Washington Update

Inside (the Beltway) Scoop

By: Ellen Kuo
Thursday, January 26, 2023
Committee Assignments Are Made as Debt Ceiling Battle Looms

On Martin Luther King Day, House Appropriations Chair Kay Granger (R-TX) officially announced the chairs of the 12 subcommittees for the 118th Congress. Heading up Labor, Health and Human Services, Education is Rep. Robert Aderholt (R-AL) and Rep. Hal Rogers (R-KY) for Commerce, Justice, Science. Agriculture, Rural Development, Food, and Drug Administration will be led by Rep. Andy Harris (R-MD), Energy and Water Development by Rep. Chuck Fleischmann (R-TN), and Military Construction and Veterans Affairs by Rep. John Carter (R-TX).

According to House Speaker Kevin McCarthy and House Minority Leader Hakeem Jefferies, an agreement on the ratios between Republicans and Democrats on the various committees will also be completed before the end of this month. For a top committee assignment such as Appropriations, it grows by one more seat for each party resulting in 34 Republicans and 27 Democrats.

Given the concessions McCarthy made to conservatives to obtain his position, the annual funding bills are expected to be difficult to complete by the September 30 deadline. Advocates are already bracing for continuing resolutions (CRs)—even a possible yearlong CR. Congress will also need to tackle the impending ability of the U.S. government to actually pay its current bills, such as interest on Treasury bonds, Social Security and Medicare, and military salaries. Last week, Treasury Secretary Janet Yellen informed Congress that the government would reach the debt ceiling of $31.381 trillion on January 19.

Some in Congress are using this impending fiscal issue as a negotiating tool to cut spending before providing their votes to raise the debt ceiling. Meanwhile, the administration is refusing to negotiate on something as important as the ability for the government to pay its current legal obligations. This refusal is unlikely to withstand the pressure to avoid a default. Democrats say Republicans should focus their budget goals on future spending, not on refusing to raise the debt limit.

There is limited time to resolve the issue, even as the U.S. Treasury takes temporary steps to provide more time to prevent the country from defaulting on its obligations, which is anticipated in the third quarter. This issue will be the overriding one for this Congress, and a default will have an immense impact on the U.S. as being a risk-free financial partner globally.