Debt Deal: Disaster or Disappointment?

Joe Biden and Kevin McCarthy came to a deal to slightly lower federal spending.

You may read that projected federal government spending will decrease by $2.1 trillion over the next ten years. It won’t, and it is not even close.

As someone who has applauded Speaker McCarthy’s rhetoric for fiscal sanity over the past few months, it is hard not to conclude that the agreement follows the long Republican tradition of snatching defeat from the jaws of victory.

Does it cut spending?

Not really. It cuts some spending growth, but reports from former Trump Office and Management Budget Director Russ Vought tell us that the spending deal is meager at best. In a tweet, Vought wrote, “LOL. This is embarrassing that they have to rely on the four years of nonexistent caps to have @USCBO [U.S. Congressional Budget Office] jerry-rig the score. No chance this saves $2 trillion….”

Here is why Director Vought is more than skeptical about the supposed $2 trillion in savings.

According to House GOP sources who support the Orwellian Fiscal Responsibility Act, the agreed-upon spending caps are only mandatory for two years – not six, and can easily be waived for the last four years.

The $2 trillion savings only occur if all six years of caps remain in place. I guess a twenty-two-year-old who just arrived on Capitol Hill in January might fall for this bait and switch, but no one who has been around D.C. for more than a minute could possibly believe that the caps for years three through six would survive. I guess any cuts are better than no cuts, but it is clear that House GOP negotiators made a spending deal from a position of fear rather than strength. Hopefully, the voters of North Carolina will show their displeasure in a primary against U.S. Rep. Patrick McHenry, the Speaker’s lead negotiator.

Perhaps the House GOP won the 80-20 fight over forcing people who are on government assistance to seek a job.

Nope.

Here is how Reuter’s describes this ‘deal,’ “The deal does add work requirements to food aid for some people aged 50 to 54, but White House officials said the carefully worded text would mean that roughly the same number of people would be subject to the requirements as is the case under current law.”

Apparently, a Gen Xer or two out there may have to get a job rather than live on welfare based on this deal. But the White House doubts it.

So, Speaker McCarthy can claim to have put work requirements into the law, but apparently, they won’t actually cover anyone.

This is worse than leaving the issue out of the bill. Democrats, in future spending fights, will cite the Biden-McCarthy law as the high bar for work requirements in the future, effectively ending welfare work requirements.

Some permitting reform survived the negotiations, but since the green new deal tax credits survived the process, those reforms will largely benefit the left’s attempt to build bird-chomping off-shore windmills and massive solar collection ‘farms’ rather than cutting red tape to build much-needed new oil refineries.

It is also reported that those holding student loans will have to begin repaying those loans, something the Biden administration was going to be forced to do with the end of the Covid emergency and a pending Supreme Court decision. Now, due to the inclusion of a provision that doesn’t change anything, Gen Z’s and Millenials who had been skipping payments for three years will be able to blame Republicans rather than Biden for having to restart loan repayments. It never occurred to me that the GOP negotiators were political idiots, and I apologize to readers for that blind spot.

On the bright side, the agreement will make it so money authorized to be spent on the Covid emergency will no longer be available to be spent on the ended emergency. (Yes, that will be touted as a victory rather than common sense.)

And the other bright note is that about one-ninth of the $87 billion additional funding for thousands of newly armed and dangerous IRS agents that in 2022, a Democrat house with a six-vote majority and a Democrat Senate with a 50/50 tie was able to pass will be cut. I guess the Biden administration will now announce that to meet this cut, they will officially terminate the IRS investigation into whether the Biden family paid taxes on the millions of foreign dollars they received over the past decade.

One ramification of this bill is that Speaker Kevin McCarthy will likely face a vote to vacate the Chair. I would not support that action. But if I were a member of Congress, I would tell him to go back to the drawing board and do better with a vote to waive the debt ceiling for two weeks.

What an embarrassment. To be outwitted by Joe Biden is next to impossible. It is almost as if House Leadership never supported the original deficit reduction bill they passed a month ago, throwing it away like used toilet paper in the negotiation.

Rick Manning is the President of Americans for Limited Government.

Cross-Posted With Conservative Firing Line