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Rep. Kevin McCarthy (R-CA) finally clinched the House Speakership Saturday, but the repercussions will shape the next Congress.

Our Government Relations team weighs in on what the extended fight—and McCarthy’s concessions—mean for the rest of the congressional term:

  • Freedom Caucus—and Democrats?—empowered. A key win for voting holdouts was three Freedom Caucus members on the powerful Rules Committee, which comprises eight Republicans and four Democrats. Freedom Caucus members could create headaches for leadership in getting bills to the floor if they team up with Democrats to oppose rules they don’t like—though this GOP infighting may stay behind the scenes.
  • Expect a spending showdown. McCarthy agreed to bring a 10-year budget that caps spending at 2022 levels, which would cut defense spending by 10%. It will be nearly impossible for this bill to pass in the House. Many Republican defense hawks and defense appropriators will be opposed to it, and some have already voiced concerns.
  • McCarthy on a tightrope. The most significant Rules Committee concession allows just one member to introduce a privileged resolution to “vacate the leadership.” If enough Freedom Caucus members–as few as five–become disillusioned with McCarthy, they will probably want to unseat him. Moderate/mainstream conservative Republicans may also push back against McCarthy if they feel he is bending too much to Freedom Caucus members at their expense. But don’t expect them to use the same threats and tools as the Freedom Caucus.
  • The discord puts a premium on McCarthy’s ability to advance issues that unite the conference, most obviously Biden administration oversight and anti-China legislative efforts. Last week’s events have underscored how much McCarthy will need to foreground those issues with his conference’s near unanimous support. A Biden announcement on intent to seek re-election would supercharge the oversight efforts.
  • The environment that allowed for major successful bipartisan legislation last Congress no longer exists. Last term, centrist senators were able to broker Senate deals knowing the Biden White House would likely be able to help those deals pass the House. That’s no longer the case.  We may still see Senate “gangs” with some of the same players, but they will be cutting deals without expecting those deals to actually survive the House. As a result, these senators will have less incentive to take the political risks that bipartisan deal-making necessarily entails. For example, it’s hard to imagine Senator John Cornyn (R-TX) championing the bipartisan gun safety bill last year with a Republican House. At the same time, the two must pass items for this session – debt limit and funding the government—and perhaps the two most important things for the economy and voters—will REQUIRE bipartisan support.