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McCarthy’s Secret Deal With Biden

This has caused concern for both sides.

Lawmakers from both sides of the aisle are becoming increasingly uneasy about the status of an informal agreement between the White House and former Speaker Kevin McCarthy (R-Calif.) on spending as they navigate negotiations over next year’s government funding.

In the late spring, the Biden administration and House GOP leadership collaborated to pass the Fiscal Responsibility Act (FRA) as part of a broader deal to suspend the debt ceiling and establish budget caps for Congress. This framework was meant to guide the formulation of full-year funding bills. However, as Congress strives to advance its annual appropriations, certain crucial aspects of the months-old deal that weren’t included in the law have become a subject of contention. Ultraconservatives, seeking more significant cuts due to rising debt, argue that Speaker Mike Johnson (R-La.) isn’t bound by the complete commitment made by McCarthy.

Senator Brian Schatz (D-Hawaii), a member of the Senate Appropriations Committee, stressed the importance of honoring commitments, stating, “A deal is a deal is a deal.” In response, Speaker Johnson asserted in a letter to Republicans that the FRA remains the “law of the land” and serves as the framework for spending discussions in both chambers as they seek a top-line agreement for fiscal 2024 funding.

While lawmakers initially agreed to a base discretionary spending cap of $1.59 trillion for fiscal 2024, with approximately $886 billion allocated for defense and nearly $704 billion for nondefense, additional changes were proposed by the White House at the time. These changes included rescinding billions of dollars in IRS funding from the Inflation Reduction Act (IRA), redirecting the funds to nondefense programs. The IRS, having received $80 billion in additional funding last year, saw $20 billion repurposed for fiscal years 2024 and 2025.

As discussions on funding intensify, the House Freedom Caucus is urging Speaker Johnson to stand firm, calling for a significant reduction in total programmatic spending and rejecting any mechanisms designed to conceal the true funding number. Democrats and advocates are expressing concern about potential cuts, emphasizing the importance of maintaining the entirety of the initial deal. Critics argue that the overall agreement could result in a real cut to nondefense spending, despite the initial concession made to avoid procedural complexities. Some experts suggest that the handshake agreement could yield over $60 billion in additional funding for nondefense programs.