Fallout emerged from McCarthy’s handshake negotiations with the White House

Concerns are growing among lawmakers on both sides of where a handshake deal is emerging between the White House and former Speaker Kevin McCarthy (R-Calif.) on spending. they discuss how to finance the government in the new year.

The Biden administration and GOP leaders worked to pass legislation known as the Fiscal Responsibility Act (FRA) in late spring as part of a broader deal to end the debt ceiling. and set up spending for Congress to work from when it is completely eliminated- year funding bills months later.

But now that Congress is trying to increase its annual work, the important parts of that monthly agreement were not reflected in the law in question as the ultraconservatives, in pursuit of reducing the deficit in the amid debt, said Speaker Mike Johnson (R). -La.) doesn’t see what the Democrats are saying as the full statement made by McCarthy.

“A deal is a deal is a deal,” said Sen. Brian Schatz (D-Hawaii), who serves on the Senate Appropriations Committee, this week. “I don’t think there’s any way we’re going to get to an equitable distribution if people can’t keep their commitments.”

In a letter to Republicans this week, Johnson said the FRA remains “the law of the land” to “provide the framework” for spending talks as both chambers work to reach an agreement. Top for funding is 2024.

On paper, the lawmakers agreed on the basis of spending $ 1.59 million, or about $ 886 billion for defense spending and almost $ 704 billion for spending for 2024. unprotected side, including canceling billions of dollars in IRS funding and intending to reinvest in unprotected programs.

The IRS received $ 80 billion in additional funds last year, to be spent ten years later, in the administration of Biden’s Inflation Reduction Act (IRA), which greatly worries Republicans. As part of the debt negotiations, the parties agreed that a quarter of the money could be used again in the calculation of the years.

Ten billion dollars will be cut from the IRS for fiscal year 2024 and another $10 billion for fiscal year 2025, in addition to unprotected statutory funds, the report said. of the White House earlier this year.

“We haven’t gotten to every line item in this bill,” Office of Management and Budget (OMB) Director Shalanda Young said in May. But he said lawmakers will “use the IRS’s repeal of the IRA on the legislative side.”

“Again, we don’t dictate how,” he said, “but they’re going to spend $10 billion every two years, and then they’re going to use it again at discretion.”

The amount of $80 billion will provide $200 billion in revenue over the 10-year budget window for a reduction in spending of $120 billion, according to the Congressional Budget Office. The back-of-the-envelope numbers suggest that the $20 billion recycled would add $30 billion to the deficit, if not spent on revenue-generating programs.

White House officials also noted plans to re-use other exemptions from coronavirus relief funds, which they said had been rolled back into law.

But as funding talks continue between leaders in both chambers, the House Freedom Caucus is turning up the heat on Johnson to hold the line, demanding in a letter Friday any compromise on the top line for government funding for the 2024 budget “very important. reduce the amount of program spending year after year.”

The group also called on lawmakers to reject “tricks, tricks, or any other method designed to hide the real number.”

“I think it’s important that we stick to the ($1.59 trillion), which is what the FRA agreed to,” said Rep. Andrew Clyde (R-Ga.), a member of the the House Freedom Caucus is also a target. week. “I mean, everybody voted for it. If we don’t do that, I think that’s a problem.”

But Democrats and advocates are balking at the pushback.

Rep. Pramila Jayapal (D-Wash.), head of the Progressive Caucus, told The Hill this week that she was “very” concerned about the possible cuts. “It should be everything.”

Sen. Jeanne Shaheen (DN.H.) — her committee partner who puts together the annual budget bill for the departments of Commerce, Justice and other agencies — also accused Republicans of “denial,” adding the funding change to the defenseless side makes a difference for his committee mate.

With the agreement on the side involved, Michael Linden, a former OMB official who was part of the Biden negotiating team that canceled the debt ceiling, argued that the entire agreement of will provide a “minimum reduction” in the area of ​​defense and “non-funding – defense expenses – a real reduction, because prices go up every year .

“The fact that it was a concession — a big concession — was made in the service of avoiding this kind of back-and-forth nonsense, this ridiculous process, and just allowing Congress to pass the bills. basically, this is what the Republicans said they wanted,” he said in an interview on Thursday.

Joel Friedman, senior vice president of public finance policy at the Center on Budget and Policy Priorities, said the deal could bring negotiators north of $60 billion in additional funding that could be redirect to the unprotected side.

“The only way you can apologize for not protecting $69 billion in bilateral trade,” he argued. “If you didn’t have that, 9 percent would be in unprotected programs.”

“If it had been a 9 percent cut, the White House would not have signed it. Senate Democrats and House Democrats would not have signed the deal. They would not have been able to reach an agreement,” he said.