What Will Republicans Do With Their House Majority?

of government. Kevin McCarthy won the speaker's gambill after fifteen balance that spans more than four days. In the process of winning over the votes, the California Republican made major concessions to the hard right lawmakers. They include allowing any one member to call a vote to oust the speaker. Just ations will take center stage in a Republican lead House.

Republicans already indicating their desired to look into the COVID origins, what's happening along the US Mexico border, issues with the President's family, and, as Kevin McCarthy said, also what happened in Afghanistan. Those Republicans now back in charge of the House of Representatives have a long list of things they say they want to get done. Tax and spending cuts, of course, and as you just heard, they're launching numerous

investigations of the Biden administration and the president himself. But the Senate is still in Democratic hands and Republicans spend a lot of times squabbling among themselves. Just look at how hard sum members fought to keep Kevin McCarthy from becoming House Speaker. So will this just be a year

of a lot of noise and not much else? My colleague Stephen Dennis spends his days putting those kinds of questions to the people in power in the US capital, And he's here with me now in our Washington studio, Stephen. This Congress certainly came in with a bang, and Republicans now are making all kinds of promises of what they'll do this year. It can be hard to separate the theater from what actually matters. And it was so much happening. How do you choose what to dig into and what

to ignore? Yeah, I mean, you know, the House is now controlled by Republicans. They want to be on offense against Joe Biden and the White House. They want to be on offense against the Senate. They have a lot of things they want to accomplish, but you know, one House proposals are the same as press releases. You don't actually make law that way. And so it's really not clear whether this House Republican conference is going to be

able to stay united. This is the most divided a new House majority has been in a hundred years against itself, against itself. They've got to figure out what bills they can all agree on to send over to the Senate, and then they've got to figure out a strategy for keeping the government lights on, keeping the government funded. And you know, as far as actual legislation, that might take

a bit of a backseat this year. You know, they'll pass a lot of bills, but I think seeing a headline that they passed a bill, I think a lot of our listeners, if they're in business, their investors, most of these bills are not going to become law. They're just ways to sort of rally the Republicans and say, hey, we want border security, Hey we want to defund the I R S. They already passed that bill. These things aren't going anywhere unless they get a deal with the

Democratic Senate and in the White House. Let's talk about the actual functioning of the House. One of the big things that happens when it switches parties is the party that just came into power gets to choose who leads all the committees. And that's a pretty important thing. One of the things that Kevin McCarthy kind of had to give away in order to get the votes to be Speaker is some of these committee chairmanships. Can you describe who's running what and what it means for the priorities

that the Republican House is going to put forward. Yeah, so you have like the money committees, people like Kke Ranger of Texas. She's a long time appropriator. She's gonna be handling the appropriations bills this Congress. She's deciding where the money go, where the money goes. You know, if you're a defense contractor, you go through her. If you have any spending contract through Congress has to go through the Appropriations Committee. She's a long time appropriator, She's done

a lot of bipartisan bills in the past. She's going to be trying to come up with a big bipartisan appropriations bill that would spend less money than last year. Is their goal. But that's a really hard to do, and corralling that is going to be difficult. One advantage she has this year is the Republicans are agreeing to do ear market people what earmarks are, because it's been a while. Yeah, so airmarks are basically every member of Congress can sort of request a couple million for a

project here or there. You know, maybe it's a bike path, maybe it's an interchange, maybe it's some local club that needs money for a gymnasium. They used to call it pork barrel spending exactly, And so you know, this is less than one percent of the budget, typically maybe two and it's a way to get votes because people tend to want to take credit for this stuff, and it's hard to do if you vote no. And you know, if you think about your typical House member, they have

very little to show for their time here. Very few House members get their own bills made into law. Most of the time, the big bills are discussed behind closed doors by the leadership. This is the one thing they can go home and point to something and say this is here. Because I was in Congress and Republicans used to say, well, we don't want this because it leads to all kinds of unnecessary spending. We hear about these Christmas tree bills where they pile on all this stuff.

But now that the Republicans are in charge, suddenly well maybe it's not so terrible thing. Yeah. I mean about twenty years ago, when the Republicans were in charge for a long period of time, they used ear marks as sort of a favor factory, to the point where there were thousands and thousands of earmarks every year and people were under FBI investigation. Some people went to jail over corruption. With ear marks this there wasn't a lot of oversight.

It was hard to tell who even requested them. There is more oversight this time around. There is more transparency on who's requesting them. But there is still a huge incentive to reward your campaign contributors, to reward people who have done favors for you back home. And so some people will look at that and say it's corruption, and other people would look at that and say, well, this

is how politics has done and this is representation. You know, maybe your district never gets a grant funded by you know, some government agency, and you can insist I need this water project, and I know my district better than somebody else. Even with that ability to load up these bills with favors that get votes, do you think it's likely that that word by partisan is going to prevail and we're actually gonna have a spending bill that both parties can

agree to. It's basically happened every year since the beginning of the Republic, with a very few exceptions. One would think that at some point there might be an agreement. I do think that going to a national park on October one is probably a bad idea for a plan. That's the start of the fiscal year. There's a decent

chance we have a government shutdown. Then there's so many issues that the two sides disagree on, not just spending levels, but planned parenthood funding, border security, immigration, I r S funding is a big fight this year. There's so many things that they haven't even started negotiating yet, and I think it's gonna be very hard for Kevin McCarthy to

cut deals. He doesn't have margin to play with. You know, he was basically being held up by the party's conservatives who got seats on the key committees, and they got some control over the direction of some of these bills. Coming out of the House. Keep in mind there are a number of more moderate members, and if he loses five of them on a rules vote, they can't bring these bills to the floor. So it's not clear yet

how united they're going to be, whether the moderates. If there's a debt limit crisis and some of these other funding issues coming up, you know, will there be a gang of five or ten or fifteen or twenty who will insist on funding the government and not having a shutdown, who insist on not having a debt limit crisis, etcetera. Because it only takes five, you know, they have, it's such a tiny majority that I think it's just going to be very hard for them to stick together for

month after month after month. As you say, those arguments over government spending will go on for most of the year. But right in front of the Congress and White House now is a fight over raising the debt ceiling. The government has already hit the debt limit. Treasury Secretary Janet Yellen says she can move money around here and there to keep the checks flowing until around June, and if Congress doesn't raise the debt ceiling to allow more borrowing, the us will the fault in his debt and reek

havoc all over the world. Democrats want to raise it, Republicans want to use it as a way to four spending cuts. How does this all play out when you talk about the debt limit? The debt limit is something where it's very hard for McCarthy to cut any deal and keep his speakership. This was a problem for his predecessors, it's a problem for him. And you know, right now you have the Democrats insisting unknown negotiations. Joe Biden is saying I'm not going to give you anything. Senate Democrats

saying similar. I mean, I don't know if they will be able to maintain that stance. Month after month after month, Barack Obama gave in two demands for two trillion dollars in spending cuts from the Republican. From the Republicans, they insisted on getting dollar for dollar to spending cuts for debt limiting crease. So you want a two trillion dollar debt limit decrease, give me a two trillion dollar spending cut. And so he agreed, in part, I think because he

faced re election the next year. So we still, you know, we're waiting for Biden to jump in and say I'm definitely running. I do think that the Republicans have some leverage going into the presidential election year because when the debt limit crisis happened in even Obama's approval ratings tanked. The stock market tanked, you know, ultimately recovered, but even though House Republicans approval writings also went down, it was bad for all of Washington, and Obama ultimately cut the deal.

We did not go over the cliff. We did not have an economic catastrophe, but we did have a debt downgrade. Consumer confidence took a deep fall, and Democrats will want to try to avoid that, and there are potential ways out that don't involve the House. Stephen, please stick around. We'll keep talking after the break. Defaulting on the national debt should be regarded as unthinkable. Failing to increase the

debt limit would have absolutely catastrophic economic consequences. That's Treasury Secretary Janet Yelling sounding the alarm on what will happen if Congress doesn't act. Stephen, if this all feels like deja vu to our listeners, it's because this has happened before more than once. Why do we keep having this fight again and again. Basically, the debt limit is something that came into effect originally about a hundred years ago during World War One, to actually make it easier to

have more debt. Before the debt limit that came about in World War One, Congress had to approve every debt issuance. You know, it's like you have a new bond. Well, Congress has to pass a bill. And then they said, you know, that's too much trouble during a war. Let's give Treasury the authority to borrow up to a certain amount.

Make it easier to borrow, not harder. And then decades passed and it kind of kept getting raised without much of an issue until eisen Yeah, until Eisenhower wants to build the highway system and borrow a lot of money. And there was a fight in Congress over the debt limit, and it was used for the first time as sort of like a political weapon. And back then Eisenhower had

to do a workaround to keep the government funded. And they basically looked in the cushions of their couch and they found some unencumbered gold and they sent a little sheet of paper called the gold Certificate to the Federal Reserve and the Federal Reserve gave some money, and they kept the girl been running for a few months until

they cut the deal. In the more recent times, the debt limit has become a political cudgel, mostly used by Republicans to try to extract spending cuts and other concessions

out of Democrats when Democrats have the White House. And then, most notably in tleven, we came very close to a debt limit catastrophe about August of and ultimately Barack Obama cut this two trillion dollar spending cut deal in return for two trillion dollars in debt and remind people why it's such a big deal that we hit this debt ceiling in if we don't do something about it. Yeah, So, like, in the best case scenario, we have about a more

than a trillion a year in deficits. That means basically we're borrowing a hundred billion a month on average, and and that's a big chunk of the economy. So say you sided, okay, well we're gonna instantly balance the budget. That would mean you'd have a hundred billion dollars coming out of the economy every month bills that were not paying whether it be to doctors in Medicare or social Security checks that are delayed or not going out. We're

all sorts of other things the government pays for. And like the best case scenario where you do what the House has been talking about, which is some kind of debt prioritization, where we still pay the debt coupon to the bond holders, but we're not paying maybe the Medicare doctors or the veterans benefits or something else. Even in that scenario, the economy would take a huge hit because there will be a hundred billion dollars in less checks

going into people's pockets. The worst case scenarios, you actually don't pay the debt coupon, and suddenly investors all around the world might say, well, maybe we shouldn't be putting our money in federal treasuries and the US default and its debt, which has never had the US actually defaults for any period of time, Then suddenly you can't base your global accoun on me on the US dollar and

the federal treasuries and the rest. And it's potentially has a spiral cascading effect that you know, people like Janet yell And say could lead to a worldwide depression and or recession, and we want to avoid that. Both Republican and Democratic leaders agree. And yet you know, Kevin McCarthy says, look, we have thirty one trillion dollars in debt. We're racking up another trillion a year. We should take this moment to have an agreement to shrink it and bounce the budget.

You know, that argument the actual cost savings to do that. So on the one hand, you have this political argument that everyone would shake their head and say, yeah, that sounds good, But then it comes down to, Okay, where's that money coming from exactly? And I think one of the big challenges that McCarthy is going to have. You know,

they're supposed to pass a budget in the House. Many years we just decide not to pass a budget, and this budget resolution, you're supposed to say roughly where the money's coming from if you're going to balance the budget. You know, usually what they do is they put a bunch of magic asterisks this budget to claim that they

got to a balanced budget without raising taxes. It's just going to be a very fascinating thing if he can actually get two hundred eighteen out of two two to vote for this thing, which they have not yet written, will be challenging to do. Now, we've both been around long enough to have seen how many of these debt ceiling fights, and in the end the story is always people met behind closed doors and they struck a deal,

and yeah, we're all saved. Um, is there any reason to think that in the end this is going to be any different. I think that this is likely to be like a lot of other ones. One reason why you might have optimism that there's going to be a deal is you already have a number of individual House Republicans say that they don't want to have a debt limit crisis. Brian Fitzpatrick of Pennsylvania, Patrick McHenry of North Carolina, who has the Financial Services Committee, wants to avoid a

debt bit default. And it only really takes four or five of them to agree with the Twitter and thirteen Democrats to cut a deal. And so I do think that there will be pressure on McCarthy to cut a deal that gives him at least a fig leaf that he can go and take to, you know, the Conservatives and say, look, we only have the House, we don't have the set up, we don't have the White House, this is the best deal I can cut. If you want to try and replace me with another Speaker, good luck,

But you're not gonna get a better deal. Well, all that is going on, Republicans have also said they're going to use their new power to launch any number of investigations of Joe Biden and his administration. One of the deals McCarthy had to strike to become speaker was putting Trump loyalists on important committees. What effect is that going to have. I think it's going to make these committees sort of hyperpartisan. They can go out after the functioning

of government. You know, there's the post Office delivering your mail properly, but they can also dig in on these investigations and have a very broad remit and so whether Joe Biden had a conflict of interest with his son Hunter Biden taking money from overseas interests, or whether it's you know, the handling of the Department of Homeland Security.

Basically they can dig into almost anything. Now I think it's possible that the White House might actually want some of these red meat throwers on this committee to make Republicans look more extreme. And some of these hearings Marjorie Taylor Green was kicked off committees a couple of years ago. She's back on committees. One of the committees she's going to be honest, the Oversight and Reform Committee. Same thing

with Paul Gossar of Arizona. Both of them had appeared at events with Nick Fuentes, who is a white nationalist and Holocaust denier, who was an attendee on January six, for example. You know, they've had a lot of controversial statements that have basically fueled Democrats as well. Lauren Bobert, also a controversial Republican, is going to be on that committee as well. Scott Perry of Pennsylvania, who is the head of the Freedom Caucus, is going to be on

that committee. He was one of the Republicans behind the scenes pushing very hard to find a way to keep Trump in power after the election. Before January six, his

cell phone was seized by the Department of Justice. There's gonna be a lot of sort of interesting situations where folks who some of the Democrats blame for January six, for fomenting efforts to overturn the election, now having some power in the House to go after the folks who were investigating you know, I think they're trying to dent

Joe Biden's approval ratings heading into next year's election. I think there's also, you know, an effort by Jim Jordan's the House Judiciary Chairman, who has been itching at the bit to sort of go after the Apartment of Justice, uh, go after its investigations when Trump was president, for investigations of Trump, you know, everything from the rate at mar Lago to how it's handling the investigations of you know, the classified documents that might be multiple committees looking at that.

They're also going to be looking at things that are sort of hobby horses on the right, origins of COVID in China, the handling of COVID by Anthony Fauci. There's going to be also investigations into Order security, and there are some Republicans who actually want to impeach the Home and Security Secretary may Orcas. That could be a bit of a circus, and ultimately it's not inconceivable that the House ends up impeaching the president. Should that person stay

in their job. Why raised the issue they shouldn't. So the thing that we can do is we can investigate and in that investigation could lead to an impeachment inquiry. That's Kevin McCarthy there. I think right now, Kevin McCarthy doesn't seem to want to go down that road. But you know, Nancy Pelosi didn't want to impeach Trump every day until she decided that she had to. So I think there are some Republicans who are looking for turnabout his fair play. And you guys went after Trump for

seven years of investigations. It's time somebody went after Biden and looked at his family and their financial dealings. And I think that they want to air them out in public on prime time TV if they can. And I think that some of them look at the January six Select Committee and think it was damaging and they think they can do some similar kinds of things as well. Our conversation continues after the break. So there we have the House some of their big priorities. You mentioned that

the House is on offense. We're certainly talking about how that is. You said the Senate will be on defense. So switching over to the other side of the Capitol, what does that mean? Yeah, So, I mean the Senate is in the personnel business, so they're going to be confirming judges and confirming ambassadorships. The legislative agenda might be a little thinner this year than previous years. It's not to say they won't be trying things, but I think that they're mostly focused on how do we get the

House to agree to increase the debt limit? How do we get the House to agree to not shut the government down. And I guess another thing too, is just the Senate saying no, no, no, to one after another of the Republican past House bills that won't ever go

anywhere in the Senate right. I think one of the big questions in the Senate is at what point does Mitch McConnell engage on the debt limit and on resolving some of these questions in when there were these key deadlines and John Baynard, Coast Speaker at the time, was having difficulty corralling his own folks in many of these cases, McConnell was hutting deals with then Vice President Joe Biden in back rooms to keep the government open, to avoid

tax increases, to avoid a debt limit default. I could see that happening again if we're here in June and the debt limit is breached because the extraordinary measures that they traditionally buy them three or four months run out. And that's the moment where you can see the Senate say, look, the House can't figure this out with the White House. Let's try and pass something and hope the House can take it. There are also what I would call sort of like some hail Mary kinds of issues that you

could see happening that folks would care about. One is immigration. You know, it's a big priorities border security for the House. It's unlikely the Senate is gonna like say, okay, let's do a big border security package without doing immigration, without doing something about the dreamer kids who have been here for many years and are sort of still stuck in limbo. Carson Cinema of eras on a Democrat turned independent recently. Key corraller of bipartisan deals last year on a whole

host of issues, including immigration and marriage equality. You know, and John Cornyn, who's a senior Senate Republican, took a bipartisan group of senators to the border. They're trying to craft a bipartisan package that would include changes to how we do immigration, included more resources for border security, It's interesting in that this is a group of senators that

has been pretty successful in actually crafting legislation. But as we all know, you know, immigration is one of those things where we're like zero for thirty thirty straight years. People try to do a bill and nothing happens, or very small things happened, and uh, you know, but there's not a whole lot of other things where you can

see something happening. One of the other things to watch is Joe Mansion was not able to pass his energy permitting fast track plan for pipelines and and energy projects. This is the Democrat from West Virginia held up Biden's agenda for all those months. I remember standing in line in nineteen seventy four to buy gasoline to go to work. I Am not going to stand in line and wait

for a battery to come from China. Part of his deal to get a climate package last year was the administration Democrats agreed to back his plan to accelerate a key pipeline in West Virginia a bunch of other projects. He is still going to be trying to revive that this year. And you've got House Republicans who could be staring at a at a long list of promises and hope for accomplishments without actually getting a lot of them

across the finish line. When you look at the Congress a year from now, after Republicans have been in charge of the House, when you're closer to a presidential election, what do you think actually will get done? If anything, I think the most likely scenario is that they kick the can, you know, with some small modest attachments to that can kick, you know. And Joe Biden, I think having Democrats do better than expected in the mid terms.

He's not like he's really sounding like Bill Clinton after they got shellacked in and he pivoted hard to the middle and he cut a big giant welfare reform deal. If people remember, with the House Republicans, it's possible that Biden can cut some deals with McConnell. They've worked together very well. It's possible that Kevin McCarthy can find a few things that navigate among the partisan investigations and the spending fights. I think there's a chance that they can

do that on the margins. Stephen Dennis, thanks for talking with me today. It's great to be here. You can read more from Stephen Dennis at Bloomberg dot com. Thanks for listening to us here at The Big Take, the daily podcast from Bloomberg and I Heart Radio. For more shows from my heart Radio, visit the heart Radio app, Apple Podcasts, or wherever you listen. Read Today's story and subscribe to our daily newsletter at Bloomberg dot com slash

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