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Here’s how the House GOP majority will try to curb federal spending and taxes

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By Tami Luhby, CNN

In adopting their rules package Monday, the new House Republican majority has made it clear that they want to rein in federal government spending and keep a lid on taxes.

The package, which governs how the chamber will operate for the next two years, lays out several measures aimed at making it harder to hike spending and to increase taxes to pay for it. Some of the provisions have been in effect previously when the GOP has controlled the House.

The measures, several of which raised concerns even among cost-conscious Republican lawmakers, are sure to lead to battles later this year with the Democratic-led Senate and President Joe Biden that could have severe consequences for the nation.

If the two parties can’t work out an agreement to fund the government for fiscal year 2024, which starts October 1, it could result in a shutdown. And if a war over spending cuts prevents Congress from raising the $31 trillion debt limit this summer or fall, it would risk a default on US debt that would roil the national and global economies.

“I’m worried about the types of fiscal goals that they’re setting, that they’re not going to be achievable, and they’re setting themselves up for failure,” said Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget. “I’m also worried that instead of both parties negotiating in good faith, we’ll be stuck in one of these dangerous standoffs.”

What’s in the package

The package swaps the pay-as-you-go rule for a cut-as-you-go requirement, as existed the last time the GOP ran the House.

The former mandates that any new spending or tax cuts have to be paid for by spending cuts or tax increases elsewhere. But the latter requires only new spending be paid for, making it easier to cut taxes, said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

Another provision would restore the requirement that tax rate increases be approved by a 60% supermajority vote, making such efforts harder to pass and limiting lawmakers’ options to reduce the deficit or raise spending.

Plus, the package makes it harder for House members to game the system by proposing legislation that would not raise spending in the first decade, the typical time frame Congress considers, but would in subsequent years. It does so by establishing a point of order, or an objection, against consideration of such a bill.

The side deals

What may prompt even more chaos on Capitol Hill are the side deals that House Speaker Kevin McCarthy made with conservative members of his party last week to secure their support for his leadership. The details of those agreements have yet to be made public, which has annoyed more than a few GOP lawmakers.

McCarthy signed off on a pledge that the Republican-led House would pair any debt ceiling increase to spending cuts, which would add even more complexity to what’s expected to be difficult negotiations within the GOP and between the two parties.

What’s more, McCarthy agreed to approve a fiscal year 2024 budget capping discretionary spending at fiscal year 2022 levels. That would require cutting all domestic discretionary spending by roughly 25% in inflation-adjusted dollars if defense funding is protected, Akabas said.

Just how wed to these measures conservative Republicans are will determine the depth of the dysfunction in Congress this year. McCarthy’s slim majority in the House means he needs the support of nearly everyone in the party to pass any legislation.

“It has yet to be seen whether these are immovable policy positions or policy preferences that are the starting point for negotiations,” Akabas said.

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