Washington Week with The Atlantic

Good evening and welcome to Washington Week.

I'm Amna Nawaz.

Early battle lines are emerging between Democrats and Republicans as the deadline to raise the debt ceiling looms.

In a speech in Philadelphia, President Biden unveiled his proposed spending plan for the next fiscal year while previewing his priorities heading into the 2024 election cycle.

$6.8 trillion budget would increase military spending and a wide range of new social programs.

It also aims to reduce future budget deficits by nearly $3 trillion over the next decade through savings and tax increases on corporations and the very wealthiest Americans.

And it funds Medicare by taxing households earning over $400,000.

The president issued this challenge to Speaker Kevin McCarthy.

Joe Biden: I am ready to meet with the speaker any time, tomorrow if he has his budget.

Lay it down, tell me what you want to do.

I'll show you what I want to do, see where we can agree on or we don't agree on.

Let's see what we vote on.

Amna Nawaz: But the House Freedom Caucus, a critical voting bloc Speaker McCarthy needs, announced what they are argue are necessary rollbacks to government spending.

Rep. Byron Donalds (R-FL): The only thing is responsible is for government to actually its belt tighten.

Inflation is caused by massive overspending by the federal government.

The only way for America to grow is for Washington to shrink.

Amna Nawaz: Among their demands, ending the president's student loan forgiveness program, tougher work requirements for welfare recipients, taking back billions in unspent COVID-19 funds, money for IRS for tax enforcement and from climate change spending, and a near freeze on discretionary spending for ten years.

Joining me to discuss this and more, Peter Baker, Chief White House Correspondent for The New York Times, Laura Barron-Lopez, White House Correspondent for the PBS Newshour, and Leigh Ann Caldwell, co-Author of The Washington Post Early 202 and Anchor for Washington Post Live.

Welcome to you all.

Thanks for being here.

So, let's just start with this fact, Laura, that a budget is a statement of values.

It is a wish list, right?

But what does this particular budget from President Biden tell us about his priorities and also how the White House sees their position, their leverage right now?

Laura Barron-Lopez, White House Correspondent, PBS Newshour: So, as you said, Amna, this is a big wish list from the president.

He is trying to show to the American public what he wants to get done if they re-elect him and if they potentially re-elect Democrats to majorities in the House and keep them in the majority in the Senate.

And so that includes a big ask that he had already made in the first two years about universal pre-K, free college tuition, also trying to extend the child tax credit again.

And he is also, though, doing some things on-- more spending on defense, more spending at the border.

They asked for more on that too, because, of course, he is trying to protect himself against attacks from GOP on those two issues.

But all of that being said, the president right now is trying to show the public that this is what he wants to do if he is re-elected and he thinks Democrats can run on all of these issues and that the public sentiment is on his side.

Amna Nawaz: Peter, that message on deficit reduction in particular, that was the headline coming out of the White House, that struck me because that has been a core Republican message.

Why is the White House leaning into that so much right now?

Peter Baker, Chief White House Correspondent, The New York Times: Yes.

I think they're trying to basically outflank the Republicans, right?

Because, remember, didn't care too much about deficit spending when Trump was in office and rolling up $7 trillion worth of new debt, but they care about it when a Democrat is in the White House.

And it's a good issue for them because it goes to their core constituency and it kind of unites them at a time where they're divided, right, between the Trumpers and the non-Trumpers.

But what President Biden is trying to do here is, fine, okay, I will meet you there.

I'll do some deficit.

Let me do it my way by taxing the rich.

And, in effect, he is trying to kind of reclaim in a way his more centrist persona, I think, where he's speaking to the values of middle Americans rather than necessarily just the progressives, by talking about the deficits, and in recent weeks, talk about the D.C. crime bill, which he said was too extreme for him to soften penalties, and immigration at the border, talking about how to toughen enforcement down there.

Amna Nawaz: Leigh Ann, when you look at the proposals from that House Freedom Caucus, that is a wing of the party that almost cost Kevin McCarthy his speakership.

Have we heard from him on what he thinks of these proposals?

Leigh Ann Caldwell, Early 202 Co-Author, The Washington Post: Well, it's actually really interesting that the Freedom Caucus came out with their proposals today.

And the reason is because they are the first ones to come out with something concrete among House Republicans.

And so they are laying their stakes of where they stand and what they want earlier than anyone else, trying to move the conversation and the debate toward them.

Meanwhile, what's also simultaneously happening and has been happening for a few weeks now is the Republican whip, Tom Emmer, the number in the House of Representatives, he obviously has to count the votes, get the votes of whatever comes through.

He has been holding listening sessions with Republicans in small groups to find out what they need not only in the budget but on the debt limit as well.

And so while he is holding these listening sessions, trying to see what they can compromise on, the freedom caucus has come out with their demands.

And so it just shows how difficult and tricky this is going to be for Speaker McCarthy.

Amna Nawaz: Is this -- we talk about whether Republicans and Democrats can come together on some kind of compromise on the budget.

Is there a bigger challenge on whether just Republicans can come together on their own proposed budget?

Peter Baker: Yes, I think that is exactly right, they're not united.

As Leigh Ann just talked, I mean, they do not have a single core belief here.

And the problem with what McCarthy has laid in terms of what he wants to do to balance the budget ten years without touching social security, without touching Medicare, without defense spending, that is really hard to do.

You really can't get there.

People just don't remember how much of our budget is spent, how much of our money is spent on those three core things and on interest debts, where you cannot reduce.

So, what are you going to do?

You cut -- our analysts looked at it.

So, you have to cut 70 percent of everything else, right?

Amna Nawaz: 70% of what's left from discretion?

Peter Baker: Everything else, veterans care, transportation, education.

All the other things the government does would have to be scaled back dramatically and they have not explained how they want to do that.

Leigh Ann Caldwell: And one other thing, the thing that McCarthy did say, because I didn't answer your question, is -- Amna Nawaz: Thanks for coming back to that, by the way.

Leigh Ann Caldwell: The Republican budget was supposed to be out April 15th.

That is what leadership told me several weeks ago.

And McCarthy now says that that's going to be delayed probably a few weeks into May.

And that is a challenge for them not only for timing but also it's going to be delayed in large part because they need to come to an agreement.

Laura Barron-Lopez: And that gives the president essentially ammunition to go after them, by saying, look, I've put out my budget, I've put out my priorities.

Just today, we heard Shalanda Young, the head of the Office of Management and Budget, out there talking to reporters saying, we are waiting for them to say what they are going to prioritize, how they are going to effectively issue these cuts.

If they are going to stick to their promise, which McCarthy has said, we are not going to touch social security and Medicare, and then after that, they will start having conversations and see where they can go from there.

Amna Nawaz: I mean, this is a tough question, but the president has said over and over again, I am ready to meet with Speaker McCarthy when they have a budget.

Given where we are now, seeing the president's budget, seeing the opening volley from the House Freedom Caucus, which certainly tie Speaker McCarthy's hands in some way, what is that first conversation going to look like?

Laura Barron-Lopez: Well, they have had somewhat of that conversation already, right?

But it's going to be difficult because I'm sure that President Biden is going to be asking over and over again, well, do you have the votes?

If you ultimately agree to something with me, is he rest of your conference going to vote for it?

And, ultimately, Democrats may have to come over and provide the remaining votes because when we get to the debt ceiling conversation, which is what this is ultimately all about, and whether or not the country goes over the fiscal cliff and defaults on its debts, there are a number of Republicans that do not want to vote for anything, whether it's a clean debt ceiling increase or anything to fund the government.

So, that's going to be for McCarthy to get those votes.

Amna Nawaz: Leigh Ann, when you look at the timeline, I mean, looking ahead to the debt ceiling debate, we know there is a hard date coming in summer when they are going to have two raise that debt ceiling.

I will tell you, senior Republicans insist to me over and over again, we are not going to go over that fiscal cliff.

They will avoid that.

Is that what you are hearing?

Leigh Ann Caldwell: Yes.

That is what Republicans say.

That's what McCarthy has said.

That is what most Republicans say, I should say.

But how they get there is the hard part, and that is what's going to be most difficult.

It's going to come -- I mean, President Biden wants to separate these two issues of the debt limit and government funding.

House Republicans do not.

And that is where the challenge is.

If you can't even agree what you're going to vote on or the contours of it, it makes it very, very difficult.

And then, of course, you have the Senate too.

I will say, though, there is a little bit of a realization among some in the more far-right faction of the party who is realizing that they are not going to get everything that they want, but that is not all of them.

And it's going to take a lot of education and a lot of work from Republican leadership to get people on board.

Amna Nawaz: It's really something we are going to follow very closely in the weeks ahead.