What to Know in Washington: GOP’s Debt Limit, Spending Cut Plans

December 24, 2024, 12:06 PM UTC

House Republicans’ latest strategy to raise the debt limit next year while cutting trillions in spending is a risky one, requiring buy-in from conservatives who strongly oppose an increase in borrowing. But first you should know:

  • Crypto lobbyists scored some major wins this year, but others on K Street weren’t so lucky. We have the winners and losers list.
  • A national security panel has deadlocked on the sale of US Steel, leaving the final decision to President Joe Biden.
  • RFK Jr.'s anti-vaccine sentiments may prompt workers to push back against their employers’ vaccine requirements.

Republicans Plan to Tie Debt Limit to Trillions in Spending Cuts

Speaker Mike Johnson will try next year to increase the government’s authority to borrow money while committing to cutting trillions of dollars in spending over the next decade. Democrats say they’ll use the fight over the debt limit to try to slow down the Republican tax agenda.

The debt limit, which is set to kick in Jan. 1, became a stumbling block to the bipartisan agreement last week on a short-term spending package to keep the government open. President-elect Donald Trump initially urged lawmakers to repeal or otherwise postpone the statutory limit on how much the government can borrow before he takes office.

House Republican leaders told members they plan to raise the debt limit by $1.5 trillion and cut $2.5 trillion in spending in a filibuster-proof bill they would pass through the budget reconciliation process, Rep. Tom Tiffany (R-Wis.) said members were told last week. GOP leadership did not outline what spending they would target. The $2.5 trillion in cuts couldn’t come from Social Security under reconciliation rules, and Rep. Tim Burchett (R-Tenn.) said Medicare would also be off the table.

The newest plan is risky. It would require a nearly unanimous GOP vote to increase borrowing, something conservatives strongly oppose, but Tiffany said tying it to $2.5 trillion in spending cuts over a decade could be both palatable and realistic.

  • “It’s $250 billion a year. So it isn’t that much money in Washington-speak,” Tiffany said.

Democrats who constantly decried Republicans for using the debt ceiling as a leveraging tool in the past changed their tune after Trump’s insistence on an extension.

  • “They made it a bargaining tactic. And so, you know, I think it shouldn’t be used as a bargaining tactic, but they made it so. So we’re not walking away from that,” Rep. Pramila Jayapal (D-Wash.) said. Read More

Programming Note

This newsletter will not publish on Dec. 25, due to the holiday. We’ll resume our normal publication schedule on Thursday, Dec. 26.

Editor’s Picks

Biden to Decide on US Steel Acquisition After Panel Deadlocks

A US national security panel has deadlocked on its review of the sale of United States Steel Corp. to Nippon Steel Corp., a procedural development that opens the door for President Joe Biden to block the transaction.

Where Newest Republican Senators Land on Committee Assignments

Republican senators joining the next Congress secured seats on key committees overseeing banking, foreign relations, and armed services, Majority Leader John Thune (R-S.D.) announced Friday night.

Caregiver Tax Credit Could Pass in 2025 With Trump, GOP Support

Advocates for the elderly and people with disabilities are hopeful that, after eight years, Congress may finally pass bipartisan legislation to provide a tax credit for family caregivers in 2025.

RFK Jr.'s Bully Pulpit Provides Path to Crimp Job Vax Mandates

Health-care companies and other employers that encourage or require their workers to get vaccinated will likely face headwinds if anti-vaccine activist Robert F. Kennedy Jr. wins Senate approval to lead the US Department of Health and Human Services, health law scholars said.

Gaetz Paid for Sex, Used Drugs While in Congress, Panel Finds

House investigators found “substantial evidence” former Representative Matt Gaetz paid several women — including a 17-year-old girl — for sex and bought and used illegal drugs while in Congress, according to a bipartisan committee report released Monday.

DC Stadium Deal Tops 2024 Lobbying Wins as Boeing Suffers

One of the Washington Commanders’ key victories this year may have come from the Senate, through a bill that also marked a big win for lobbyists.

Congress passed a late-night measure for the NFL team to potentially return to the nation’s capital. But not before the measure looked doomed after lawmakers stripped it from a year-end funding deal.

Other big legislative fights this year pit lobbying behemoths like pharmaceuticals and banks against competing sectors and injected millions of dollars into K Street.

Some of the biggest wins include:

  • The cryptocurrency industry made bipartisan strides this Congress and is well-positioned for next year.
  • Google and Meta stalled the Kids Online Safety Act.
  • Pharmacy benefit managers narrowly avoided a brutal legislative loss after changes to the industry were initially included in the year.

Lobbyists who were less fortunate include:

  • Boeing‘s lobbying operation has been through a rough year, starting in January when a door plug blew out on an Alaska Airlines flight.
  • TikTok lost a big and swift lobbying fight in April when lawmakers hustled over the finish line a divest-or-ban measure.
  • Transgender rights advocacy groups, including the Human Rights Campaign, lost a fight over a measure included in this year’s defense authorization that prohibits the military’s health-care program from providing gender treatment to transgender minors.

Kate Ackley breaks down this year’s biggest lobbying winners and losers. Read More

What Else We’re Reading

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Bill Clinton entered a Washington hospital on Monday after developing a fever, according to an aide for the former president.

Alaska Claims Biden to Auction Arctic Refuge Land Already Leased

An Alaska state corporation is challenging the Biden administration’s decision to lease the Arctic National Wildlife Refuge for oil and gas in part because it’s planning to auction land that the state previously leased.

California Vehicle Waivers ‘Legally Solid’ as Trump Eyes Repeal

The EPA’s decision to focus its recent approval of California vehicle emissions regulations on traditional air pollutants instead of greenhouse gases could complicate any moves by an incoming Trump administration to undo the action, legal scholars say.

NY Congestion Pricing Plan Survives Challenges as More Loom

New York’s controversial congestion pricing project cleared a pair of hurdles as two federal judges declined to put the traffic plan on hold just weeks before it is scheduled to begin.

Biden Appoints Former Jacksonville Mayor as New NTSB Vice Chair

President Joe Biden has appointed Alvin Brown, a member of the National Transportation Safety Board and former mayor of Jacksonville, Florida, as vice chair of the independent agency, according to a statement emailed Monday.

San Francisco’s Fentanyl Deportations Show Rare Unity With Trump

Liberal San Francisco is eyeing at least one patch of common ground with President-elect Donald Trump.

Abandoned Mine Cleanup Benefits from Unusual Lobbying Coalition

The law establishes a pilot program for the next seven years enabling “good Samaritan” groups, including nonprofits and state agencies, to clean up contamination and other hazards at abandoned mine sites.

Plastics Production Debate Awaits Trump Arrival on Global Stage

Plastics account for at least 85% of marine litter, according to a reportfrom the UN Environment Programme, which has led global talks aimed at reducing plastic pollution.

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Mizelles Must Navigate Ethics of Dual Trump Appointed Roles

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Trump FCC Pick Writes Bob Iger on ‘Erosion in Public Trust’: CNN

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Can Trump Buy Greenland? What to Know Besides ‘No’: QuickTake

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To contact the reporters on this story: Jeannie Baumann in Washington at jbaumann@bloombergindustry.com; Herb Jackson in Washington at hjackson@bloombergindustry.com

To contact the editor responsible for this story: Kayla Sharpe at ksharpe@bloombergindustry.com

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