President-elect Trump is headed for a battle over the debt limit with conservative lawmakers who are demanding steep cuts to federal spending that will significantly complicate Trump’s ability to pass his agenda next year.
Thirty-eight House Republicans sent a warning to Trump last week by rejecting his demand to extend the nation’s borrowing authority for two years, casting doubt on Trump’s influence over GOP conservatives.
Conservatives now say Trump will need to agree to deep cuts in spending if he wants their support for raising the debt limit in 2025.
“We’re about 33 percent overdrawn. We bring in about $4.8 trillion [in revenue] and spend $6.8 trillion [per year], so you got to get about $2 trillion worth of spending down,” said Sen. Rand Paul (R-Ky.).
Paul hailed the defeat of Trump’s plan to raise the debt limit as part of a stopgap government funding measure. He said it shows the leverage fiscal hawks will have over the White House next year.
He said there are blocs of conservatives in both chambers who will insist on matching a debt limit increase with big spending cuts.
“That debate’s going to be ongoing. I for one am going to do what I can to make sure the debt ceiling becomes more important,” he said.
Paul called the defeat of Trump’s proposal to raise the debt limit without spending cuts “a good day for conservatives.”
Speaker Mike Johnson (R-La.) last week also floated a proposal under which the House GOP conference would agree to raise the debt limit by $1.5 trillion in the first of two budget reconciliation packages Republicans are planning for 2025 in exchange for cutting $2.5 trillion in mandatory spending.
That plan has little room for error, however. Republicans will control the House by an extremely small margin of one to three seats, depending on vacancies.
Only one or two GOP lawmakers may be able to derail any budget reconciliation package that includes language to raise the debt ceiling if conservatives think the spending cuts don’t go far enough — or if moderates think cuts go too far.
Republican senators are voicing skepticism about Johnson’s ability to unify his conference over any legislation to raise the debt ceiling — either under the budget reconciliation process or under regular order.
“If he can’t keep this together, where do they go?” asked one GOP senator, who requested anonymity.
A second Republican senator, who also requested anonymity, warned that passing a budget reconciliation package next year will be “hugely complicated.”
“Next year’s going to be a lot tougher than this. And Democrats will be no help. They’ll be actively obstructing,” said the senator, remarking on the difficulty Johnson had passing a stopgap funding measure to avoid a government shutdown before Christmas.
Republicans will control a more comfortable 53-seat majority in the Senate next year.
Trump is already trying to hammer rebellious House conservatives back into line by threatening to support primary challenges against lawmakers who opposed his bid to raise the debt limit before taking office.
He zeroed in last week on Rep. Chip Roy (R-Texas), who is leading the conservative opposition in the House to raising the debt limit without big spending cuts.
“I hope some talented challengers are getting ready in the Great State of Texas to go after Chip in the Primary. He won’t have a chance!” Trump posted on social media.
The federal government is projected to hit the debt limit on Jan. 1, but Treasury Department officials will be able to postpone the deadline for Congress to act until the summer by invoking “extraordinary measures.”
Brian Darling, a GOP strategist and former Senate aide, said Trump is going to have to give conservatives the spending cuts they want and put pressure on Republican moderates to go along with those reforms.
But that will also be a challenge, given Congress’s weak record cutting spending over the past 25 years.
“Now that the debt limit failed as part of the CR, it’s clear the [“Department of Government of Efficiency” (DOGE)] cuts will have to be married to a debt limit increase to get anything through Congress with the support of conservatives,” Darling said.
“If the DOGE thing is more than just a shiny object for conservatives, then its recommendations have to be part of any debt-limit deal,” he added.
Trump tapped his allies Elon Musk and Vivek Ramaswamy to lead DOGE.
House conservatives forced then-President Obama and congressional leaders to agree in the summer of 2011 to more than $900 billion in spending cuts over the next decade to offset a $900 billion increase of the debt limit.
The reforms were short-lived, however, as Congress later agreed to raise the spending caps in 2013 and in subsequent years.
“I think moderate members of the [Republican] caucus are going to have to go along with it, they’re going to have to go along with some spending reforms and cuts to unnecessary programs or else they’re never going to get their debt-limit increase,” Darling said.
Without Republicans unified in the Senate and House on raising the debt ceiling and cutting spending, Trump would have to negotiate with Democrats, who will demand generous increases to social spending in exchange for lifting the debt ceiling.
In February of 2018, Trump cut a deal with Democrats, who were in the Senate and House minority at the time, to increase defense and nondefense spending by roughly $300 billion in exchange for extending the debt ceiling for just more than a year.
Then in July of 2019, Trump agreed to raise discretionary spending caps by another $320 billion in return for Democrats agreeing to extend the debt limit another two years, past the 2020 election. Democrats had more leverage in 2019 because they controlled the House.
Trump so far has signaled his preference to rely entirely on GOP votes to pass his agenda under the budget reconciliation process, which would allow him to circumvent a Senate Democratic filibuster.
He called on Congress to get rid of the debt ceiling entirely so he won’t be under pressure again next year to negotiate an extension of federal borrowing authority — either by agreeing to spending increases demanded by Democrats or to huge cuts demanded by conservatives.
He told NBC News in an interview that getting rid of the debt ceiling would be the “smartest thing [Congress] could do.”
“I would support that entirely,” he said.
