Kevin McCarthy’s Quiet Win Is a Big One

President Joe Biden indicated earlier this week he would be willing to discuss spending cuts in upcoming budget talks with Republicans, handing House Speaker Kevin McCarthy an early victory in a political game of chicken that threatens a default on the nation’s debt.

On Tuesday, Biden met with McCarthy and other congressional leaders at the White House. At the meeting, the president reportedly said he wanted the federal debt ceiling—the total amount of debt the United States is allowed to carry at any given point—to be raised without preconditions, a position he has held throughout the year.

While Biden said he would not be open to negotiations, after the meeting he said he was “prepared to begin a separate discussion about my budget and spending priorities.” It was an apparent nod to the Republicans’ efforts to slash spending after pandemic-era spending caused the long-growing federal debt levels to spike significantly during the Trump and Biden presidencies.

It’s a big concession after Biden’s non-negotiation stance, not to mention the prospects now for elements of the Republicans’ Limit, Save, Grow Act, which proposes bringing federal spending back to fiscal year 2022 levels, to make it into law. But it likely opens the door for more conflicts.

While Biden said he was open to discussions about his spending policies, the president has questioned what the Republicans plan to cut in their plan, noting that their proposal does not contain specifics and only suggests an across-the-board reduction in spending.

“Does it say what it’s going to cut? Or does it generically say what it’s going to cut?” Biden said in an exchange with reporters earlier this week. “You get the problem.”

At this point in the dialogue, McCarthy hasn’t dug into specifics of what the Republicans intend to cut—only what he doesn’t plan to touch.

Changes to programs like Social Security and Medicaid—feared to be racing toward insolvency—were long ago taken off the table in budget discussions. Other areas of the federal budget, like veterans’ health care and border security, are also unlikely to see cuts after McCarthy pledges earlier this winter to maintain that funding, contrary to recent Democratic messaging blasting the Republicans’ plan.

While some fiscal watchdog groups have suggested the across-the-board cuts to Biden’s budget could be feasible, others have warned that those reductions in spending could come with a steep price.

In a series of letters to House Budget Committee ranking member Rosa DeLauro earlier this spring, federal agency heads suggested the GOP spending cuts could mean reductions in their budgets by as much as 22 percent. These projected impacts are wide-ranging, from the Department of Justice’s estimated loss of roughly 11,000 positions, or 29.2 percent of the FBI’s workforce, to the need to shut down air traffic control towers at 125 airports nationwide, according to a Transportation Department letter.

Left-leaning groups like the Center on Budget and Policy Priorities (CBPP) say cuts to nondefense spending could exacerbate lingering financial stresses left behind by the COVID-19 pandemic, with funding maintained under McCarthy’s pledges resulting in significant cuts to health care, workforce development and affordable housing assistance, among other categories.

What’s more, the CBPP points out, many federal programs have yet to reach the inflation-adjusted levels they were at before the cuts in the 2011 Budget Control Act.

“Even with a recent boost in 2023, funding for non-defense programs outside of veterans’ medical care is about 3 percent below its 2010 level, adjusted for inflation, and 10 percent below when adjusted for both inflation and population growth,” CBPP analysts Joel Friedman and Richard Kogan wrote in a March 24 brief analyzing the Republicans’ proposal.

“Funding for these programs needs to rise to meet national needs, address shortfalls that hamper the delivery of government services, and help create an economy in which everyone has the resources needed to thrive,” according to Friedman and Kogan.

Contacted for comment, a McCarthy spokesperson characterized the Democrats’ concerns about the GOP plan as overblown.

“The Limit, Save, Grow Act brings federal spending back to FY-22 levels—where the federal government was operating under just 5 months ago,” the spokesperson wrote in an email. “Didn’t hear any Democrats complaining then about that level of spending, did you?”

Newsweek has reached out to the spokesperson for more information.