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What Did McCarthy Promise GOP Extremists in Backroom Deals?

Reports indicate that the new speaker expressed willingness to leverage the debt ceiling to pursue spending cuts.

Speaker of the House Kevin McCarthy is seen outside a House Republican Steering Committee meeting to select committee chairs in the U.S. Capitol on January 9, 2023.

Rep. Kevin McCarthy finally seized the House speaker’s gavel in the early hours of Saturday morning, capping off a chaotic week of voting and heated floor confrontations that were nationally televised and closely documented by reporters stationed at the U.S. Capitol.

What remains less clear, though, is how much McCarthy (R-Calif.) conceded to his far-right detractors behind closed doors to win enough support to prevail on the 15th ballot — raising urgent questions and warnings about the havoc the House GOP could wreak in the coming months.

“What did McCarthy promise to get the collaboration of extremists?” Rep. Mark Takano (D-Calif.) asked over the weekend. “The future of Social Security and Medicare? Our nation’s full faith and credit? Keeping our government open?”

Neither McCarthy nor the small faction of House Republicans that nearly sank his speakership bid have been fully transparent about the agreements that ultimately ended the impasse, but reports indicate that the new speaker expressed his willingness to leverage the debt ceiling to pursue spending cuts as well as potentially damaging changes to Social Security and Medicare.

The New York Times reported Saturday that McCarthy vowed “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… into his camp.”

Among the holdouts persuaded by McCarthy’s pledges was Rep. Ralph Norman (R-S.C.), who last week said the Republican leader should agree to “shut down the government rather than raise the debt ceiling,” an arbitrary borrowing limit that the federal government is expected to reach some time this year.

Norman was a member of the committee that, just last year, proposed raising the Social Security eligibility age to 70, means-testing the program’s benefits, and bolstering “private retirement options.”

Failure to raise the debt ceiling carries vast economic consequences, potentially eliminating 6 million jobs and $15 trillion in household wealth. In 2011, House Republicans used the debt ceiling process to secure what one economist called “an anti-stimulus” that “led directly to the worst recovery following a recession since World War II.”

Rep. Katherine Clark (D-Mass.), the new House minority whip, warned in an appearance on CNN Sunday morning that the debt ceiling agreement that McCarthy reportedly cut with GOP holdouts “is all about forcing us to make cuts to Social Security.”

“They are going to use the debt ceiling as leverage to take American seniors hostage,” Clark said.

McCarthy, who has previously embraced his far-right colleagues’ call for debt ceiling brinkmanship, will have little room to maneuver given another concession he granted to his erstwhile opponents: A single lawmaker will soon have the power to trigger a snap vote on whether to oust the speaker.

That change will be cemented as part of the rules package that the House is expected to vote on later Monday, a process that could prove tumultuous given some far-right Republicans’ continued grumbling over the proposal.

The slate of proposed rules also includes a measure known as CUTGO, which would require any new spending to be offset with spending cuts. Unlike the so-called PAYGO rule, CUTGO would not allow spending increases to be offset with tax hikes.

As Roll Call explained, Republicans would be allowed under the new rules to “pass tax cuts that would add to the deficit.”

“House Republicans made this same rule change when they took power in the 112th Congress and it’s an even worse idea now than it was then. CutGo is the antithesis of fiscal responsibility,” Rep. John Yarmuth (R-Ky.), the former chair of the House Budget Committee, said in a recent statement. “If Republicans adopt this proposed rule change, it will not only take a toll on our nation’s budget and productivity, but it will take a toll on Americans’ lives and livelihoods.”

But Politico reported Monday that most of McCarthy’s concessions “aren’t up for a vote today.”

“They are handshake agreements made as McCarthy desperately scrambled for votes last week,” the outlet noted. “McCarthy has promised floor votes on an array of priority bills from the conservative flank of his party, including on border security, term limits for House members, and a balanced budget amendment.”

“Promises have been made to try and cap discretionary spending at fiscal 2022 levels,” Politico added. “Those are lower than the current enacted spending levels, which would lead to a potential 10 percent cut to defense spending and additional cuts to domestic spending, which is sure to stir trouble in the Senate.”

The last time the GOP was able to force through a cap on domestic spending — using the debt ceiling as leverage — the results were highly destructive.

“People often invoke the damage done by the 2011 showdown over the debt ceiling,” Josh Bivens of the Economic Policy Institute wrote in a blog post last year. “They point to stock market losses, increases in ‘economic uncertainty’ indices, and estimates of how much higher interest rates went in the showdown’s aftermath. But they tend to miss what was by far the greatest damage done by the 2011 debt ceiling episode: the passage of the Budget Control Act (BCA), a piece of legislation that is relatively unknown to the lay public.”

“The BCA’s caps on federal spending explain a large part of why this spending in the aftermath of the Great Recession was the slowest in history following any recession (or at least since the Great Depression),” Bivens observed. “This federal spending austerity fully explains why the recovery from the Great Recession was so agonizingly slow.”

Speaking to the Post on Saturday, Sharon Parrott of the Center on Budget and Policy Priorities echoed Bivens on the impact of the BCA, calling it “incredibly damaging.”

The austerity imposed by the law, the Post reported, “fell hard on a wide array of agencies — from gutting child care spending to depleting the ranks of federal workers who oversee Social Security.”

Progressives fear that House Republicans, with their majority and a speaker in place, are looking to repeat history.

“McCarthy just agreed to a deal with far-right insurrectionists that would hold the entire U.S. and global economy hostage to extreme cuts to everything from housing to education, healthcare, Social Security, and Medicare,” Rep. Ilhan Omar (D-Minn.) said late last week. “Hard to overstate how dangerous this is.”