Speaker McCarthy Answers Questions about the Fiscal Responsibility Act Transcript

So we worked through the night last night. We’re finalizing the language on an agreement with the president that I believe is worthy of the American people. Just to take you back to where we all started, back to February 1st, I sat down with the president. I said, “Let’s work together to be able to raise the debt ceiling, but curve the amount of spending, to let America be able to work again, cut red tape, get some work requirements to help people get back into work.” I think this agreement frames all that from Limit, Save, Grow. It doesn’t get everything everybody wanted, but in divided government, that’s where we end up. I think it’s a very positive bill.

(00:40)
I want to thank Garret Graves and Patrick McHenry for the hours that they put in from the very beginning. No one thought at any given day that we would be where we are today. The president said he wouldn’t negotiate with us. For 97 days, he wouldn’t even allow us to talk. After we passed the bill, we were able to get in. But it wasn’t until the final two weeks that would we really be able to sit down and communicate with one another. I do want to thank the president’s team that he put together. Very professional, very smart, very strong beliefs that are different than ours, and I think at the end of the day, people can look together to be able to pass this in the House and the Senate together, to sign it and send it to the president. With that, I want Garret to say a few words, I want Patrick to say a few words, and then we’ll be able to take questions. We’ll first start with Patrick McHenry.

Thank you, Mr. Speaker, and thank you for your strong leadership here. Without the commitment of House Republicans passing a plan to raise the debt ceiling and take on our nation’s finances and turn the trajectory of this debate with the White House and without the speaker’s firm commitment, we would not have been in these negotiations. The negotiations were intense. They were quite challenging.

(01:54)
The outcome of that is a fundamental shift in the spending trajectory in Washington. This is the biggest set of spending cuts and a substantial change from the spending of the last two years for this administration. That is changing the trajectory of the fiscal house here in Washington. That’s very important. We have consequential work requirements on important programs. We eliminate loopholes, and we bring in the value of work to these important programs. The meaning and value of work connected with fiscal responsibility, those are very important top lines for this negotiation. But it wouldn’t have been possible without the firm commitment of House Republicans and us passing a plan. I’m sorry, and this is Congressman Garret Graves. He did shave this morning for you.

I feel like I need to bend over for this microphone. Hey… What?

They put a lot of hours in.

Yes, we’ve been together quite a bit.

We have. No, no, no. A good friend. Hey. So going on what Patrick said, first of all, look, the Committee for Responsible Federal Budget put together numbers just recently, and they quantify that a child or a grandchild born in America today is going to inherit somewhere near $4.5 million dollars in debt over their lifetime. Think about that for just a minute. Four and a half million dollars for every child or grandchild born in America today that they’re going to inherit as a result of irresponsible, reckless, and selfish spending of politicians in Washington.

(03:39)
As Patrick said and as the speaker said, this is transformational. This truly saves trillions of dollars, not just in these discretionary appropriations bills, but for one of the first times in decades, it actually takes mandatory spending. Some of these programs, these social welfare programs, like SNAP food stamps, TANF, which is cash assistance, and simply said, “Look, if you’re going to ask taxpayers to provide you assistance, then just recognize is that you need to recognize that that’s something that people are doing for you, and you need to work to help yourself, if you’re single, don’t have dependents, if you’re between 18 and up to 54 years old that you can volunteer. You can go to school. You can go work at your church. You can get job assistance and job training, saving billions and billions of dollars, which of course is great for taxpayers.” But you know what’s great for those people that are in these social safety net programs? It helps get them back into the workforce.

(04:31)
This for the first time in over four decades does transformational changes into the permitting environmental review process today. It takes over seven years to get an EAPR, an environmental analysis for a road project. We’ve narrowed that down to one to two years in this bill, streamlining it, working to get electronic documents and transparency to where you can understand what’s going on, make sure it happens faster, ensure that you’re focusing on true environmental outcomes, not all of these other ancillary things, ensuring that Congress plays the role that the founders intended by for the first time putting statutory in the law, something called PEGO, where we are no longer going to allow, as we’ve seen President Biden over the last two years, wave a wand and unilaterally determine that $1.5 trillion in your taxpayer funds are going to be spent without any consideration of Congress.

(05:23)
Look, we could go on and on. I’m going to say it again. This is transformational, number one. Number two, it would not have happened without the strength of the speaker, without the resolve of the speaker telling the White House that he is not backing down, without the support of the Republican Conference in demanding that we make progress in terms of saving, changing this trajectory of this country, and ensuring this entire time that our perspective was that coming from the kids and grandkids, the next generation that are going to inherit the irresponsible spending that Washington has been doing for decades. Thanks.

Not only is this build transformational, I hope you see the change in Congress, not that it just opened the people’s House. I hope you saw going through this, we wanted to be very open to the American public of what we were talking about. No longer do you have to pass a bill to find out what’s in it. We will abide by 72 hours. This will not be thousands of pages. This will be about 150 pages or less. Not only will the members be able to read it, the public will be able to see it as well.

(06:23)
I wanted to make sure that the members actually got the information about the bill before it’s read to all of you. I’m trying to change the House where it works again. We know at any time when you sit and negotiate within two parties that you’ve got to work with both sides of the aisle, so it’s not 100% what everybody wants. But when you look, the country is going to be stronger. This is going to be transformational, where a Congress is literally going to vote to spend less money this year than we spent last year. We’re going to reform cutting red tape so as just NEPA hasn’t been reformed in more than 40 years, streamlining it. Construction jobs today, if you want to build a road, seven years of review. We narrow that to one to two. That is transformational, that Americans get to work again. People can have jobs again, cut our spending, and also protect our military and our vets. With that, let’s open it up for questions. Yes.

Thank you. You said last time, you were more excited than depressed after your phone call with them. This morning, according to what we’re seeing and talking to members of [inaudible 00:07:27] Caucus who you’ve asked to have unity, they are angry, they are not pleased. They think that you’ve given away the farm here. How do you get those conservative members, if you need them, how do you get them back?

I’m not sure who you’re talking to because we did a conference call with our conference and over 95% we’re overwhelmingly excited about what they see they haven’t had. They’re getting the text today in the process. Look, in every single negotiation when it comes to debt ceiling and others, we get both sides of the party voting to pass the bills and I expect the same thing to happen.

Speaker McCarthy, some of the sentiment coming from your members from Ken Buck, he said that he’s appalled by the spending. Ralph Norman calling it insanity. Even if you can afford to lose some of those conservative members, do you worry that someone, because any one of them would bring a motion to vacate?

Not at all.

Are you worried about losing your job as part of these negotiations?

Not at all.

Speaker, how confident are you today that this bill will pass on Wednesday?

Look, I think people are going to sit there and read it. I think it’s good for the American public. You’re going to have Republicans and Democrats be able to move this to the president. The president agreed with this bill as well.

Mr. Speaker?

Yeah.

When the bill comes up Wednesday or Thursday or whenever, will you commit to it not going onto the floor when the market is open? So if there’s some concern that if there’s not the votes, we’re not going to have a tarp issue like we did in 2000?

We’re going to put the bill on the floor in 72 hours and pass it. You spent a lot of time thinking of crazy stuff.

Two questions. Can you take us through the defense, non-defense specifics and then also what about the rules committee? You may have however many members you have on the floor, but Chip Roy just in the last minute tweeted out no, and we know that Dr. Ralph Norman, he didn’t like what was happening when the bill was emerging. Do you have the votes to get this rules committee?

Look, we’re putting out the text everybody. I think we’ll be fine without getting it through. Patrick, you want to handle any of that?

Sure. So everybody wants to know the top line. It’s been a big piece of negotiation. We have spending caps that that are in now in law and enforceable for this congress. That was a significant return to reforms that we’ve had a decade ago to restrain the appropriations process and their capacity to spend more money year over year. And we have the important administrative pay go, which puts in effect very expensive to the taxpayer regulatory and executive decision making and we put constraints on that. There are cost savings there, but in terms of the fiscal house, you want to understand what’s happening now. We have spending caps in place. Spending caps take non-defense discretionary spending down to 704. Thank you for the appropriations reporters that care about the details of this and we hold vets harmless. So this means that for non-defense, non-veterans spending, there are significant cuts year over year.

The exposure stays the same over years?

Yes ma’am.

Speaker McCarthy, what do you have left about up on your call with the president this afternoon?

We just want to get back together now that we finalize all the language, make sure both sides agree that the language is what we agreed to as we spoke. So once we have that, we’ll post it. Now, members will react to whatever rumor you guys are writing about. Let’s let the members actually read the bill before they make a decision and go forward.

What time will the bill be released?

I know there’s been some confusion of some saying fiscal yield year 23 levels is what’s frozen now. Representative Johnson told us yesterday it was back to or roll back fiscal year 22.

Limit, Save, Grow 2022, what this will do is it increases defense and it increase veterans. If you take non-defense with veterans out, it goes below the level of 2022. Yes.

I want to go back to the PAC Act. Will that not be touched in this process?

PAC Act is not.

No.

No.

(11:26)
Yeah. Anybody else? Yes sir.

Talk a little bit about the one or two year timelines or those who are trying to model those firm timelines or however [inaudible 00:11:36]?

So first of all, let’s keep in mind NEPA, the National Environmental Policy Act has not been amended in decades and decades in over 40 years. We have in statute, we are now going to require a one year limit on environmental assessments, which of course is the lower level of review, a two year timeline on environmental impact statements. We are doing an expansion or what we’re referring to as a sharing of categorical exclusions. We are shrinking the scope, which I want to be clear. NEPA has grown to just study all these things that don’t have anything to do with the environment, which I would argue has worked against the protection of the environment.

(12:13)
So we’re trying to refocus the scope back on that, on the environmental impacts in making sure we get the best environmental outcomes. And then lastly, one of the other big wins in there is that we’re actually making some tweaks of the threshold in terms of when NEPA applies. To give you an example, you can have a billion dollar project. If there’s $1 of federal funds in there, you’re going to trigger a National Environmental Policy Act analysis. And so we’ve tried to I think right size those thresholds to where the environmental resource agencies can be focusing on those projects that are truly going to have impacts.

Think about what Garrett just said. It hasn’t been reformed in 40 years. It’s a frustration with people all across this country on both sides of the aisle. It doesn’t matter if you want to build a road, you want to build a renewable energy project. That all gets stopped and studied for years. It’s a frustration. That’s millions of dollars wasted. That is all changing now. So we can build again in America, we can make America stronger. We compete with other countries. This is a win for the entire country and for both sides of the aisle. Yes?

Speaker McCarthy, how important is it to you that you get a majority of your majority and will you?

Yes.

Would you just reflect… You will?

Yes.

Would you reflect-

This is a good strong bill that a majority of Republicans will vote for.

Could you just reflect on the relationship with President Biden? Look, it’s looking like this can be a robust flipping effort on both sides of the aisle. Have you started at all having conversations?

Tom Emer is our WHIP who will continue. And look, members have to have the text before they’re going to say where they are and so they’ll be able to see it and work through it.

Have you shared a conversation-

Yes.

With the president, you were very critical that he took a long time to come to the negotiating table. Once he did negotiate with you and your team, how would you describe your reaction?

I thought his team was very professional, very smart, very tough at the same time.

What about President Biden?

When I was referring to president, I was referring to President Biden. Yeah, talk to President Biden. Yes.

I want to ask on your one pager that you released to members last night, one of the provisions that it’s going to make Congress work again and there’s an appropriations piece that basically would trigger a return to spending at 99% of fiscal levels. Can you explain that and whether or not that prevents future government shutdowns? Is there some other mechanism that has to happen?

Well, I think a frustration America has is when they look at Congress not doing their job. We’ve watched this place break down where members didn’t even have to show up for work, where the very basics of appropriations weren’t passing. So you watched what happened before we took the power where they had this omnibus come at the last moments in Christmas, thousands of pages. Nobody can read it. You didn’t wait 72 hours, hours and just jam it through and fund government that way. We want to make sure Congress works again for the American public. So when we became in the majority, we want to do everything in our power to have this process change. And that’s getting back to the appropriations. Part of the strength of having this agreement, you’ve got the top lines for the next two years, so people can go right and decide your priorities for America.

(15:17)
And the difference here is if you don’t get that job done, you shouldn’t be rewarded. So what it would do is makes your government doesn’t fund down, but it would do a continuing resolution, but at 99%. So it gives you the incentive also to do your job. This was an idea that brought forth by Thomas Massey and I think it’s a very positive idea because what it’s really doing is forcing and it’s giving consequences for members of Congress on both sides of the aisle to do their job. This isn’t going to be a Republican or Democrat idea. This is really for America telling Congress there should be some consequences for you not doing your job and now it gives you the incentive. So what you’ll find is Congress is going to work better, smarter in this process because of it and we’ll get our work done.

You expect all members of the leadership to support you?

Yeah, I haven’t talked to all of them, but I expect that most of them will. Yes, yes.

You obviously [inaudible 00:16:13] some Democrats push [inaudible 00:16:15].

I talked to Hakeem Jeffries on a number of basis time through. Look, members should be able to read the bill beforehand to be able to look at it. But negotiating or communicating with the president, if the president signs off to it, I expect his party will be supportive as well.

[inaudible 00:16:36].

Yes sir.

You’ve characterized this bill to make the case to members as something that has no concessions to Democrats. How do you expect to get-

We raised the debt ceiling. We negotiated in good faith with the president. I remember many times I was in that position as well where we had President Trump negotiating with Speaker Pelosi and an agreement that the president made. We supported the president in that path. But I think there’s a lot in here. Look, you can, everything in this country is not just a Republican and Democrat idea. There’s ideas for America. I firmly believe there are Democrats out there that want to have their projects built again. I may want a pipeline or road built. They may want a renewable energy project built. That’s a project and they’re both being stopped because of what NEPA and studies are doing. This helps everybody. It’s not a Republican or Democrat idea. It helps the country. The idea that we’re going to make this process work again in approaches that’s helpful to the nation.

(17:38)
So that’s a Republican and Democrat. Doesn’t mean you get to determine the outcome of where you’re going to spend your money, but you got a process to do it instead of shutting down here. If you look from an idea that we have putting people out of poverty into work, I think that’s a positive thing. We’ve watched time and again, there’ll be people on both sides might have a little difference of opinion of that, but that’s helpful. When you look at PEGO, I think it doesn’t matter who’s in power, Republican or Democrat, you want to make sure the constitution works. That the president, whoever it is, be it President Biden, be it President Trump that can’t go around.

(18:13)
This was an executive order that President Trump actually put in. We took it, put it in statue now and made it stronger. That’s good going forward long term on both sides of the aisle. So I think people will look back and say, oh, I didn’t get exactly what I wanted, but there’s something in here that it shouldn’t be about you. It should be about America. America believes that we’ve spent too much, so this spends less. First Congress to do it. We pull back money. You know what? No longer are we going to send American taxpayer money to the CDC global fund to China. I think both sides of the aisle would like that idea. There’s a lot in here for both sides. Yes?

This is a two meter deal followed by years of non-enforceable funding targets. That’s not the 10-year deal of budget caps that you guys were originally seeking. So how do you convince the Republican Caucus that this is truly transformational when it comes to producing that [inaudible 00:19:07]?

You want to help or you want me to?

So look, first we’ve been putting in place spending caps. What we saw with the last caps agreement is they eventually waived them and then we had a compromise. And the compromise was we had set spending levels for those additional years, knowing full well that the next Congress could even undo our spending caps. But now we’ve moored the process to spending restraint and a glide path for how we fund our government. So this does have an effect next congress. Next Congress will have to change that number through the legislative process just like they’d changed the number on sequestration, which is the enforcement mechanism for this Congress. So two different ways to achieve the similar outcome. Fully recognizing that Congress legislates and can undo existing laws.

(19:57)
So it’s a practical application. The fact that we are in-house Republicans trying to drive spending as low as we possibly can and enact it and a White House who’s spent more money, this White House has spent more money than any other president outside of wartime. So the difference between our perspective and their perspective is enormous. So for us to draw them down and actually have spending restraint year over year and within a Congress is truly transformational and different than what we’ve experienced in recent years in Congress. This is the most conservative spending package in my service in Congress and this is my 10th term.

Can I just clarify one thing? You said that there were two years enforceable and four years now. I want to be very clear. It is six years of enforceable caps. Okay. There are different enforceability mechanisms for the first two years as compared to the remaining six, but I think it’s important. These are six years of enforceable caps. Lastly, in regard to what Chairman McHenry just said. Something that’s important to keep in mind and one of the things we realized during negotiations, there has never been a 10 year deal that has been abided by. As the chairman just said, Congress always comes in and changes it. We did score Limit, Save, Grow over 10 years. As we started studying some of these previous deals and realized they don’t ever abide by that and there was some pushback during negotiations. We realized that a six year was a bit more honest and transparent in regard to the savings. And we believe that that’s going to generate somewhere around $2 trillion in savings from those caps alone. Not even talking about some of the other huge policy points.

But the subsequent four years, you would to have the majority for them to be enforceable? Correct?

Well, sure, but I mean keep in mind that any… I mean, next year you could lose the House, Senate and as you could have Democrat control the House, Senate, and White House all over again and you could have us return to reckless spending. There’s nothing we can do that binds the next Congress. There’s nothing you can do. So what we’ve tried to put in is the strongest enforcement mechanism to truly change that trajectory, put us on a financially sustainable path. And I think that this was a really good win.

Can you just talk about the Senate? What conversations have you had with leaders McConnell and Schumer?

I haven’t talked to Schumer about this yet. I talked to McConnell last night, walked them through. I’m going to talk to the Senate Republicans today. We’ll do a conference call, walk them through the bill as well.

Last question.

Yes.

Can you guys take us through the specifics on the work requirements? Is it SNAP where we’re seeing that up to 54, not Medicaid, I assume?

Correct.

And then also on permitting, is there any transmission in this bill?

First SNAP and TANIF is what we’re talking about, two different functions there. On SNAP, we have additional work requirements. They’re quite consequential. You’ll see text and you can judge for yourself. And then we have states that play games with how they roll over funds and they accrue more account balances they use on other things. We take that gamesmanship down dramatically and significantly. On TANIF, we have different schemes and loopholes that we close and we clean that program up significantly in putting in place the most significant reforms we’ve seen in generations.

You want do-

Transmission?

Yeah, sure. So there was a lot of talk about how to approach the permitting and regulatory just challenges that are preventing projects from moving forward. And there was discussion about potentially separating the way we treat different types of projects. But at the end of the day, everyone benefits. And so we don’t bias one type of project versus another. All types of projects benefit under the reforms and the streamlining that we’ve put in place. Now last thing to keep in mind is if you have a project that has a lower environmental impact, like an environmental restoration project, of course under this it’ll be calibrated, your review will be calibrated. We also did include a study in there to begin laying the groundwork to better understand how you can sort of cause interoperability among the different regions, the different ISOs or different regions of connectivity around the United States. So how can you go from one planning area of electricity to an adjacent one? How do you interconnect and what type of capacity do you have to share electricity?

I need to follow up on this too. He explained what’s in here. There’s much more that needs to be done. I had a conversation with the president, I pledged to the president that we will continue working with them and with Democrats across the way because we need energy, all forms of energy, especially for our grid to double in the next future. And so we made a commitment that we’re not stopping now and that would also deal with transmission, it would deal with pipelines and others. But I had that conversation with the president yesterday and with the White House. Again, if you want to follow up any on that as well.

Yeah, sure. I’m sorry I hadn’t slept lately. One other thing.

It’s been a long [inaudible 00:24:53].

Yeah, but y’all got free chips yesterday. So one other thing is in regard to transmission, look, we recognize that there are fundamental problems with transmission. All these energy generations have been built and can’t connect it to the grid. One of the other things we did in FAST 41, there is a process to expedite permitting and regulatory. We did include some of the energy storage components in there that had been previously left out. That’s a major improvement for transmission and balancing for intermittent energy sources. And then lastly, the speaker did have a conversation with the president. Again, they both acknowledge we have major transmission problems across the United States, but rather than trying to step in and prescribe a solution when this issue really is not well understood in the Congress where we would perhaps cause more problems than solutions, there’s discussion about how we move forward in a bicameral bipartisan way in really studying this and make sure that we move forward in the way that’s going to solve problems, not cause more.

And I talked to the president, then I called Hakeem Jeffries to the Democratic [inaudible 00:26:00]. I wanted him to hear directly from me exactly what I told the president, to pledging that we would continue this work to try to solve. I think if we can get energy right in America, it will not only make us independent, but it will make us stronger, produce more jobs. And there’s great ideas on both sides of the isle. That’s really when you look at things for Republicans and Democrats, I think that’s a very strong place, especially in this bill as well and the pledge of what we’re going to work together going forward. So thank you all very much. Appreciate it.