Hardliners Revolt Against Speaker’s Spending Deal

Plus: The top 1% pays lower tax rate in most states ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Happy Wednesday! Chris Christie just dropped out of the Republican presidential primary, Nikki Haley and Ron DeSantis are set for a one-on-one debate tonight and Alabama football coach Nick Saban reportedly said he’s retiring. Here’s what else we’re watching. Speaker Johnson is under intense fire from his own members. (Sipa USA) House Hardliners Revolt Against Speaker’s Spending Deal A dozen right-wing Republicans revolted against their party leadership Wednesday, sinking a procedural vote and halting legislative action on the House floor in protest over the $1.66 trillion topline spending deal cut by Speaker Mike Johnson and Senate Majority Leader Chuck Schumer. With government funding deadlines looking on January 19 and February 2, Johnson agreed to 2024 discretionary spending plans that made only minor tweaks to the deal then-speaker Kevin McCarthy made with the White House last year — a deal that eventually led to McCarthy’s ouster. Conservatives were infuriated by McCarthy’s deal and they were angered again by Johnson’s acceptance of the framework this week. The House Freedom Caucus quickly labeled it a “total failure.” The agreement included a McCarthy side deal for $69 billion in reprogrammed funding that conservatives say Johnson should have rejected. Pushing for more fight: The latest right-wing rebellion recalls the blockade enacted by conservatives last year after the McCarthy deal. The renewed GOP drama illustrates again just how chaotic the House has been under the control of a narrow and fractious Republican majority. Right-wing Republicans had helped elevate Johnson to the speakership and have been pushing him to take a harder line against Democrats by pushing for stiffer border security measures and further spending cuts, even if it means shutting down the government. They want a fight. They want more fight. “We’re making a statement that the deal, as has been announced — that doesn’t secure the border and doesn’t cut out spending and is going to be passed apparently under suspension of the rules with predominantly Democrat votes — is unacceptable,” Rep. Bob Good of Virginia, the leader of the House Freedom Caucus and one of those blocking Wednesday’s rules vote, told reporters. The other Republicans who voted against the rule are Reps. Andy Biggs of Arizona, Eric Burlison of Missouri, Eli Crane of Arizona, Paul Gosar of Arizona, Marjorie Taylor Greene of Georgia, Anna Paulina Luna of Florida, Blake Moore of Utah, Ralph Norman of South Carolina, Andrew Ogles of Tennessee, Scott Perry of Pennsylvania, Matt Rosendale of Montana and Chip Roy of Texas. Moore reportedly changed his vote to no so that GOP leaders could bring the measure up again at a later date. “We want to see bills moving forward that are going to actually cut spending like we said we would do,” Roy told CNN. “And a $1.66 trillion monstrosity — that’s not what we signed up for, so we kind of body-checked the conference a little bit and said, hey, let’s get back in here, let’s get in the room, let’s go figure out what we need to do.” Roy and other hardliners argue that Johnson should try to exert more leverage in spending talks and that simply accepting a continuing resolution through the rest of the fiscal year would cut spending by about $100 billion compared with the latest deal. Roy again refused to rule out a motion to oust Johnson as speaker. “What I’ve said is that everything is always on the table,” Roy said on CNN, adding that Johnson is a friend. For his part, Johnson has sought to sell his spending deal as a win for Republicans because it modified last year’s framework to provide an additional $16 billion in 2024 spending cuts, including the accelerated rescission of $10 billion in IRS funding. He has reportedly also made clear to his conference that he doesn’t favor a shutdown, which could hurt Republicans in an election year, though he has not yet laid out his strategy for the short-term funding extension that will likely be needed to avoid a shutdown while appropriators work on spending bills. While hardliners ramp up the pressure on Johnson and flirt with the idea of calling for his removal, the speaker insists he and his members must face the political realities of governing with an extremely slim House majority in a divided government, where any spending deal would have to be approved by a Democratic-led Senate and White House. “We have to be the adults in the room and govern,” he reportedly told Fox News in a Wednesday afternoon interview, adding that he doesn’t think his job is in jeopardy. The speaker still has support among the wider GOP conference, and any push to boot him would plunge Republicans into another messy and very public display of disarray. “We’re in a divided government. Anyone who thinks we are going to get more out of this deal is lying and they’re kidding themselves,” Republican Rep. Mike Lawler of New York [told reporters](. “The speaker did the best he could under the circumstances and frankly our hand was weakened by the eight nitwits who removed Speaker McCarthy.” The outlook: A potential push to oust Johnson wouldn’t accomplish much, though that consideration hasn’t stopped hardliners in some cases before. The speaker now faces even more pressure as funding for some agencies is due to expire in just nine days and there’s no chance that the appropriations bills will be done in time. Will Johnson embrace the idea of a short-term funding bill or accept a partial government shutdown that might appease those looking for a fight? Some on the right are also now pushing for policy riders that Democrats will reject as poison pills, further clouding the prospects of avoiding at least a partial government shutdown. Johnson may be more likely to keep border security demands tied to the supplemental spending deal to provide more aid for Ukraine. He reportedly told radio host Hugh Hewitt: “We cannot be involved in securing the border of Ukraine or other nations until we secure our own. And so that border fight is coming, and we’re going to die on that hill.” Biden Admin Plans $2.5 Billion in New Food Assistance — but Some Republican Governors Say No Thanks A new federal program will provide food assistance this summer to nearly 21 million children in 35 states, the Department of Agriculture announced Wednesday. The Summer Electronic Benefit Transfer program will offer families $120 in benefits per eligible child, which can be spent in grocery stores and at farmers markets. Families that are currently eligible for free or reduced-price lunches automatically qualify. The program will cost an estimated $2.5 billion. Anti-hunger advocates say the program is needed, even though there is already a federal Summer Food Service Program that provides sites where children can eat for free, as well as numerous state-level food aid programs. “By implementing the program, states will help ensure that children have a hunger-free summer and return to school well-nourished and ready to learn,” Food Research & Action Center President Luis Guardia [told]( CBS News. But not everyone is excited. Republican governors in 15 states have rejected the program, citing various reasons. “I don’t believe in welfare,” said Nebraska Gov. Jim Pillen, per [The Washington Post](. Iowa Gov. Kim Reynolds said the summer program, which operates much like SNAP, the federal food aid program sometimes referred to as food stamps, “does nothing to promote nutrition at a time when childhood obesity has become an epidemic.” And Oklahoma Gov. Kevin Stitt said a new food aid program would simply “cause more bureaucracy for families to wade through.” Agriculture Secretary Tom Vilsack said the goal of the program is to help ensure that no child in the U.S. goes hungry. “They certainly shouldn't go hungry because they lose access to nutritious school meals during the summer months,” he said. “For the life of me I don't see why 50 governors aren't doing” the program, he added, “but we're happy that 35 are.” Top 1% Pays Lower Tax Rate in Most States: Study The wealthiest households in most states pay a lower state and local tax rate than other households, according to a new report from the Institute on Taxation and Economic Policy, a non-partisan research group that advocates for a more equitable tax system. The ITEP [study]( found that the average effective state and local tax rate in the U.S. is 11.3% for households in the bottom 20% of incomes, 10.5% for those in the middle 20% of incomes, and 7.2% for those in the top 1%. In the 10 most regressive states – Florida, Washington, Tennessee, Pennsylvania, Nevada, South Dakota, Texas, Illinois, Arkansas and Louisiana – the middle 60% of households pay a tax rate about twice as high as the top 1%, and the bottom 20% of households pay a rate about three times as high. “When we look at how states are taxing their residents, it’s clear they’re falling very far short of what most people consider to be a fair tax code,” said Carl Davis, ITEP’s research director. The reason for the regressive results is pretty simple: Most states rely on sales and property taxes to raise revenue, and those taxes claim a higher percentage of income for the poor and middle class than they do for the rich. To make state and local tax rates less regressive, ITEP recommends that states rely more heavily on income taxes, which allow higher-income households to pay an equal – or, in the case of graduated tax rates, higher – share of tax revenues. Number of the Day: 20 Million A record 20 million people have signed up for health care through the marketplaces created by the Affordable Care Act, the Centers for Medicare and Medicaid Services announced Wednesday. This marks the third consecutive year that ACA enrollment has set a record high. “Today, we hit a major milestone in lowering costs and ensuring all Americans have access to quality, affordable health care,” President Joe Biden said in a statement. “With six days left to still get covered, 8 million more Americans have signed up for ACA coverage than when I took office.” The disenrollment of more than 14 million people from state Medicaid programs following the official end of the Covid-19 pandemic likely played a role in the new high for ACA signups. People who lost their Medicaid coverage in 2023 were given more time to sign up for insurance through the ACA in 2024. --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- Fiscal News Roundup - [GOP Hardliners Revolt Against Johnson-Schumer Government Funding Deal]( – NBC News - [Conservatives Take Revenge for Johnson's Spending Deal by Halting Action on House Floor]( – Politico - [‘He Announced the Terms of the Surrender’: Conservatives Unleash Rage at Johnson Over Spending Deal]( – Politico - [Johnson ‘Not Concerned’ About Chip Roy’s Warnings Over Spending Deal]( – The Hill - [Both Chambers Near Decisions on Another Stopgap Spending Bill]( – Roll Call - [Republicans Win Faster IRS Cuts in Funding Deal]( – The Hill - [Jason Smith Questions Harvard, MIT, Penn Tax Exemptions]( – Politico - [Republican Governors in 15 States Reject Summer Food Money for Kids]( – Washington Post - [Newsom Proposes Plan to Fix California’s $38-Billion Budget Deficit]( – The Hill Views and Analysis - [Doubling Down on Cuts to the IRS Is Bad for the Federal Budget and for Tax Fairness]( – David Mitchell, Washington Center for Equitable Growth - [The Bond Market Rally Is Overlooking a Soaring $2 Trillion Debt Problem]( – Anchalee Worrachate, Liz Capo McCormick and Garfield Reynolds, Bloomberg - [The Child Tax Credit Is Back From the Dead]( – Grace Segers, New Republic - [If Republicans Want a Better Budget Deal, They Need to Win More Elections]( – Jonah Goldberg, The Dispatch - [Johnson Needs Trump’s Permission Not to Shut Down the Government]( – Ed Kilgore, New York - [Private Equity Firms Are Gnawing Away at U.S. Health Care]( – Ashish K. Jha, Washington Post - [New Research Doesn’t Overturn Consensus on Rising U.S. Income Inequality]( – Austin Clemens, Equitable Growth Copyright © 2023 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](