Lawmakers worry about default as debt ceiling deadline creeps closer
Fox News' Chad Pergram has the latest on the tough congressional fight on 'Special Report.'
House Republicans appear to be on the verge of losing a historic opportunity to cut federal spending and appear to be caving to the Biden administration, according to Russ Vought, former President Trump’s director of the Office of Management and Budget.
"I’m absolutely amazed at how bad the parameters of the deal are that are emerging," Vought said on CSPAN Friday morning. "It’s basically almost worse than a clean debt limit."
Vought spoke after details of the ongoing debt ceiling agreement emerged late Thursday night that indicated a deal is emerging that strays far from the Limit, Save and Grow Act that the House passed weeks ago.
Russ Vought, director of the White House Office of Management and Budget in the Trump administration, ripped the details of an emerging debt ceiling deal on Friday. Photographer: Al Drago/Bloomberg via Getty Images
The House bill cut about $150 billion in discretionary spending and capped growth in federal spending to 1% a year for a decade. But details that emerged Thursday on the agreement – which is not final – indicated negotiators are now looking at just two years of spending caps, higher spending for defense and veterans, and a freeze on other programs.
"They’re going to come nowhere near the types of savings they had in the House," Vought said.
Vought said Republicans had leverage over President Biden by passing a bill to raise the debt ceiling in return for sharp spending cuts, while the Senate lacks the votes to pass anything. But he said if the emerging details provide a rough sense of where negotiators are, the GOP has squandered that leverage.
"I’m actually amazed at how incompetent they have been," Vought said of Republicans.
"They have never been in a stronger place," he said. "They have passed a bill that this town and the country did not think was possible, they kept their team together, they have 75-25 polling to their backs, they had the Democrats in a situation where they had said you did not negotiate for months, and yet up against a deadline that’s not a real deadline… they just completely caved."
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Vought said Republican negotiators, led by House Speaker Kevin McCarthy, R-Calif., had real leverage over the White House but may be squandering it. (AP Photo/J. Scott Applewhite)
Vought said he believes Republicans are buying too much into the Democrats’ arguments that the U.S. government is on the verge of a "default" if the debt ceiling is not raised by next week. But he said "default" is the failure to pay interest and principle on the debt, and said there is no risk of this happening because the government has enough funding to make these payments.
"I think there has been an unwillingness on the negotiations on the House side’s part to understand that the crisis in some respects is manufactured," he said. "And so, if you buy into the notion of default, that it’s actual default – and it’s not. Default is not paying the treasuries’ principle and interest, that was never a consideration."
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President Biden continues to resist spending cuts as part of a debt ceiling deal. ((Photo by Win McNamee/Getty Images))
"They bought into that, and as a result, they felt that they need a deal... in the next week. And as a result, they got deal happy," he said.
"But they are still deal happy, and until they stop being deal happy, they are going to continue to have a very bad bill," Vought added.
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Reports late Thursday said that while Republicans were seeking to repeal all $80 billion the last Congress gave the IRS over the next decade, negotiators are discussing peeling back just $10 billion.
"They don’t even get rid of the IRS expansion," Vought said.
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