Math Complicates House GOP’s Bid To Raise Debt Ceiling

In their quest to slash government funding, House Republicans have proposed capping spending for the next decade, which would be necessary to make the math work on their new debt ceiling plan. But those limits could also make holding on to the House more difficult.

The reason? The caps would either keep Republicans from boosting military spending, as many say is needed, or protect the Pentagon and veterans programs by forcing deep cuts elsewhere.

“If you start having some categories or programs held harmless, that necessarily means everything else on average is getting an even deeper cut,” said Bobby Kogan, senior director of federal budget policy at the liberal Center for American Progress.

The proposed annual caps would apply for the next 10 years to appropriations, the money lawmakers dole out annually to agencies like the Defense Department or Department of Health and Human Services. While the majority of federal spending is on autopilot with Social Security and Medicare, lawmakers battle each year to decide whether to plus-up defense or non-defense spending or, often, both.

In the bill text released Wednesday, annual discretionary spending starting Oct. 1 would fall back to levels set in 2022. Every year afterward, that total would increase by 1%, which is below historical rates of inflation and well below the 5% annual pace of recent price increases.

The upside for Republicans is that sticking to that limit for the next nine years would result in a sharp drop in spending that would make substantial progress in cutting the budget deficit. The bipartisan Committee for a Responsible Federal Budget projects the caps would save about $3.2 trillion compared to the Congressional Budget Office baseline.

But because the bill doesn’t specify where the cuts would be made, appropriators would have to make those decisions as they mark up bills funding the individual departments. And that’s where the math gets hard.

Simply applying the reductions equally to defense and non-defense programs would result in a 28% cut to both by 2033 after adjusting for inflation and growth in population, according to Kogan.

The White House’s Office of Management and Budget came up with a slightly different figure of a 22% cut, but that’s just in the first year and also assumes Pentagon funding would at least match this year’s level while non-defense spending reverted back.

“The speaker’s plan raises crucial questions for dozens of House Republicans,” Karine Jean-Pierre, the White House’s press secretary, said Thursday. “Will they vote to kill manufacturing jobs in their own home districts and reverse the reshoring of manufacturing from China? And will they vote to cut benefits for veterans in their own districts?”

Jean-Pierre even went so far as to call out individual Congress members, including Reps. Marjorie Taylor Greene (R-Ga.) and Mike Carey (R-Ohio), over whether they would support such cuts.

In his speech unveiling the plan, McCarthy dismissed concerns about the depth of the spending cuts.

“These spending limits are not draconian. They’re responsible,” he said. “Federal spending exploded in the past two years by 17%. And that doesn’t include trillions in COVID-era spending.”

Kogan said the math gets even worse for non-defense programs if other assumptions are made. If, for example, Republicans wanted to protect from cuts both military spending and veterans programs ― two politically popular items in many red districts ― the percentage cut for all other programs would rise from 28% to a whopping 58% by 2033.

“The Center for Disease Control and Prevention, they just would have 60% less staff or they can conduct 60% less research,” he said. “[National Institutes of Health] does a lot of cancer research. So, does that mean that 60% fewer projects get funded?”

That would just be to allow defense and veterans spending to grow with the inflation and the rise in population over the next decade. But with defense hawks worried about the prospect of a conflict with China over Taiwan and a history of annual defense increases averaging more than 5% a year since 2018, the Pentagon budget would likely grow above the baseline if House Republicans had their way.

Allowing for a 5% increase in defense spending each year would raise the non-defense cuts to a whopping 91%, Kogan said.

“This is not a serious proposal,” he said.

The Committee for a Responsible Federal Budget’s president, Maya MacGuineas, disagreed. In a statement after the plan was released Wednesday, she said, “This is a reasonable proposal, which would generate significant savings at a time when the nation desperately needs them.”

But with 18 House Republicans hailing from congressional districts won by President Joe Biden in 2020 and McCarthy only able to lose four and still push a package through the House, it’s unclear if GOP leaders will be able to corral the needed votes, especially if party moderates balk. Democrats have signaled the plan would be dead upon arrival in the Senate, giving vulnerable House members little incentive to vote for something that could easily be used against them in 2024.

On the opposite side of the party, some Republican hardliners have already begun pushing for changes to the plan, saying its language on work requirements for some federal benefits doesn’t go far enough. If they succeed in getting that issue reopened, it could embolden moderate Republicans to also seek changes.

“I would think that they would be unpopular,” Kogan said of the possible cuts, “because the costs are so extreme, and the things that it’s calling for are so severe.”