Republicans Dump Jordan After Another Failed Speaker Vote

Plus: The deficit jumped to $1.7 trillion ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Happy Friday! Lots of news today, so let’s get right to it. Jordan dropped out after a secret ballot of House Republicans. (USA Today Network) After Three Strikes, House GOP Votes Jordan Out of Speaker’s Race Jim Jordan will not be the next speaker of the House. That became abundantly clear, if it wasn’t already, when Jordan lost a third round of voting on the House floor Friday and Republicans then dumped him as their nominee in secret balloting at a closed-door meeting. “We are in a very bad place right now,” former House Speaker Kevin McCarthy acknowledged to reporters after the vote, in which 25 Republicans refused to support Jordan. The GOP has been in a bad place for a while. The House has gone 17 days without a speaker — and without being able to handle the nation’s business — after McCarthy was ousted from the job early this month. House Majority Leader Steve Scalise failed to unify his conference and withdrew without a floor vote. Jordan failed three times to win a majority of votes on the House floor. And a briefly considered plan to empower Speaker Pro Tempore Patrick McHenry was angrily rejected Thursday by far-right lawmakers. Republicans must now try to come up with a Plan D. They will resume their race for the speakership on Monday evening with a candidate forum meant to select a new nominee. Candidates will have until Sunday at noon to put forth their names, but at least seven lawmakers are reportedly in the running already. The Republican conference is scheduled to hold an election on Tuesday morning. McCarthy on Friday afternoon endorsed House Majority Whip Tom Emmer of Minnesota, the No. 3 Republican in the chamber. "He is the right person for the job,” McCarthy [said](. “He can unite the conference. He understands the dynamics of the conference. He also understands what it takes to win and keep a majority." Other lawmakers who are running or reported to be considering it include Reps. Jack Bergman of Michigan; Byron Donalds of Florida; Kevin Hern of Oklahoma, the leader of the Republican Study Committee; Mike Johnson of Louisiana; Pete Sessions of Texas and Austin Scott of Georgia. The bottom line: Another wasted week in the House, with no clear path yet for Republicans to resolve their differences and pick a new speaker. 2023 Deficit Rose to $1.7 Trillion. The White House Blames Republican Tax Cuts. The federal budget deficit for fiscal year 2023 was $1.695 trillion, up from $1.375 trillion the prior year, according to data released Friday by the Treasury Department. Receipts for the year came in just over $4.4 trillion, down more than 10% from nearly $4.9 trillion in fiscal year 2022. Outlays fell 2%, from almost $6.3 trillion to about $6.1 trillion. Net interest costs surged to $659 billion, up from $476 billion in 2022 and $352 billion in 2021. “Most economists say these payments are economically wasteful, because the government could spend money in more productive ways than paying back bondholders,” The Washington Post’s Jeff Stein [noted](. Budget watchers warned again about the trajectory of U.S. debt. “The federal government spent more on interest than children in 2023, and we’ll spend more on interest than national defense by 2027,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a non-partisan group that advocates for deficit reduction. “In the face of legitimate emergency needs like natural disasters or foreign conflicts, these interest burdens mean we are not as nimble as we otherwise could be to respond.” Big swings because of student debt plans: The deficit totals for both 2022 and 2023 were affected by the accounting for President Joe Biden’s plan to cancel student loan debt for millions of Americans, though in opposite directions. The estimated long-term cost of the plan, nearly $400 billion, was added to federal outlays for fiscal year 2022, significantly raising the deficit that year. But the Supreme Court rejected the Biden plan in a June 2023 decision, preventing it from being implemented, so the administration recorded a similar, $333 billion reduction in outlays, reducing the deficit for 2023. (The difference between the cost one year and savings the next was primarily due to the Biden administration’s new income-driven repayment plan, a replacement of sorts for the rejected program, which increased the government’s cost of outstanding student loans.) Without the accounting effects of the student debt plan, the 2022 deficit would have been $900 billion, according to the Congressional Budget Office, and the 2023 deficit would have been $2 trillion. In other words, the deficit would have more than doubled. The White House blames the Trump tax cuts: The rising deficit could pose a problem for Biden, who has frequently highlighted the $1.7 trillion in deficit reduction achieved during his first two years in office (though many analysts have called into question just how much credit Bided deserves for that reduction, given that it resulted largely from the expiration of emergency pandemic aid programs). As Biden tries to highlight the surprising strength of the economy, the White House has sought to deflect blame for the growing deficit, instead pointing to Republican tax cuts and decades of trickle-down economics. Asked about the deficit by a reporter last week, White House Press Secretary Karine Jean-Pierre cited the effects of Republican tax cuts and trickle-down economics. “This is what we believe is MAGA-nomics deficit,” she said. The administration argues that, leaving aside the student loan effects, the primary reason the deficit rose from fiscal year 2022 to fiscal year 2023 was a sharp decline in revenues, which fell from 19.3% of GDP to 16.5%. “This drop in revenues was the primary driver of the increase in the deficit as a share of GDP,” the Treasury Department said in its statement. “By contrast, non-interest spending did not meaningfully contribute to the increase in the deficit as a share of GDP.” Non-interest spending rose only slightly as a share of the economy, climbing from 21.4% to 21.6% of GDP, the administration says, adding that spending on programs besides Social Security, Medicare and Medicaid actually fell slightly. The bottom line: The deficit effectively doubled from 2022 to 2023. While Republicans keep arguing that the government has a spending problem, the White House says that we have a revenue problem — a problem that was only temporarily masked in 2022 by stock market gains that led to historically high capital gains tax revenues. The administration on Friday argued that the declining federal receipts highlight the importance of President Joe Biden’s enacted and proposed tax changes and his plan to cut the deficit by $2.5 trillion over the next 10 years. Biden Requests $106 Billion for Israel, Ukraine and Border In a rare address to the nation from the Oval Office Thursday night, President Joe Biden announced that he is requesting billions of dollars from Congress to aid Israel and Ukraine, enhance security at the southern border and boost security in the Indo-Pacific region. Biden framed the request as a matter of national security for the U.S. “You know, history has taught us that when terrorists don’t pay a price for their terror, when dictators don’t pay a price for their aggression, they cause more chaos and death and more destruction. They keep going,” he said. “And the cost and the threats to America and the world keep rising.” Biden added that the funds would be “a smart investment that’s going pay dividends for American security for generations, help us keep American troops out of harm’s way, help us build a world that is safer, more peaceful and more prosperous for our children and grandchildren.” According to details released by the White House Friday, the total request includes: * $61.4 billion for additional military and economic assistance for Ukraine, which has been defending itself against a Russian invasion since February 2022; * $14.3 billion for military assistance for Israel, which is battling the Islamist militant group Hamas in Gaza following a terrorist attack on Israel two weeks ago; * $14 billion for border security and enforcement, including the hiring of 1,300 additional border patrol agents, 1,600 additional asylum officers and 375 new immigration judge teams, as well as the deployment of new scanning machines to help detect fentanyl at points of entry on the border; * $9.15 billion for humanitarian assistance, targeting civilians affected by the wars in Ukraine and Israel; * $4 billion to counter China’s influence among developing nations and in the Indo-Pacific region; and * $3.4 billion to enhance the industrial base focused on submarine construction. The largest component of the supplemental funding request is for Ukraine, and the White House says the amount requested is intended to provide a full year of support for the country. About $45 billion of the funding will go toward military aid, with the rest targeting economic and humanitarian issues. Tough battles ahead: The Democratic-controlled Senate is expected to take up the aid package quickly, though not without controversy. Eight Republican senators wrote a [letter]( Thursday expressing their opposition to any legislation that combines aid for Israel and Ukraine. “These are two separate and unrelated conflicts and it would be wrong to leverage support of aid to Israel in an attempt to get additional aid for Ukraine across the finish line,” the senators wrote. Sen. Chris Murphy, a Democrat from Connecticut, also raised questions about the funding for border security. “How are we going to settle our differences over immigration in the next two weeks?” he said, per the [Associated Press](. “This is a supplemental funding bill. The minute you start loading it up with policies, that sounds like a plan to fail.” The bill’s fate in the House is even less certain. The aid package cannot pass until the leadership issue that has torn the Republican caucus apart is resolved. In addition, although there will likely be plenty of support for aid to Israel, there is growing resistance among House Republicans to providing additional aid to Ukraine. Rep. Roger Williams, a Republican from Texas, said Friday that the Biden request is “a little disturbing” because it mixes different needs. “You can’t blend the two together,” he said, referring to aid for Israel and Ukraine. The bottom line: The White House is seeking quick action on important matters in a world overflowing with conflict, but it’s not clear that Congress is capable of doing anything in a timely manner right now. --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. --------------------------------------------------------------- Fiscal News Roundup - [House Republicans Drop Jim Jordan as Their Nominee for Speaker, Stumbling Back to Square One]( – Associated Press - [The Surprising Group of Republicans Who Kept Jim Jordan From Becoming House Speaker]( – Washington Post - [U.S. Payments on Debt Spike to $659 Billion, Nearly Doubling in Two Years]( – Washington Post - [As 2024 Looms, Biden Unveils $106 Billion Foreign Aid Package]( – Washington Post - [Hamas Frees U.S. Hostages Judith and Natalie Raanan Held in Gaza]( – Reuters - [Trump Co-Defendant Kenneth Chesebro Pleads Guilty in Georgia Election Case]( – Washington Post - [Scoop: D.C. Lawmakers to Introduce New Bill Funding Local News Via Vouchers]( – Axios Views and Analysis - [The Federal Deficit Is Growing. This Is Why]( – Jim Tankersley, New York Times - [Republicans Started a Civil War They Don’t Know How to End]( – Ben Jacobs, New York - [Chaos Is Everywhere but the House of the Representatives]( – Rep Andy Biggs (R-AZ), The Hill - [The Real Reason House Republicans Can’t Elect a Speaker]( – Alex Shephard, New Republic - [The Simple Reason That Jim Jordan’s Speaker Bid Was in Deep Trouble]( – Philip Bump, Washington Post - [Republicans Have Created a Void That’s Becoming Harder to Escape]( – Megan McArdle, Washington Post - [Investing in Ukraine and Israel Is in Our Cold, Hard National Interest]( – Washington Post Editorial Board - [The U.S. Is Spending a Fortune on War and a Pittance on the Climate Crisis]( – Kate Aronoff, New Republic - [Federal Regulations Don’t Really Affect Economic Growth]( – Stuart Shapiro, The Hill - [Cities Try Every Tool to Fix the Housing Crisis Except What Works]( – Catherine Rampell, Washington Post Copyright © 2023 The Fiscal Times, All rights reserved. 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