes for passage. Expressing opposition to President George W. Bush’s spending on the war in Iraq was their goal—not grounding the economy to a halt.

    The truce against weaponizing this routine procedure ended in 2011. Tea Party Republicans, a radicalized version of Gingrich-era Republicans, were determined to vote against increasing the debt ceiling unless President Barack Obama agreed to massive spending cuts. The administration realized that the new generation of conservatives was not playing around. In this game of chicken, they resolved not to blink regardless of the fallout.

    In May 2011, the Department of Treasury undertook steps to keep paying for its obligations. A few days before funds were set to run out, the administration agreed to pay the ransom. The president signed the Budget Control Act of 2011 that would implement about $920 billion in spending cuts over 10 years and created a Joint Select Committee on Deficit Reduction to make recommendations for further cuts.

    The ratings agency S&P weren’t happy with how the negotiations had unfolded, downgrading the credit rating of the US. “The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed.”

    Since that confrontation, the Department of Treasury has continued to grapple with this issue, including in 2013 and 2014. Frustrated with having to navigate through these treacherous political waters, Obama warned that “the issue here is whether or not America pays its bills. We are not a deadbeat nation. And so there’s a very simple solution to this: Congress authorizes us to pay our bills.”

    Now, President Biden might face his biggest challenge yet. The new Trumpian Republicans are determined to win their faceoff with the administration. Based on reports of how McCarthy won the speakership, the Californian was willing to make concessions to the most radical members about moving forward with this strategy and following it through until the end, if necessary.

    What makes this situation so tragic is that there is no reason for this crisis to happen. While vigorous debates about government spending are certainly a legitimate part of politics, forcing a situation that could create economic chaos after Congress has already reached deals over expenditures should not be a legitimate and normal part of politics.

    More than almost any other act, this embodies the willingness of the modern GOP to use virtually any procedure of democracy—from Supreme Court appointments to the budget to the Electoral College—as a partisan weapon. House Republicans seem to be making the bet that doing what is necessary to force spending reductions is worth the risk of the financial fallout.

    At some level, they must believe that should the crisis not be resolved, voters will blame the president and not them. But in the end the people who would suffer would be voters, living in states red and blue, who would face the consequences.

    If Speaker McCarthy wants to show that he is a serious political leader, he should form a coalition with the handful of moderate Republicans and Democrats to quickly enact an increase in the debt ceiling this measure regardless of what risk that might pose to his own future.

    All of this is more reason for Congress to consider serious long-term reform. If one of the two major parties is willing to normalize the weaponization of this process, it’s time to change the way that it works, to take away the weapon being used in partisan warfare.

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  • The debt ceiling drama, explained in 2 minutes | CNN Business

    The debt ceiling drama, explained in 2 minutes | CNN Business

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    • Watch: Bannon lawyer pleads with judge to be removed from fraud case
    • Club Q shooting suspect Anderson Aldrich appears in court, charged with 12 new counts

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  • US deficit widens by $85 billion in December | CNN Business

    US deficit widens by $85 billion in December | CNN Business

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    Minneapolis
    CNN
     — 

    The US government recorded a deficit of $85 billion in December, bringing the total deficit to nearly $1.42 trillion for the 2022 calendar year, the Treasury Department reported Thursday.

    The government, which runs on a fiscal year that starts in October, is running a deficit of $421.41 billion for its fiscal first quarter of 2023, a 12% increase from the fiscal first quarter of 2022, Treasury data shows.

    December’s deficit was nearly four times as large as the $21.3 billion deficit recorded in December 2021 as spending grew and revenue fell last month. Receipts totaled $454.94 billion, while outlays were $539.94 billion in December 2022.

    Budget watchdog the Committee for a Responsible Federal Budget said the $1.4 trillion calendar year total is “staggering, considering the worst of the pandemic and the accompanying recession have been over for a long while now.”

    “We should not be borrowing $4 billion a day, an apparent debt addiction that is harmful to the economy and the budget,” Maya MacGuineas, president of the CRFB, said in a statement.

    The House Republicans’ rules package adopted earlier this week included measures aimed at reining in federal government spending and keeping a lid on taxes.

    The measures, several of which raised concerns even among cost-conscious Republican lawmakers, are sure to lead to battles later this year with the Democratic-led Senate and President Joe Biden that could have severe consequences.

    If the two parties can’t work out an agreement to fund the government for fiscal year 2024, which starts October 1, it could result in a shutdown. And if a war over spending cuts prevents Congress from raising the $31 trillion debt limit this summer or fall, it would risk a default on US debt that would roil the national and global economies.

    –CNN’s Tami Luhby contributed to this report.

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  • GOP leaders and McCarthy holdouts defend deals as some Republicans complain they’re in the dark | CNN Politics

    GOP leaders and McCarthy holdouts defend deals as some Republicans complain they’re in the dark | CNN Politics

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    CNN
     — 

    House GOP leaders and key negotiators won’t commit to publicly releasing details about the side deals Kevin McCarthy cut in order to secure the speakership, undercutting the Republican pledge to run their chamber openly and transparently and as some rank-and-file members call for more information about the promises that were made.

    While some of the concessions were spelled out in the House rules package, which passed with support of all but one Republican on Monday night, other promises – such as adding more members of the hard-right House Freedom Caucus to committees and putting conditions on raising the national debt ceiling – were made through a handshake deal, leaving some lawmakers in the dark about the full extent of what McCarthy agreed to.

    “Operating in a vacuum doesn’t feel good,” one GOP member told CNN. “We’ve been loyal and it’s a slap in the face.”

    Rep. Nancy Mace, who represents a swing district from South Carolina, said, “It is essential” that members and the public hear from the GOP leadership about what those promises were, expressing frustration about learning about some of the promises through the press.

    “We know that there were certain members of that faction that were trying to get committee chairmanships or special committee assignments. We won’t know how that shakes out until (the House GOP Steering Committee) does its thing,” Mace told reporters, referring to the panel that sets committee assignments and will make those decisions in the coming days. “There’s still some questions that I think many of us have about what side deals may or may not have been made, what promises are made, what handshakes are made.”

    Further adding to the frustration and confusion, there was another document flying around K Street listing out all the alleged McCarthy concessions even as House GOP Whip Tom Emmer of Minnesota asserted that the document is not completely accurate.

    On Monday night, McCarthy didn’t say whether he planned to release more details of the deals when asked by CNN. On Tuesday, House Majority Leader Steve Scalise of Louisiana would not explicitly promise to divulge the information. And Texas Rep. Chip Roy – who spent hours negotiating the agreement with McCarthy – and helped bring along the votes to get him the speakership, told CNN that much of what has been revealed has been publicly reported, contending that “there is no official list.”

    “Everything in life is about – how do you come to terms and agree?” Roy said. “You look somebody in the eye and you shake their hands and you move forward, and that’s precisely what happened.”

    At a closed door meeting on Tuesday, GOP leaders walked members through a slide presentation, detailing some of their budget and spending priorities. According to a screenshot of the presentation, which was obtained by CNN, the spending agreement includes vague promises, such as “reforms” to the budget process and mandatory spending programs, which could potentially include Social Security and Medicare.

    Also, the other concessions include capping federal spending at fiscal 2022 levels, something defense hawks fear could slash Pentagon programs. Also, there’s a promise to reject “any negotiatons with the Senate” on government funding bills if they don’t meet the terms of the forthcoming House GOP budget resolution and don’t cut domestic spending. Those demands will almost certainly be a non-starter in the Democatic-led Senate, raising the prospects of a government shutdown in the fall or stop-gap measures to keep agencies funded.

    In one of the biggest concessions with major economic ramifications, the slide presentation said House Republicans “will not agree” to a raising the nation’s borrowing limit “without budget agreement or commensurate fiscal reforms.” That demand already has drawn sharp pushback from Senate Democrats and could prompt a huge fight with the White House with the prospect of a first-ever default looming sometime this year.

    In the Tuesday meeting, McCarthy walked members through the concessions that were included in the rules package, such as restoring the ability of any single member to call for a vote ousting the sitting speaker – a demand from the hard right and something that could threaten his speakership. But there are other deals, such as committee assignments for the holdouts and giving the hard right members more sway over the legislative process, that have yet to be publicly released. McCarthy has also agreed to hold votes on some of the Freedom Caucus’ legislative priorities, such as a border security bill, imposing term limits on members and a balanced budget amendment, according to lawmakers.

    Asked by CNN if the American people deserve to know the side-deals that were cut to secure the speakership for McCarthy, especially given the GOP’s claims of supporting transparent government, Scalise was non-committal.

    “The speaker talked about that today, and some of the things involved making sure that our committees are represented by a full swath of our membership,” Scalise said at a news conference. “It wasn’t any person was committed a committee.”

    The Louisiana Republican added that committee assignments have yet to be doled out, which are part of the agreement. “The committees have to produce bills that come out of committee that represent the full swath of our conference,” Scalise said. “And so that’s something the steering committee is going to take up, and those decisions haven’t been finalized yet.”

    But he still wouldn’t commit to releasing the information about McCarthy’s side deals after the committee assignments are set, which will happen over the next few weeks. Once the committees are populated, then the chairs get to pick their subcommittee chairs.

    McCarthy sought to quell some of the concerns of members, telling them during a closed-door conference meeting on Tuesday that there is no secret “three-page addendum” to the rules package, even as some lawmakers have said they have seen such a document, according to sources in the room.

    Roy insisted to reporters that all is on the up-and-up, pointing to a December proposal he and others released about their demands for more say in the legislative process. He was less clear on which of those proposals McCarthy has signed off on.

    “There’s no back room deals … there’s no three-page addendum … there’s no official list,” Roy said. “Do you ever write down notes? Do you ever sit down and talk through like, say, ‘Hey, what are we going to do to agree on spending?’”

    As McCarthy was laboring to get the votes last week and faced demands from 20 GOP holdouts, the negotiations happened behind closed doors and were spread out among multiple rooms, leaving some to wonder if it was done so by design as many have said they have not seen the full extent of the promises made.

    Roy defended their closed-door negotiations and said everything McCarthy agreed to has come out publicly, and he ticked off some of those items – including promises to vote on bills to impose congressional term limits, secure the border and balance the budget.

    “Of course you have to go sit down behind closed doors and not debate this stuff in front of the cameras,” Roy said. “There’s nothing, to the best of my knowledge, nothing that has been part of all that that isn’t very public – including, by the way, a commitment by the speaker to work with us about how the committees are represented.”

    Rep. Don Bacon, a moderate who represents a Biden-won district in Nebraska, said he has only been briefed verbally by one of the negotiators about the additional concessions, but said he feels comfortable with what he has heard.

    “They were at least verbally briefed to me,” Bacon said. “I feel comfortable with the rules that were presented.”

    Yet the rules package adopted by the House on Monday doesn’t include some of the other deals.

    Rep. Ralph Norman of South Carolina, another one of the McCarthy holdouts, defended the handling of the situation, arguing that some of the deals McCarthy cut weren’t included in the House rules package because they don’t pertain to the rules, which specifically operates how the House governs.

    He told CNN, “There’s no secret deal,” but acknowledged he does not know the full extent of promises the speaker made in order to secure the gavel.

    “All of this stuff is a moving target and there’s nothing,” he said. “There’s nothing clandestine about it.”

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  • Here’s how the House GOP majority will try to curb federal spending and taxes | CNN Politics

    Here’s how the House GOP majority will try to curb federal spending and taxes | CNN Politics

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    CNN
     — 

    In adopting their rules package Monday, the new House Republican majority has made it clear that they want to rein in federal government spending and keep a lid on taxes.

    The package, which governs how the chamber will operate for the next two years, lays out several measures aimed at making it harder to hike spending and to increase taxes to pay for it. Some of the provisions have been in effect previously when the GOP has controlled the House.

    The measures, several of which raised concerns even among cost-conscious Republican lawmakers, are sure to lead to battles later this year with the Democratic-led Senate and President Joe Biden that could have severe consequences for the nation.

    If the two parties can’t work out an agreement to fund the government for fiscal year 2024, which starts October 1, it could result in a shutdown. And if a war over spending cuts prevents Congress from raising the $31 trillion debt limit this summer or fall, it would risk a default on US debt that would roil the national and global economies.

    “I’m worried about the types of fiscal goals that they’re setting, that they’re not going to be achievable, and they’re setting themselves up for failure,” said Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget. “I’m also worried that instead of both parties negotiating in good faith, we’ll be stuck in one of these dangerous standoffs.”

    The package swaps the pay-as-you-go rule for a cut-as-you-go requirement, as existed the last time the GOP ran the House.

    The former mandates that any new spending or tax cuts have to be paid for by spending cuts or tax increases elsewhere. But the latter requires only new spending be paid for, making it easier to cut taxes, said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

    Another provision would restore the requirement that tax rate increases be approved by a 60% supermajority vote, making such efforts harder to pass and limiting lawmakers’ options to reduce the deficit or raise spending.

    Plus, the package makes it harder for House members to game the system by proposing legislation that would not raise spending in the first decade, the typical time frame Congress considers, but would in subsequent years. It does so by establishing a point of order, or an objection, against consideration of such a bill.

    What may prompt even more chaos on Capitol Hill are the side deals that House Speaker Kevin McCarthy made with conservative members of his party last week to secure their support for his leadership. The details of those agreements have yet to be made public, which has annoyed more than a few GOP lawmakers.

    McCarthy signed off on a pledge that the Republican-led House would pair any debt ceiling increase to spending cuts, which would add even more complexity to what’s expected to be difficult negotiations within the GOP and between the two parties.

    What’s more, McCarthy agreed to approve a fiscal year 2024 budget capping discretionary spending at fiscal year 2022 levels. That would require cutting all domestic discretionary spending by roughly 25% in inflation-adjusted dollars if defense funding is protected, Akabas said.

    Just how wed to these measures conservative Republicans are will determine the depth of the dysfunction in Congress this year. McCarthy’s slim majority in the House means he needs the support of nearly everyone in the party to pass any legislation.

    “It has yet to be seen whether these are immovable policy positions or policy preferences that are the starting point for negotiations,” Akabas said.

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  • Analysis: The speaker fight is over but the chaos is just beginning | CNN Politics

    Analysis: The speaker fight is over but the chaos is just beginning | CNN Politics

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    A version of this story appeared in CNN’s What Matters newsletter. To get it in your inbox, sign up for free here.



    CNN
     — 

    This is not the end of House Speaker Kevin McCarthy’s nightmare, rather just the beginning.

    Having won the coveted job, the California Republican has leveled up to a new series of challenges with higher stakes for all Americans, and less room for error for a man who needed 15 tries to get the gavel.

    Related: Read this profile from McCarthy’s hometown

    This week Republicans must try to coalesce around the concessions McCarthy made and pass a package of rules to govern the House for the next two years. It’s an open question whether the party’s moderates, such as they are, will all buy in to the cut, cut, cut mentality McCarthy has agreed to.

    Unlike the Senate, which has standing rules that carry over from year to year, the House adopts a new rules package for each Congress. This year, in particular, as they take over from Democratic control, Republicans want to make their mark in the rules package. The Rules Committee has posted a text and summary of the proposed rule changes.

    Some of the new elements include things that amount to framing – replacing “pay as you go” language for budget matters with “cut as you go.”

    Other elements could have more concrete consequences, like forcing specific votes to raise the debt ceiling and enacting spending cuts before the debt ceiling is raised. That debate will come to a head in the coming months as the government runs out of authority to add to the $31 trillion national debt.

    On Sunday, Republicans all said they would try to avoid cutting defense and Medicare spending, which leaves a relatively small portion of the federal budget – think the Environmental Protection Agency and other regulatory arms of the government – from which to carve out spending.

    The other way, besides spending cuts, for the government to cut down on deficit spending, is to raise taxes. The proposed rules reinstate a requirement that a House supermajority of 3/5, rather than a simple majority, sign off on any tax increases.

    If McCarthy fails to live up to these promises, the rules also allow for any member to force a vote on a “motion to vacate the chair” – ousting him from the speaker’s chair – at any time. It would only take a handful of Republicans, along with all Democrats, to oust him.

    This rules package effectively limits his ability to negotiate with the Democrats who run the rest of the federal government. McCarthy can marshal House Republicans to vote for steep spending cuts, but his greatest difficulty will be in finding legislation that can pass the House and not be immediately rejected by the Senate or vetoed by President Joe Biden.

    Just like with his quest to be speaker, McCarthy will rely only on Republicans to pass the rules package and he can only afford to lose four.

    Republican Rep. Tony Gonzales of Texas has already said he will oppose the rules package because he worries it will lead to cuts in defense spending.

    “How am I going to look at our allies in the eye and say, ‘I need you to increase your defense budget, but yet America is going to decrease ours,’” Gonzales said on CBS’ “Face the Nation” on Sunday.

    Another Republican, Rep. Nancy Mace of South Carolina, said on the same program that she likes a lot of the rules package, but she is “on the fence” about it because it was formulated behind closed doors with fringe Republicans.

    It’s an irony both that the rules package is perceived as being hashed out behind closed doors and that those who held out on supporting McCarthy argued they were achieving a path to a more open government.

    We don’t yet know all of the concessions McCarthy made to bring the ultra conservatives along. Rep. Chip Roy of Texas denied during an appearance on CNN’s “State of the Union” that he had been promised a position on the powerful Rules Committee, for instance. He said that would ultimately be up to the rest of the Republican conference.

    There was also some question about how McCarthy would enforce a pledge to cap spending for the 2024 fiscal year at 2022 spending levels.

    A main issue for Roy was that individual members should be able to offer amendments and get votes on spending bills on the House floor.

    Leaders from both parties have barred such amendments by the full House in order to pass bundled-up spending bills. They have relied on debate in the Appropriations and Authorization committees.

    Roy is among the critics who refer to Republican and Democratic leaders as the “uniparty” for this reason.

    “Too often bills are cooked up with handful of people, they’re brought through with the Rules Committee, jammed through, put on the floor and you have to vote yes or no,” Roy told CNN’s Jake Tapper on Sunday. “A little temporary conflict is necessary in this town.”

    He wants more of the openness and free form debate – the kind that Americans saw on the House floor during the speaker fight – to be present in spending discussions.

    “You say, ‘Well, are we going to have this kind of conflict going forward?’ I hope so,” Roy said.

    The idea that these debates are necessary was even being adopted by critics of the drawn-out speaker fight, like Republican Rep. Dan Crenshaw of Texas.

    “The more that you actually have everyone involved in it, the less likely it is that it gets blown up at the end,” Crenshaw told Tapper.

    But things will get increasingly difficult for McCarthy, and maybe the country, when he needs to negotiate with Senate Democrats and Biden – and also appease the fringe that does not mind a trip to the brink.

    Roy urged party leaders to work quickly and openly to find a path to raise the debt ceiling, rather than waiting until there’s a must-do-immediately moment.

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