Hageman to Break With McCarthy, Oppose Debt Deal

By Jacob Gardenswartz

Special to the Wyoming Truth

WASHINGTON — Despite having deftly navigated intra-party tensions throughout her tenure in Washington, Rep. Harriet Hageman (R.-Wyo.) intends to break with House leadership and oppose a bipartisan measure to raise the debt limit during a crucial vote on Wednesday evening, the Wyoming Truth has learned.

Unless Congress acts soon, the United States is poised to default on its debt — something which has never before happened in American history and could spell catastrophe for global financial markets. After months of negotiations, party leaders over the weekend announced a breakthrough agreement to avoid such a fate.

The compromise would suspend the debt limit, currently set at $31.4 trillion, through 2025. In exchange, non-defense discretionary spending — federal dollars spent on matters apart from the military, Medicare and Medicaid — would be capped for two years. New work requirements also would be imposed on some adults receiving government benefits, though those restrictions would not be as severe as the ones Republicans had initially proposed.

President Joe Biden and House Speaker Kevin McCarthy (R-Calif.), who brokered the agreement, praised the deal and urged members of their respective parties to support it.

“It is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone,” Biden said in remarks from the White House on Saturday.

The agreement includes “historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce [and] rein in government overreach,” McCarthy added in his own Saturday press conference.

But rank-and-file Republicans and Democrats have come out against it — raising concerns about whether the agreement will pass before the so-called “X date” on June 5, when the federal government will run out of money.

“This deal fails, fails completely,” Rep. Scott Perry (R-Pa.), chair of the far-right House Freedom Caucus, said during a press conference on Tuesday. “These members and others will be absolutely opposed to the deal. And we will do everything in our power to stop it.”

“There are some provisions we are seriously concerned about,” echoed Rep. Pramila Jayapal (D-Wash.), chair of the House Progressive Caucus, in a call with reporters. She said her members are discussing whether to oppose the measure outright, though a decision had not yet been made.

While not formally a member of the Freedom Caucus, Hageman remains ideologically aligned with the conservative group and is close with many of its members. After the historic series of votes for House Speaker, in which several Freedom Caucus members withheld support for McCarthy over 14 ballots, Hageman told the Wyoming Truth that she saw herself as “right in the middle” — sympathetic to many of the conservatives’ grievances, though she supported McCarthy on each vote.

Her decision to oppose the debt limit agreement will mark her first major break with leadership, no doubt boosting her conservative bonafides back in Wyoming, where many voters oppose most government spending. But it could also imperil her relationship with House leaders, who in negotiations with the president promised to deliver upwards of 150 Republican votes for the compromise measure and now face a sea of GOP defections.

A spokesman for Hageman declined to elaborate on her decision to oppose the bill, saying only that she’d release a statement after the vote, expected to take place Wednesday evening.

What’s in the agreement?

As Biden and congressional Democrats frequently highlighted, increasing the debt limit does not authorize additional spending; rather, it enables the government to borrow money to pay for programs which have already been appropriated.

Democrats initially proposed a so-called “clean” debt-limit increase with no strings attached, arguing any negotiation over the nation’s credit amounted to holding the economy “hostage.”

But Republicans, who maintain a narrow majority in the House, refused to give up one of their few points of leverage, instead passing a bill to raise the debt limit by $1.5 trillion in exchange for a decade of spending caps and several other GOP policy priorities. That measure was doomed in the Democratically-controlled Senate, and opposed by Biden.

The resulting bipartisan agreement represents a “compromise,” Biden said, “which means not everyone gets what they want.”

Rather than capping the debt limit at a new higher amount, it will be suspended entirely through 2025, meaning neither party would be forced to confront the issue again until after the upcoming presidential election.

Discretionary spending for 2024 would be capped at roughly the same level as this year and increase just 1% in 2025— effectively a budget cut as inflation is expected to far outpace that amount but a far cry from the 10-year cap initially proposed in the GOP bill.

Military spending would increase to $886 billion next year and $895 billion in 2025, in line with Biden’s proposed defense budget. But while some Republicans argue the cuts aren’t enough, others say the military spending appropriations are too low; Sen. Lindsey Graham (R-S.C.) has called the measure “catastrophe for defense.”

The bipartisan agreement does include several policies sought after by Republicans. It would end Biden’s freeze on student loan payments, requiring payments to recommence by the end of the summer. It would claw back $30 billion in unspent COVID-19 relief funding and around $20 billion of new funding to the IRS.

The bill also includes provisions to increase infrastructure development by streamlining the permitting process, mandating that only one federal agency can oversee environmental reviews and requiring such assessments to be completed within two years. It also greenlights Mountain Valley Pipeline, a West Virginia natural gas project long-sought by Sen. Joe Manchin (D-W.V.).

Perhaps most importantly to some in the GOP, it would impose new work requirements on Americans ages 50-54 who don’t have children living with them and receive government benefits like food stamps. Still, such requirements are far more lenient than the GOP initially proposed and include exceptions for veterans and the homeless.

According to the Congressional Budget Office, the federal agency tasked with estimating the fiscal impact of legislation, the agreement would reduce spending by about $1.5 trillion over the next decade, though federal revenues would decrease as a result of the funding cuts to tax assessors.

What happens next?

The fate of the bipartisan agreement remains an open question in the House, but the measure passed its first hurdle Tuesday night when a key committee cleared it to advance to the floor.

During a meeting of the House Rules Committee, which governs how legislation is allowed to be voted on, seven Republicans voted to move the bill forward. Two right-wing lawmakers joined the four Democrats on the panel in opposing it.

Conservatives have continued to ramp up their rhetoric against the package, with some going so far as to float ousting McCarthy over his support for it. In exchange for their support for his Speakership bid, McCarthy earlier this year agreed to lower the threshold to “vacate” the Speaker, meaning any one lawmaker can force a referendum.

But the speaker has continued to project optimism. “I’m confident we’ll pass the bill,” he told reporters Tuesday night. “If people are against saving all that money, or work reforms in welfare reform, I can’t do anything about that.”

Even if the measure passes the House Wednesday evening, it’s not all smooth sailing. The compromise still must pass the Senate, where some lawmakers have expressed concerns about provisions included in it. Any backdoor negotiations must be completed by June 5 to ensure the government does not default.

Neither of Wyoming’s senators, John Barrasso or Cynthia Lummis, have spoken publicly about their stances on the measure. But Majority Leader Mitch McConnell (R-Ky.) has come out for it, signaling Barrasso is likely to support it as well given his position in GOP leadership.

And while Lummis has spoken frequently about her desire for greater spending cuts, the agreement appears to touch on one of her priorities: cryptocurrency. Although not explicitly noted in the text of the bill itself, the compromise includes a White House commitment not to pursue Biden’s proposed 30% tax on crypto mining, according to Rep. Warren Davidson (R-Ohio).

Such a policy may be enough to earn Lummis’ vote. Senators have been told to stay in town this weekend to be prepared to take up the bill.