Fiscal battles loom for new House Republican leaders

WASHINGTON Thu Jun 19, 2014 8:28pm EDT

Newly elected House Majority Leader Kevin McCarthy (R-CA) smiles as he steps up to speak to the media after House Republican leadership elections in the Longworth House Office Building on Capitol Hill in Washington June 19, 2014. REUTERS/Jim Bourg

Newly elected House Majority Leader Kevin McCarthy (R-CA) smiles as he steps up to speak to the media after House Republican leadership elections in the Longworth House Office Building on Capitol Hill in Washington June 19, 2014.

Credit: Reuters/Jim Bourg

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WASHINGTON (Reuters) - The Congress faces more big fights over funding for highway construction and government agencies in the coming months as newly elected Republican leaders in the House of Representatives work to soothe the concerns of the party's right flank.

Representatives Kevin McCarthy, elected majority leader, and Steve Scalise, elected majority whip, will be under pressure to make good on promises to give rank-and-file Republicans more say over legislation they bring to the floor for votes.

That is likely to mean a tougher negotiating line with Senate Democrats over spending issues, and bills that are more in line with conservative principles.

"It opens the door for another fiscal standoff," said Chris Krueger, a former Republican House staffer now with Guggenheim Securities in Washington. "Ronald Reagan could be the whip and you're still going to have a hard time passing bills this summer."

Conservatives have vented frustration with what they say has been a tendency by House Speaker John Boehner and outgoing Majority Leader Eric Cantor to craft legislation behind closed doors.

They have also been angered by instances when leadership has brought bills to the floor without the support of a majority of Republicans and passed them largely with Democratic votes. A measure to provide relief for victims of Superstorm Sandy and a deal to end a government shutdown last October were two such instances.

Boehner has struggled to tamp down rebellions from Tea Party conservatives, whose demands for smaller government have led to fights over shutdowns and potential debt defaults.

Tea Party lawmakers will keep up the pressure on Boehner. Some said the election of Scalise, a conservative from Louisiana, would not be enough to meet their demands for greater representation in leadership.

With the risk of possible challenges to leadership in a fresh vote after the November elections, Boehner, McCarthy and Scalise will have to work hard to keep their conservative wing satisfied if they want to remain in their jobs.

The new leadership team immediately faces a series of upcoming legislative deadlines, including replenishment of the Highway Trust Fund, which will run out of money for new highway construction projects by late August.

House Republicans have ruled out an increase in federal fuel taxes but have failed to agree on other ways to find the $19 billion needed to pay for highway projects over the next year. Proposals have included savings from ending Saturday U.S. mail deliveries and revenue gained by allowing companies to repatriate profits at a lower tax rate.

Democrats have proposed closing some corporate tax breaks to raise highway funds, a move that has been resisted by both moderate and conservative Republicans. If a deal cannot be reached, delays for new projects could start by August and all federal highway funding could stop by Sept. 30

Congress also must resolve disputes over annual spending bills needed to keep government agencies open past the Sept. 30 fiscal year-end. Republican House-passed versions of some of these measures contain significant cuts to transportation grants and housing subsidies, which Senate Democrats want to reverse.

A further tilt to the right would be "palpable" next year if Republicans win control of the Senate and increase their House majority, said Representative John Fleming, a Louisiana conservative. Another extension of the federal debt limit that is needed by March 31, 2015, would require cuts to benefit programs such as Medicare and Social Security, he said.

"We're going to be sending the president legislation and putting it on his desk for signature that has the kind of reforms the American people demand," Fleming said.

Immigration reform legislation is all but dead in the House. Tea Party candidate David Brat defeated Cantor, in part by attacking him for his openness to legal status for some children brought to the United States illegally by their parents. Brat's upset victory is likely to further spook Republicans who might be inclined to support immigration reform.

Representative Chris Van Hollen, the top Democrat on the House Budget Committee, said he believed the Republican leadership reshuffle would add up to less compromise.

"I fear that the situation in the House has grown even more difficult because the signal that was sent to the House Republican caucus by Congressman Eric Cantor’s defeat was, ‘Don’t even whisper about compromise on these big national issues,'" Van Hollen said.

(Additional reporting by Emily Stephenson and Susan Cornwell; Editing by Caren Bohan and Ken Wills)

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Comments (3)
REnninga wrote:
Translation: Here comes another government shutdown, and another precipitous drop in the stocks market in response.

Congressional Republican policies or repetitive budget crises “shock & awe” is certainly making it difficult for Americans to manage our retirement savings and investments.

I do hope that at least a few of them will eventually tire of behaving like children, and learn to behave like grownups.

Yes, so I’m a dreamer. Sue me. LOL.

Jun 19, 2014 10:16pm EDT  --  Report as abuse
REnninga wrote:
As an aside, I have to admit that it IS tremendously enjoyable to watch this Tea Party insurgency within the Republican caucus in Congress, and watching the last few “semi-moderate” (aka: almost rational) Republican members scurry like rats to move as far right as they can in order to avoid attack from their own. It looks like a feeding frenzy in a school of sharks, turning into an orgy of cannibalism. Very enjoyable to watch, indeed!

It’s like some perverse, whack-a-doodle game of musical chairs. Every time the music stops everyone gets up and moves one chair to the right. The problem is, the further to the right this goofball cabal scurries, the further they move away from being palatable to anything but the extreme right-wing base. Whereas the moderate center is the fastest-growing socio-political segment of the electorate in our society.

Here’s a clue, Congressional Republicans: Registered Independents now outnumber either registered Republicans or Democrats. And you won’t get reelected if your extremism scares the bejeebers out of mainstream American voters. So by all means, just keep doing what you are doing.

Jun 19, 2014 10:38pm EDT  --  Report as abuse
Bakhtin wrote:
I agree with you… watching the GOP does have the same appeal as watching Kardashians or the early rounds of Idol. It is funny to watch.

The problem is that the GOP are also dangerous. Look at what happened the last time they were in power: they kicked off two wars, killed thousands of Americans, and hundreds of thousands civilains, That is not so funny. They then put a cherry on top by wrecking the both the US and the global economy, which is also not funny.

I do enjoy the never-ending clown show the GOP provides, but it is tempered by serious concern. They are a minority, but they are also activists and activist minorities can win elections which is precisely why the US has supported dictators in the past – to stop activist communists from taking control of democracies.

Imagine the GOP, who have learned nothing from the experience of wrecking the USA, gaining power again. They would wreck the USA because they have learned nothing, and drag the whole global economy down again, And probably start another war or two.

That is something I really do fear. That bunch of clowns gaining conrtol of the worlds biggest economy and the worlds biggest military is not good. I am not so worried about 2016; the way the GOP have obstricted recovery, the lack of any actual ideas, and the lack of a sngle credible presidential candidate in contrast to the continuing econonomic success from Obama makes it unlikely that the GOP will gain the presidency, but the mid-terms this year? Democrat lethargy could let the GOP gain both houses which is a scary idea,

Jun 20, 2014 1:57pm EDT  --  Report as abuse
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