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May 15, 2023
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THE TOP
Happy Monday morning.
There are 17 days until the U.S. government potentially could default on its $31 trillion-plus debt. Speaker Kevin McCarthy said he wanted an agreement on raising the debt limit and cutting federal spending by this week. And as you could’ve already predicted, there’s no deal yet.
Here’s where things stand with the debt-limit negotiations.
House, Senate and White House negotiators met for three hours Saturday, and the aides will reconvene today. President Joe Biden is expected to meet with the Big Four Tuesday at the White House. The president is scheduled to leave Wednesday for the G7 meeting in Japan. Biden will want to see significant progress in the talks before his departure in order to insulate himself from any criticism over flying to Asia with a debt-limit breach looming.
“I remain optimistic because I’m a congenital optimist,” Biden said during a bike ride in Delaware on Sunday. “But I really think there’s a desire on their part as well as ours to reach agreement. I think we’ll be able to do it.”
We’ll also note that the Senate is supposed to leave town on Thursday until after Memorial Day. That could change depending on how the next few days unfold.
A quick briefing on how you should think about a potential bipartisan deal, should it come together:
No. 1: Budget caps: Republicans are seeking as much as 10 years worth of budget caps. Democrats are closer to two years. We’ll see if they can split that difference.
No 2: Covid funding: Republicans believe there’s roughly $60 billion in unspent Covid relief money that can be rescinded. Democrats have privately shown willingness to redirect some of that funding.
No. 3.: Permitting reform: Both parties want to streamline federal permitting regulations, although for drastically different reasons.
GOP leaders — plus Sen. Joe Manchin (D-W.Va.) — want to expand oil and gas drilling and build the pipelines needed to carry those fuels to consumers. Democrats want to ramp up wind, solar and renewable energy projects. Both parties also want to cut the timetable for big infrastructure projects.
Aides involved in energy policy met separately to begin hashing out what all this may look like.
No. 4: Work requirements: Biden signaled he may be open to additional work requirements for some federal aid programs but not Medicaid. The president said Sunday he wanted to see what Republicans were proposing:
We’ve mentioned this before, but aides in both parties tell us that the negotiating group is too big. It’s more than 10 people, which some participants view as too unwieldy.
Deadline: We expect Treasury Secretary Janet Yellen will release an update to the default deadline this week. Yellen has previously said that the Treasury Department could run out of money to fund government operations “potentially as early as June 1” if Congress doesn’t act. The Congressional Budget Office warned on Friday “that there is a significant risk that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations.”
Appropriations bills: House Republicans are likely to mark up a number of FY2024 spending bills in the Appropriations Committee on Wednesday and Thursday, including Military Construction-VA, Legislative Branch, Agriculture and Homeland Security.
Of course, there’s no deal on FY2024 spending levels right now, which makes these essentially messaging bills, especially the Milcon-VA package. Biden and Democrats have been hammering Republicans on potential cuts to veterans’ spending and other agencies in order to get back to FY2022 funding levels. This is House Republicans’ response.
But GOP appropriators were scrambling last week to figure out exactly how much to spend. This includes Rep. John Carter (R-Texas), who chairs the Milcon-VA subcommittee.
“We’ve got an imaginary topline,” Carter told us. “We don’t have any cuts in our bill. If anything, we’re going to add more money.”
We asked Carter how much additional funding there will be for veterans. “I don’t know yet. We’re working on it,” Carter responded. “Everyone who says we’re cutting VA is lying.”
But Rep. Rosa DeLauro of Connecticut, ranking Democrat on the Appropriations Committee, said big spending cuts must come from somewhere to meet the House GOP goal of reducing spending to FY2022 levels, or roughly $130 billion. If Republicans don’t cut the Pentagon or VA — or actually boost funding there — that means there will be even bigger reductions somewhere else.
“They did not protect veterans in their [debt-limit] bill,” DeLauro said, referring to the Limit, Save, Grow Act. “To be very honest, I don’t think very many of them have any idea what they voted on.”
— Jake Sherman and John Bresnahan
BUDGET WATCH
Arrington says he’ll ‘absolutely’ deliver a budget plan
House Budget Committee Chair Jodey Arrington (R-Texas) is bullish about his ability to produce a budget resolution — and better yet, one that balances.
In an interview at his office, Arrington told us he “absolutely” will deliver an FY2024 budget, though no timeline was provided for doing that.
“The goal is to have a path to a balanced [budget],” Arrington said. “What the path is, I can’t presume that on our members. But I can tell you we are making tremendous headway as a committee, so I am confident that we will have a path to balance our budget for the 10-year fiscal framework.”
The Bush administration alumnus also said he had a “good” relationship with Speaker Kevin McCarthy. This comes after the New York Times reported that McCarthy privately expressed a lack of confidence in Arrington. McCarthy allegedly went as far as to refer to Arrington as incompetent.
“I don’t think Speaker McCarthy would’ve asked me to lead the debt-ceiling proposal, as the author of it, if he didn’t have confidence in me,” Arrington said. “We’re on the same page.” The Texas Republican was the lead Republican sponsor of the Limit, Save, Grow Act.
Arrington also didn’t directly answer whether he committed to protecting popular entitlement programs such Social Security and Medicare. Instead, Arrington dismissed Democratic attacks accusing the GOP of slashing social programs as “distractions.”
“Democrats want to talk about anything but the responsibility they have right in front of them, which is the debt ceiling,” Arrington said. “It’s a diversion tactic.”
The budget fight has already been overshadowed by the ongoing debt-limit crisis. Those talks remain largely at a stalemate between congressional Republicans and the White House.
— Mica Soellner
Republicans plug away on Afghanistan, Biden probes
It’s another busy week in the investigation world.
McCaul vs. Blinken: House Foreign Affairs Committee Chair Michael McCaul (R-Texas) on Sunday stepped up his probe into the chaotic 2021 U.S. withdrawal from Afghanistan.
The Texas Republican called on five key officials — including the official who led the Afghanistan after-action review — to participate in transcribed interviews with the panel. Here’s the list of five officials who have been instructed to respond before May 22 to arrange an interview:
Jonathan Mennuti, the former acting chief of staff to acting undersecretary of State for management Carol Perez
Mark Evans, the former acting deputy assistant secretary for Afghanistan
James P. DeHart, the former lead of the Afghanistan Task Force
Jayne Howell, Bureau of Consular Affairs
Former Ambassador Daniel Smith, who led the State Department’s After-Action Review of the withdrawal
Despite a subpoena, McCaul has been stymied by Secretary of State Antony Blinken in his quest to obtain a dissent cable written by Kabul embassy staff ahead of the pullout. After pushing back the subpoena deadline multiple times with no compliance from State, McCaul is now moving ahead with holding Blinken in contempt of Congress. Meaning this matter may end up in federal court.
The House Foreign Affairs Committee could hold a markup on a contempt resolution as soon as this week, McCaul told us recently.
Biden investigations: House Oversight and Accountability Committee Chair James Comer (R-Ky.) made a startling statement on Fox News Sunday. Comer claimed an “informant” — presumed to be one whose allegations have led the panel to seek a June 2020 internal FBI document reportedly containing information relating to a bribery scheme involving President Joe Biden — is missing.
Here’s what Comer told Maria Bartiromo:
We later heard from Jessica Collins, the communications director for the Oversight Committee, who told us Comer wasn’t talking about the whistleblower who came forward with the Biden bribery allegations.
“What he was referring to is another whistleblower. Many key witnesses to the Biden family’s influence peddling schemes are either in court, potentially facing prison, or missing,” Collins said of Comer. “The whistleblower who has come forward about the FBI record alleging that then-Vice President Joe Biden engaged in a bribery scheme with a foreign national isn’t missing.”
— Max Cohen
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What we’re watching
Tuesday: The House Financial Services Committee will have key regulators testifying, including Michael Barr, the vice chair for supervision of the Federal Reserve, and Federal Deposit Insurance Corp. Chair Martin Gruenberg. D.C. Mayor Muriel Bowser will be in front of the House Oversight and Accountability Committee.
The Senate Banking Committee will have a hearing examining the failure of Silicon Valley Bank and Signature Bank that features testimony from the banks’ former executives. The Senate Finance Committee will hold a hearing on proposed House GOP funding cuts for the IRS and the impact on federal law enforcement and the deficit. Senate Appropriations will have Defense Secretary Lloyd Austin, Secretary of State Antony Blinken and Commerce Secretary Gina Raimondo talking about the path ahead for the U.S.-China relationship. It’s rare to see three Cabinet officials testifying at the same hearing.
Wednesday: House Financial Services will have the former executives from Silicon Valley Bank and Signature Bank. The Joint Economic Committee will hold a hearing on how the default crisis hurts U.S. businesses.
Thursday: The House Financial Services Committee will have a hearing on stablecoins. Senate Banking will have a hearing with banking regulators.
— Jake Sherman
THE MONEY GAME
Do you like a modern twist on Indian cuisine? Are you a Democrat? We’ve got a lunch for you today. Rep. Deborah Ross (D-N.C.) is hosting a fundraiser at Rasika in Penn Quarter. It will cost you between $1,000 and $5,000 to get in the door.
Are you looking for more of a bar vibe on this beautiful Monday? Rep. John Garamendi (D-Calif.) is hosting his own luncheon at Beuchert’s. You can get in there for as little as $500.
Want a cup of joe with Hawaii’s own Rep. Ed Case (D) today? He’s hosting a “post lunch dessert and coffee” at 1:30 today on the Hill.
— Jake Sherman
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Punchbowl News Presents
By transforming bill tracking and floor action with expert analysis from the Punchbowl News team, The Portal delivers concise, curated insights that cut through the noise, helping policy leaders win. Request a demo today.