House Freedom Caucus sees an opportunity as the debt ceiling approaches – Washington Examiner

As the various congressional factions gather to fight over spending and the debt ceiling this summer, the House Freedom Caucus is ready to dig in as it senses a moment of opportunity and a chance to score concessions from House leadership on a host of issues as days tick down to the August recess.

The group of three-dozen conservatives, who have a history of picking fights with House leadership, have taken a variety of stances in the run-up to the fight as top House Republicans decide how to move forward on both the debt ceiling and a budget. In late May, the group laid down an initial marker by announcing its opposition to a clean debt ceiling bill, which pits the group against the Trump administration and Treasury Secretary Steve Mnuchin. They also called for spending cuts to go along with any raising of the debt ceiling and for the issue to be resolved by the month-long August recess.

The GOP bill is aimed at taking away Democratic arguments that the U.S. would "default" on the debt by making it clear that if the U.S. was suddenly unable to borrow, it would use the existing flow of tax receipts to keep up debt service payments, including the regular process of paying and taking out new debt, and making interest payments.

The U.S. would not be at risk of a "default" if those rules were in place, although the U.S. would be in a position of taking in less money than it usually spends. But some conservatives are fine with that, since it would force the government to make choices about where to spend the limited money it has.

That step would eliminate the threat of a default on the U.S. Treasury securities that make up the backbone of the global financial system, calling the bluff of a doomsday scenario of a worldwide financial crisis. Treasury secretaries of both parties, however, have said that such "prioritization" of the debt isn't feasible, and that market panic would be likely in any case.

That's the Freedom Caucus' plan. But one major blow to the group was President Trump's decision to side with Mnuchin over Office of Management and Budget Director Mick Mulvaney, a key ally of the group, on the debt ceiling fight. Mnuchin has made clear his desire for a "clean" debt ceiling bill, which the Senate is expected to vote on in July. Mulvaney wants reforms to be brought into the mix.

On the spending battle, one unusual stance the group has embraced is support for an increase in spending levels in a potential budget deal, but with a catch. To go along with higher spending levels, the Freedom Caucus wants reforms to welfare, including cuts that could bring in about $400 billion in savings, according to said Rep. Mark Meadows. Despite potential opposition, the North Carolina Republican is optimistic their proposal could make a final bill.

"Very realistic," Meadows said when asked about the proposal's prospects. "We've had work requirements up until actually some would argue that they're still in statute right now. We've had work requirements in the past. I believe that most Americans believe an able-bodied, single adult should be doing some type of work, whether it's vocational training, volunteering for a government or a job in order to get those benefits. Now, we're not talking about moms with children or grandparents with kids. We're talking about able-bodied single adults that should be required to do some kind of work."

Rep. Jim Jordan, R-Ohio, chairman emeritus of the group, admitted in an interview that while it seems counterintuitive for the Freedom Caucus to support this type of an increase in spending, it sees an opportunity.

"You hope we get a [budget] deal now, because if you don't, we know how it plays out. We've seen it six years in a row," Jordan said. "The smarter thing to do now is get an agreement on the budget. ... The budget's the gate. Nothing else can happen until you open the gate, right? You can't do any spending until you open the gate and get a number. You can't have tax reform until you get reconciliation; you can't get reconciliation until you have a budget 'til you open the gate.

"To open the gate, we conservatives, I think, are willing to entertain spending numbers we normally wouldn't be comfortable with," Jordan said.

Top members of the group have come out in support of the House Budget Committee's proposed $400 billion in cuts, although that could be pared to $150 billion, much to their chagrin.

"We're saying, You're the Budget Committee. You're the experts. If you think it's $400 [billion], let's go with $400,'" Jordan said, pointing to their desired welfare cuts.

The fight is expected to be the latest for the group of conservative hard-liners, who had a highly-publicized back-and-forth with GOP leadership and the White House over the American Health Care Act before ultimately coming on board thanks to an amendment allowing states to opt out of some essential health benefits. However, this new battle could be an opportunity for the caucus as it pushes for Republican leadership to take its proposals seriously in spending battles rather than forcing leaders to rely on Democratic votes to pass legislation.

Rep. Linda Sanchez, D-Calif., the vice chairwoman of the House Democratic caucus, floated the possibility that Democrats could withhold their votes on a "clean" debt ceiling bill to see if Republicans can govern on their own, although House Minority Whip Steny Hoyer, D-Md., poured cold water on that possibility if such a bill reaches the floor. However, Meadows said he doesn't believe any losses incurred by the caucus on this fight could affect their leverage or input in future fights.

"You win some, you lose some," Meadows said. "I'm in it for the long term. We find that we have a lot of allies when it comes to welfare reform and mandatory spending reform. A lot of guys are with us both publicly and privately, which I think would surprise some here on Capitol Hill.

"I don't know that we're looking at wins and losses as much as we are real savings moving forward," Meadows said.

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House Freedom Caucus sees an opportunity as the debt ceiling approaches - Washington Examiner