Backlash Grows Over McCarthy’s Handshake Agreement with the White House

( – Former House Speaker Kevin McCarthy (R-CA) and President Joe Biden reached a handshake agreement in May 2023 in the waning hours of the deadline to raise the budget ceiling before the nation faced financial default. McCarthy’s negotiation secured the Fiscal Responsibility Act (FRA) of 2023. Now, with McCarthy ousted from the Speakership, a backlash is growing over the agreement.

The Debt Ceiling Deal

McCarthy secured the administration’s promise to hold 2024 discretionary spending at fiscal year 2023 levels with no increases and held the 2025 increase in discretionary spending to 1% without allowing any increases in taxation. In return, the then-Speaker had to agree debt caps wouldn’t extend beyond the fiscal year 2026, allow the administration to redirect only a quarter of the $80 billion awarded to the IRS in the Inflation Reduction Act, spread over two fiscal years to non-defense discretionary spending, as well as unused relief program dollars from coronavirus initiatives. Joel Friedman, the Center on Budget and Policy Priorities’ senior vice president, estimated recissions could amount to as much as $69 billion annually.

Yet, the far-right faction of the GOP caucus felt McCarthy gave the administration far too much by compromising on Republican demands that the administration must agree to cut the budget by nine percent or face default — a non-starter for the administration. Under the conservatives’ direction, McCarthy initially approached the administration with several other demands, as well, most of which the parties had to set aside to reach a deal.

That Was Then, This Is Now

As the Republican-led House struggles to craft appropriations bills, Freedom Caucus members have suggested that the deal his predecessor made doesn’t bind recently selected House Speaker Mike Johnson (R-LA), pushing him to implement deep budget cuts like those rejected during the negotiation process in May. However, in a December 7 letter to his House GOP colleagues, Johnson pointed out that the FRA became “the law of the land, supported by over two-thirds of our Conference.” He said the legislation provided “the framework” for negotiating final budget outcomes.

Yet, on December 8, House Freedom Caucus members issued a multi-point “Policy Festivus” on X, formerly Twitter, and elsewhere, drawing a deep red line in the sand. The caucus demanded

  • Reductions in year-on-year programmatic spending and transparency,
  • A rejection of “side deals, gimmicks, or any […] mechanism” that hides actual budget numbers,
  • A halt to supplemental security spending for Ukraine or any other foreign nation until the administration implements and verifies significant border security improvements while offsetting the cost with reductions elsewhere in the budget,
  • A requirement for any border security legislation to include the provisions enumerated in HR 2: The Border Security Act, which the House passed in May but remains stalled in the Senate.

The manifesto indicated that House Freedom Caucus members would no longer accept continuing resolutions or the status quo and would actively leverage all possible means to create change.

~Here’s to Our Liberty!

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