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January 9, 2023

What to expect in Washington (January 9)

Following Rep. Kevin McCarthy's (R-CA) election as House Speaker early Saturday after a late night and long week of voting, a focus is on how the legislative agenda will be impacted by the power wielded by conservative members and the additional power gained by them through concessions that were necessary to close out the speakership process. Showdowns over spending and policy in relation to the fiscal deadlines of the federal debt limit and funding the government now seem imminent because Rep. McCarthy delivered concessions on those issues, agreeing to not take up a debt limit increase without spending cuts and to bring up the 12 annual spending bills individually, not as an "omnibus" package, and to allow amendments.

Gaining the necessary votes for Speaker required acceding to concessions that GOP leaders previously resisted. The Washington Post reported that Rep. McCarthy last week told a group of holdout members "his offer was to become the 55th speaker by significantly weakening the position and empowering his party's hard-liners," and "the Wednesday night meeting became the basis for a framework agreement hammered out over two more days and six more rounds of voting." Months of posturing gave way to serious talks on House operations with a focus on spending bills, the report said, and put the chamber on course for more crises, on spending or the debt limit.

The debt limit won't need to be addressed until the third quarter of 2023, according to a Bipartisan Policy Center forecast. Congress raised the limit in December 2021 following relatively controversy-free years when Democrats agreed to address the limit under the previous administration. A Saturday New York Times story noted the prominence of the issue in the Speakership contest and the potential for a difficult process as the need to address the limit approaches, saying: "the next round of debt-limit brinkmanship could be the most fraught on record — as evidenced by the battle over the speakership. Conservative Republicans have already made clear that they would not pass a debt-limit increase without significant spending curbs, likely including cuts to both spending on the military and on domestic issues not related to national defense …

"'Is he willing to shut the government down rather than raise the debt ceiling?' Representative Ralph Norman of South Carolina, who was one of 20 Republicans to initially vote against Mr. McCarthy on the House floor, recently told reporters. 'That's a non-negotiable item.' Mr. McCarthy appeared to agree to those demands, pledging to allow open debate on spending bills and to not raise the debt limit without major cuts — including efforts to reduce spending on so-called mandatory programs, which include Social Security and Medicare — in a deal that brought many holdouts, including Mr. Norman, into his camp."

The Saturday Wall Street Journal (WSJ) reported, "Rep. French Hill (R., Ark.), an ally of Mr. McCarthy who had been involved in the negotiations, said lawmakers agreed to have spending cuts tied to any legislation regarding the debt ceiling, which Congress might need to raise later this year to avoid a default on the nation's debt. Democrats are adamant that they won't allow Republicans to pressure them into using the debt limit to cut federal programs. 'There will be no clean increase in the debt ceiling,' said Rep. Scott Perry (R., Pa.), chairman of the Freedom Caucus and a member who changed his vote in favor of Mr. McCarthy. Part of the agreement calls for the House to pass a resolution outlining how it would balance the federal budget within a decade … That could involve attempts to raise the eligibility age for such programs as Social Security and Medicare, as well as widespread cuts across other programs."

Government funding and the debt limit aren't the year's only deadlines. Another WSJ story said, "One place where Republican fissures were already expected to hand Democrats some leverage is the next farm bill, the cornerstone of U.S. food and agriculture policy, which expires at the end of September. Although the measure is a priority for many rural GOP districts, Republicans have previously split over its spending on food stamps, as well as for some programs supporting U.S. farmers growing certain commodities … Incoming House Agriculture Committee Chairman G.T. Thompson (R., Pa.) said the leadership fight wouldn't change the inevitable calculus that the farm bill will need to be bipartisan to both pass the House and become law."

Rep. McCarthy was also reported to guarantee conservatives seats on the House Rules Committee and other top committees, and to loosen a "Motion to Vacate" option allowing any member to call for a vote on the Speaker's ouster. Some of the new rules are to be voted on tonight. Punchbowl reported that, in addition to the package unveiled last week, there is a separate addendum reflecting agreements made with conservatives.

Today, the House Steering Committee meets to consider contested committee chairmanships, including the three-member race for the Ways and Means chairmanship among Reps. Vern Buchanan (R-FL), Jason Smith (R-MO), and Adrian Smith (R-NE).

Other House business for the week may include bills to roll back the Inflation Reduction Act (IRA) IRS funding increase (Family and Small Business Taxpayer Protection Act, H.R. 23) and to restrict uses of crude oil from the Strategic Petroleum Reserve.

Meanwhile, the Senate is in pro forma session through January 23. Senator Ben Sasse (R-NE) officially resigned at 12:00 noon on Sunday. Nebraska Gov. Jim Pillen (R) will select his replacement.


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Washington Council Ernst & Young
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