House Speaker Kevin McCarthy is leading a Republican revolution. The bulk of his conference is behind him. They have confidence in him and his debt reform bill will pass the House.
Really, with a $2.1 trillion spending cut, the largest of its kind according to the CBO and FY '24 budget cut from FY '23 of $139 billion and a tough across the board 1% spending cut sequester if appropriators don't maintain the agreed upon 1% cap on spending, plus a number of pro-growth policy reforms is all good. In divided government, compromises are necessary. The debt deal is not as good as the original "Limit, Save, Grow Bill," but I think Speaker McCarthy got about 70% which is awfully good. Remember, Reagan always said, "he’d take a 70% win now, and get the rest later."
Actually, it's a resounding victory for the Republican House because it completely spun around Joe Biden. Remember, Biden wanted a clean debt bill with no budget reforms. He argued that for almost 100 days. Then, all of a sudden, this weekend he agreed to a massive spending cut and huge policy reforms. I would call that a major political victory for the GOP.
It's a first step toward reforming the entire federal government. Other steps will follow, including a House budget resolution. More spending cuts are on the way. More pro-growth policies are on the way. All you need is a Republican Senate and a Republican in the White House. I think that's coming.
US CONSUMER SPENDING JUMPED IN APRIL AND INFLATION ACCELERATED
Remember, "Rome wasn't built in a day," that according to British writer John Heywood who wrote that in 1538. I knew him well. (That was a joke.) Mr. Heywood wrote that the Romans were "laying bricks every hour." So, I would say to some of my very good conservative friends, brick by brick, day by day.
I understand your trepidations about the debt deal and I always respect your point of view, and I generally share your legislative instincts, but on this one I think we have a chance to restore conservative governance and a prosperous economic agenda. Hear it from the Speaker himself:
KEVIN MCCARTHY: I'm not sure what in the bill people are concerned about. It is the largest savings of 2.1 trillion we've ever had. It's the first time in history the largest rescissions where we're pulling money back from the hardworking taxpayers that are going to China. Are they opposed to work requirements for welfare?
Besides the spending cuts and the sequestration with no regular budget order, the work requirements and the NEPA permitting reforms are important pro-growth measures to promote work and reopen the fossil fuel spigots. Also, the $1.9 billion IRS enforcement money was taken out of this coming fiscal year's budget and student loan payments will be restarted to the tune of $5 billion a month. Plus, they're going to take back $30 billion in unspent COVID money.
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Joe Biden's massive regulatory assault on energy and business will be stopped with a pay-go provision that says any executive branch regulatory costs must be offset by regulatory cost reduction. By the way, Biden's modern socialism regulatory assault has cost roughly $1.5 trillion and let's not forget there are no tax hikes. Period. Full stop.
This is a political win for Republicans and conservatives. This is a fiscal win. This is a free-market capitalism win. Don't let the perfect be the enemy of the good. Save America. Pass the bill.
This article is adapted from Larry Kudlow’s opening commentary on the May 30, 2023, edition of "Kudlow."
