McCarthy weighing $75B defense budget cut in quest for speakership (update)

UPDATE, 1/7, 9:30 a.m. ET: Rep. Kevin McCarthy obtained the required number of votes to become House Speaker last night. His concessions to the holdout Republicans reportedly include demands that any raising of the debt ceiling be accompanied by budget cuts, though it is not clear, yet, what those rule changes might be or whether they would affect defense spending. The Washington Post and other outlets are reporting that McCarthy will allow more Freedom Caucus members — who would be averse to lifting the debt ceiling without cuts — to be seated on the powerful Rules Committee.

After days of negotiations, Rep. Kevin McCarthy is considering cutting the Pentagon budget by $75 billion in order to gain the support of roughly two dozen Republicans who have opposed his bid to become speaker of the House, according to Bloomberg. 

The cut is reportedly part of an “emerging deal” that would cap government spending at 2022 levels, meaning that it would return defense spending to $782 billion — a sharp drop from this year’s allotment of $857 billion.

According to Andrew Lautz, Director of Federal Policy at National Taxpayers Union and regular RS contributor, this could end up being a bigger cut than people think.

“I would argue the cut would be larger than $75 billion. That's a $75 billion cut relative to FY 2023 levels. CBO is not out with their new baseline yet but I imagine they're now projecting a larger than $857 billion national defense topline for FY 2024,” Lautz wrote in an email after this story broke. “Relative to that new expectation, a $782 billion flat FY 2024 topline might be closer to an $100 billion cut."

If any deal does go through, it would still represent one of the largest single-year reductions in the Pentagon’s budget in history. But that is, of course, a big “if.” It remains unclear whether the agreement will be enough to end days of battles in the House over who will serve as speaker, and it’s far from certain that McCarthy will have the power to ensure that such dramatic cuts are actually enacted. 

The proposal could earn support from some progressives in Congress, including Reps. Barbara Lee (D-Calif.) and Mark Pocan (D-Wis.), who pitched a $100 billion haircut for the Department of Defense earlier this year. But it will no doubt face serious headwinds from more hawkish members of Congress, especially given that this year’s Pentagon budget boost easily passed both the House and Senate, and progressives are unlikely to go along with the idea of across-the-board budget cuts.

One of the biggest questions surrounding the deal will be its potential impact on U.S. aid to Ukraine. Several of the Republican holdouts, including Rep. Matt Gaetz (R-Fla.), have strongly opposed the assistance, and McCarthy himself famously quipped late last year that American help should not amount to a “blank check.”

Regardless of the outcome, the proposed deal highlights a significant shift in Republican politics that has taken place in recent years. As Bill Hartung of the Quincy Institute told RS, GOP lawmakers often “gave the Pentagon a pass when they talked about curbing ‘big government,’” but many Freedom Caucus members now seem determined to cut the military down to size.