35 House conservatives pitch IRS and COVID-19 funding repeal to push back debt X-date

A group of 35 House Republicans, made up of members of the conservative House Freedom Caucus and their allies, are upping the pressure on Speaker Kevin McCarthy (R-Calif.) in debt ceiling negotiations and proposing funding clawbacks they say could push a potential default date back through the end of June. 

In a letter to McCarthy, the lawmakers ask him to demand additions to the House GOP debt limit bill if the White House wants to raise the debt limit by a larger amount than was in the legislation and to demand Treasury Secretary Janet Yellen show how she determined a debt default could come as soon as June 1. They also propose combining and quickly passing clawbacks of unused COVID-19 funds and a repeal of a boost to IRS funding, which they say would push back a potential default through the month of June.

“Press reports indicate [President Biden] is pushing to water down the provisions of the House-passed Limit, Save, Grow Act while simultaneously demanding a debt ceiling increase of $4 trillion or more (well beyond the $1.5 trillion in the House bill),” they wrote. “This is outrageous.”

The letter comes as White House and House GOP negotiators appear to be inching closer to a compromise deal to raise the debt ceiling and cut some spending, though the details are unclear and could change.

“I think we’ve been close for six or seven days,” Rep. Patrick McHenry (R-N.C.), one of McCarthy’s deputies negotiating a deal with the White House, told reporters on Thursday. “The issues are thorny. They’re difficult.”

The letter suggested McCarthy, in addition to demanding every provision in the House GOP debt limit increase and spending cut bill, should also ask for the addition of a border security bill and a repeal of funding for a new proposed FBI headquarters.

McCarthy has previously indicated he will not add border security to his debt limit asks and has said negotiations are operating off what is in the House GOP debt limit bill.

The note then casts doubt on Yellen’s debt ceiling projections.

“We should demand publicly and in your negotiations that the Treasury immediately furnish a complete justification of the June 1 projection and the exact fiscal situation expected thereafter, including Treasury’s payment prioritization plan,” the letter said.

The last proposal to suggest a clawback of COVID and IRS funds, the letter said, would “relieve the time pressure surrounding the ‘X-date’” and “enable the House to advance FY2024 appropriations in line with the FY2022 topline discretionary level set forth in the Limit, Save Grow Act.”

But McCarthy has shown no willingness to see the deadline pressure alleviated, and some Republicans note that pressure will help the White House and House GOP get to a deal.

The 35 signers include House Freedom Caucus Chairman Scott Perry (R-Pa.), Rep. Chip Roy (R-Texas), and Rep. Matt Gaetz (R-Fa.). 

The message also got some interest from a more moderate House Republican who did not sign the letter. Rep. Tony Gonzales (R-Texas) tweeted of the largely Freedom Caucus letter: “They might be on to something.”