Senate fiscal hawks are making a steep set of demands in negotiations over the debt ceiling, driving an even harder bargain than the House rabble-rousers who won $2 trillion in cuts.
Sen. Mike Lee (R-UT) criticized the House framework, endorsed by the conservative Freedom Caucus, as “anemic,” while his Senate allies have named everything from a spending commission to a balanced budget as concessions needed to win their votes.
“If we were confronted with the House proposal, I don’t know how I can vote for that,” Lee told the Washington Examiner.
The Senate is expected to vote next month on a budget resolution that unlocks President Donald Trump’s agenda. The House approved its own resolution last month, linking the White House’s tax and border priorities to a $4 trillion increase in the federal borrowing limit.
But sweeping all of the priorities together is proving to be a challenge in the Senate, where Majority Leader John Thune (R-SD) can only afford to lose three Republican votes in a chamber he controls 53-47.
Sen. Rand Paul (R-KY) has already vowed to vote “no” if the debt ceiling is included, while the remaining fiscal hawks want specific commitments before lending leadership their votes.
Sen. Ron Johnson (R-WI) told the Washington Examiner he wants an “ironclad” guarantee that Republicans will form a deficit reduction panel that would be composed of Trump administration officials and lawmakers including himself.
Meanwhile, Sen. Rick Scott (R-FL) is pushing for a balanced budget, a daunting ask that would require Washington to erase a $1.9 trillion deficit.
“Where I am is, I want the budget to be balanced, then we don’t have to worry about the debt ceiling,” he said.
Lee named the REINS Act, a bill that mandates congressional approval for major regulations.
Other “wish list” items include barring legal immigrants from accessing entitlement benefits if they are in the country temporarily, according to one Senate aide, as well as the clawback of subsidies in the Inflation Reduction Act and CHIPS and Science Act.
“There are literally dozens of policies that I’m actively negotiating to get into reconciliation,” said Sen. Ted Cruz (R-TX), who called the auction of spectrum licenses, important to wireless and broadcast services, a “huge” priority.
Not all demands, if granted, can be accommodated through reconcilation, a budget process that allows Republicans to sidestep the filibuster. Scott noted that reining in the deficit would require changes to discretionary spending, a bucket of money reserved for the annual appropriations process.
Senate conservatives also have a different set of demands for the budget framework, which merely allows Congress to begin crafting the legislation, versus the final bill they will develop sometime over the summer.
Johnson says he will not vote for a final product that does not return federal spending to 2019 levels when adjusted for inflation and population growth.
“There’s no justification for spending a penny over $6.5 trillion, so until we come down to those spending levels, I’m not going to support an increase in the debt,” he said.
Scott was less rigid, telling the Washington Examiner he is “very open” to lifting the debt ceiling if Senate leadership lays out a path to eliminating the deficit. Lee expressed a similar view on the REINS Act.
“That may or may not be something we can get in reconciliation, but if not, we need a path to get there,” he said.
Republicans used their Tuesday lunch to begin airing out their demands on the debt ceiling, with the goal of approving the budget resolution the week of April 7. The House would then approve the framework the following week, before lawmakers depart for the Easter recess.
Sen. Steve Daines (R-MT), an adviser to Thune, said he expects the Senate resolution will ultimately mandate $2 trillion in spending cuts across 10 years, the same level in the House framework.
“I think it’s doable looking at the numbers,” he said. “There’s a lot of good work going on, and I’m confident we’re going to get there.”
Other members of Senate GOP leadership, however, said that figure is still in flux and would depend on rolling conservations with members.
“There’s still a lot of discussion, I’ll put it that way,” said Sen. Shelley Moore Capito (R-WV), the No. 4 Republican in Senate leadership. “I don’t see that we’ve settled on a specific number.”
Sen. Lindsey Graham (R-SC), who is leading the reconciliation process as Budget Committee chairman, endorsed Johnson’s debt panel demand, calling it a “pretty good idea,” while hedging on the top-line number Republicans might use.
“I’m more concerned about the process we use than the number. My goal is to cut as much as you can, making sure you don’t compromise vulnerable people,” he said.
Meanwhile, there is conversation about using a $5 trillion debt ceiling increase instead of the $4 trillion approved in the House. That proposed change is heightening concern among fiscal hawks but could be necessary to ensure there is not another battle until after the midterm elections.
For weeks, the House resolution has faced opposition from Senate Republicans who represent states with large Medicaid populations. The way the House framework was crafted almost guarantees the entitlement program would need to be rolled back.
Yet there are signs Republicans will be able to stomach, and are even embracing, a certain degree of reforms. Capito told the Washington Examiner she believes that individual states should have “more autonomy” to run the program, which could translate to substantial cost savings.
At the same time, even vocal Medicaid defenders are in favor of work requirements, a change that could yield around $100 billion across 10 years.
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“Work requirements I’ve said consistently are fine. I’m fine with that — that’s not a benefit cut,” Sen. Josh Hawley (R-MO) said. “But beyond work requirements, if it’s something that results in reductions in benefits to folks who depend on it and who are qualified and are working, I’m not going to vote for that.”
He warned that he will not support a House resolution that is “generic” on the question of Medicaid, signaling that he expects some sort of up-front commitments.
