Editorial Update: In September, after this story went to press, President Trump struck a deal with Democrats to fund the government and extend the debt ceiling until December as part of a relief package in the wake of Hurricane Harvey. “If we get to December and we have not repealed and replaced Obamacare,” funded Trump’s Mexican border wall or overhauled tax laws, “it’s not going to be pretty,” Freedom Caucus Chairman Rep. Mark Meadows (R-N.C.) said at a Sept. 7 Bloomberg News breakfast. “No way the president will be negotiating from a position of strength.”
House Speaker Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.) face a very challenging autumn. They confront a backlog of daunting fiscal issues, relatively narrow Republican majorities in their respective chambers, virtually united Democratic opposition to their plans and a new president who is inexperienced, volatile and erratic.
Speaker Ryan has an additional problem on his plate: the House Freedom Caucus, a group of about three dozen combative, often contentious, hardline conservatives who seem eager to ignore and even defy the wishes of the speaker and other Republican leaders on critical issues.
As McConnell and Ryan concoct their fall strategies, they must consider the likely stance of the Freedom Caucus for a practical reason: If this group decides to oppose high-profile Republican initiatives, they are usually able to block them.
Lawmakers, analysts and pundits still have not decided how to assess the members of the House Freedom Caucus. Some argue they are committed idealists who deserve respect. Others believe they are implacable obstructionists who deserve derision. But virtually everyone agrees they will be a significant force on Capitol Hill this fall.
“The Freedom Caucus holds the balance of power in the House. Virtually every issue that is coming up this fall is something they care about,” said Stan Collender, a budget expert at the Qorvis MSLGROUP. “When they care about something, they are willing to go to the wall for it. They helped bring down the last speaker [John Boehner] and they are willing to bring down Speaker Ryan if he departs from their agenda. And Ryan understands this.”
Congress returns to Washington in September with a lengthy to-do list that includes basic measures to fund the government and raise the debt ceiling, as well as more ambitious items such as overhauling the tax code and agreeing on an aid package to help the victims of Hurricane Harvey. That doesn’t even include lingering hopes of repealing and replacing the Affordable Care Act (Obamacare) and enacting infrastructure legislation.
The 2018 fiscal year begins Oct. 1, 2017. None of the 12 annual spending bills for 2018 were approved by Congress before it left for its August recess. These 12 spending bills allocate more than $1 trillion in discretionary funds that keep the federal government operating. Additionally, the statutory debt ceiling, which is now nearly $20 trillion, must be increased this autumn by Congress to allow the federal government to honor its obligations and pay its bills. Treasury Secretary Steven Mnuchin sent congressional leaders a letter requesting that Congress pass a “clean” debt ceiling increase by Sept. 29. The Congressional Budget Office (CBO) has said the debt ceiling needs to be raised by mid-October to avoid serious disruptions.
Rudolph Penner, a former CBO director and now a fellow at the Urban Institute, said he expects a “very scary” fall, with market-disrupting battles on both the debt ceiling and fiscal 2018 spending. “There are so many politically hard issues and so little consensus on budget and tax policy. I assume we’ll somehow get through this, but not without getting frightened on a regular basis,” Penner said.
Alan Blinder, a former vice chairman of the Federal Reserve Board and one of the U.S.’s leading economists at Princeton University, said he’s bracing for a “messy” autumn in Congress. He expects lawmakers to avert spending and debt ceiling meltdowns and ultimately approve “modest fiscal stimulus” through a tax cut package. “The sausage-making in Congress will not be pretty to watch, but I think Republicans will probably be able to avoid total disaster,” he said. “They don’t have much choice. Republicans are everywhere in Washington. If the government shuts down or there’s a default, they would have no one else to blame but themselves.”
The central players in the autumn drama on Capitol Hill will be Ryan and McConnell. Ryan is a high-energy 47-year-old lawmaker from Wisconsin who was the GOP’s vice presidential nominee in 2012 and became the House speaker in October 2015. He presides over an unruly and raucous House Republican caucus with several rival factions trying to drive the agenda. Republicans have a 240-to-194 majority in the House (with one vacancy).
McConnell, a wily 75-year-old senator from Kentucky, has been the Senate Republican leader since 2006 and the Senate majority leader since 2015. He presides over a narrow 52-to-48 Republican majority. McConnell is a respected GOP leader but his failure to secure the requisite 50 votes to repeal and replace the Affordable Care Act in August triggered the fury of President Donald Trump, who unleashed scathing attacks on McConnell during a mid-August tweet-storm.
Trump and his top economic team will be a critical part of the legislative drama. But they are wild cards, injecting uncertainty into an already complex situation. Trump has shown little understanding of the legislative process or the substance, let alone nuance, of most issues. His volatile temperament has shaken some Republicans on Capitol Hill. But he remains popular with his core Republican base so few lawmakers have openly defied him. Mnuchin, the treasury secretary, and Mick Mulvaney, the White House budget director, will be active in the fall negotiations. Mnuchin is expected to be pragmatic and Mulvaney is likely to be confrontational. Gary Cohn, the director of the National Economic Council, is expected to be an important behind-the-scenes negotiator for the White House.
Senate Democratic Leader Chuck Schumer of New York and House Democratic Leader Nancy Pelosi of California have signaled they will hold back in the opening weeks of the fall session, waiting to see what policies the GOP propose. But Schumer and Pelosi may ultimately emerge to broker and help pass spending and debt ceiling agreements to avert a fiscal meltdown.
Republicans on Capitol Hill remain deeply divided, especially in the House, where rival factions jostle for ascendancy. The House Freedom Caucus is a critical part of this unruly mix.
On Jan. 26, 2015, nine very conservative members of the House Republican conference announced the formation of the House Freedom Caucus. The founding members were Scott Garrett of New Jersey; Jim Jordan of Ohio; John Fleming of Louisiana; Matt Salmon of Arizona; Justin Amash of Michigan; Raúl Labrador of Idaho; Mick Mulvaney of South Carolina; Ron DeSantis of Florida; and Mark Meadows of North Carolina.
They said their main purpose was to advocate for limited, constitutional government. “The House Freedom Caucus gives a voice to countless Americans who feel that Washington does not represent them. We support open, accountable, and limited government, the Constitution and the rule of law, and policies that promote the liberty, safety and prosperity for all Americans,” they declared in their mission statement. Jordan of Ohio was the first chairman of the caucus and said it would be a “smaller, more cohesive, more agile and more active” group of Republican conservatives.
Meadows said in a statement at the time of the creation of the Freedom Caucus that it would “provide a unified conservative voice in the House Republican Conference.” He added that he wanted to work with Republican leaders “to make the concerns of conservatives known as we work together to advance a pro-growth, limited government agenda in the House.”
A study of the Freedom Caucus by the Pew Research Center in 2015 identified 36 members in the group. It noted that more than 70 percent of its members were first elected to the House in 2010 or later. On average, they are younger than the rest of the House GOP and many are veterans of the Tea Party movement. All are men. They want power shifted out of leadership to rank-and-file members. Membership to the Freedom Caucus is by invitation and the group seeks to act as a bloc on major issues. According to the caucus’s by-laws, if 80 percent of Freedom Caucus members agree on an issue, the entire group will vote as a bloc on the matter. Each member is given two exemptions per Congress. Many of the Freedom Caucus members are part of the larger Republican Study Committee, which has about 170 members.
Even though Republicans in the House hold a comfortable majority and could easily pass legislation without the support of Freedom Caucus members if a few Democrats joined them, they are loath to reach across the aisle in such a hyper-partisan environment. As a result, the House Freedom Caucus wields a disproportionate amount of power — a reality that former Speaker Boehner quickly came to realize.
The House Freedom Caucus was a frequent thorn in Boehner’s side. Meadows even voted against Boehner to be speaker in January 2015 and later filed a procedural motion to “vacate the chair,” which was the first overt attempt to oust Boehner. Boehner eventually resigned as speaker on Sept. 25, 2015. The Freedom Caucus declined to support House Majority Leader Kevin McCarthy of California to succeed him. Ryan eventually was elected to the post on Oct. 29, 2015, with the Freedom Caucus’s assent but not full enthusiasm.
The Freedom Caucus was heartened by the election of Donald Trump as president and by the retention of Republican majorities in Congress last November. Less than a month later, Meadows was elected chairman of the Freedom Caucus for a two-year term.
Meadows, 58, is a smooth, affable lawmaker who represents North Carolina’s 11th congressional district. He was born in a U.S. Army field hospital in Verdun, France. His father was stationed there with his mother, a surgical nurse. Meadows attended high school in Florida and studied business management at the University of South Florida.
He and his wife, Debbie, started a small sandwich shop in the North Carolina resort town of Highlands and then Mark moved into real estate. He worked in Republican Party politics at the precinct level and then ran in 2012 in the Republican primary for a House seat. He won with 38 percent of the vote in a seven-person Republican primary and easily won the general election that November.
In his first year in the House, Meadows supported the government shutdown strategy of some House GOP conservatives in an effort to kill the Affordable Care Act (ACA). President Barack Obama refused to relent and after a 17-day government shutdown, Republicans backed down. Meadows later acknowledged the GOP’s strategy to shutter the government failed to accomplish its central goal.
“With a new administration coming in, the Freedom Caucus is ready to go to work on day one to help lead the fight to give Americans a voice in their government,” Meadows said after his election as Freedom Caucus chairman. However, the group has not seen eye to eye with Trump and congressional leaders on several key issues, most notably health care. They opposed the initial House Republican bill to repeal and replace the ACA in March 2017, arguing that it did not go far enough to dismantle Obama’s signature domestic achievement and did not adequately reflect conservative goals. Ryan was forced to withdraw the bill and cobble together an alternative that eventually passed muster in the House but stalled in the Senate, where McConnell was unable to balance the opposing demands of hardliners and moderate Republicans.
The Freedom Caucus’s opposition to the first Republican health care bill infuriated Trump. Just before the first vote was scheduled, Trump reportedly threatened Meadows at a White House meeting. “I’m going to come after you, but I know I won’t have to because I know you’ll vote yes,” Trump said. But Meadows opposed the first bill. After the bill was withdrawn, Trump hammered Democrats and the Freedom Caucus. “The Freedom Caucus will hurt the entire Republican agenda if they don’t get on the team, & fast. We must fight them, & Dems, in 2018,” he tweeted.
Criticism of the Freedom Caucus has also come from other House Republicans. Rep. Adam Kinzinger of Illinois wrote a stinging rebuke of the group in an essay in The New York Times on March 31. Kinzinger said the Freedom Caucus was merely a force of opposition that refused reasonable compromises. It was offered reductions in essential health benefits that alienated some moderates, agreed to the plan but then, according to Kinzinger, upped the ante by demanding to strip protections for people with pre-existing conditions and younger people on their parents’ health plans.
“It’s what they do,” Kinzinger wrote. “They move the goal posts, and once that happens, they still refuse to play. We are the Charlie Brown party, hoping that this time, things will be different. But time and again, the Freedom Caucus is Lucy — pulling the ball out from under us, let us take the fall and smiling to themselves for making a splash. It’s a cheap tactic, not a way to govern, and enough is enough.”
Meadows insists he is open to compromise, arguing this is a skill he learned during his real estate career. In a speech at the National Press Club on July 24, Meadows said the Freedom Caucus is determined to repeal the ACA, cut government spending and pass substantial tax cuts. “The American people are tired of gridlock,” he said, adding that Republicans must advance a bold agenda this fall. “We must be very aggressive with the tax cut,” he added.
In late July, Meadows and other members of the Freedom Caucus called on Ryan to dramatically scale back the House’s August recess so lawmakers could stay in Washington and work on health, spending and tax issues. (Ryan did not change the House schedule.) Freedom Caucus members also said they would support increasing the debt ceiling only if the measure is linked to spending cuts, entitlement reforms or ACA repeal.
So what will happen this fall as Congress tries to fund the government, raise the debt ceiling, overhaul the tax code, address Harvey and return to health care legislation?
No one knows for sure, but most analysts expect plenty of high-stakes combat.
“The Freedom Caucus will be very important. They are more like a gang than a coalition. They operate in a no-compromise zone. They will probably be very disruptive this fall,” predicted Collender.
Phil Joyce, a fiscal policy expert at the University of Maryland, believes the Freedom Caucus will play a large role, especially on debt ceiling legislation. “The Freedom Caucus seems determined not to have a clean debt ceiling. They see the debt ceiling as something to use as leverage to push their agenda not as legislation that must be passed to protect the ‘full faith and credit’ of the U.S. government,” he said.
“As long as bipartisanship is dead, and Democrats continue to oppose pretty much everything that Republicans do, and Republicans have a narrow majority in the Congress, the Freedom Caucus will be very important. They can make a huge difference,” he added. “Probably the best we can hope for is to limp along from one deadline to the next. We will probably have a lot of CRs [continuing resolution stop-gap spending bills] that keep the government funded.”
Penner of the Urban Institute also sees a contentious fall. “The best we can expect is muddling through the budget and the debt limit and getting very limited health, tax and infrastructure legislation. There is not going to be significant stimulus coming out of Washington in the foreseeable future,” he said.
Penner said a “bipartisan negotiation is badly needed” to forge even a limited fiscal 2018 spending agreement. But he’s not certain this will occur. “Even a very limited spending agreement might be an impossible dream. We may just stumble into a series of short-term CRs,” he said.
Blinder of Princeton said Republicans will likely cobble together legislation to fund the government and lift the debt ceiling so they can turn to their top priority: tax cuts.
“More than anything, Republicans want to cut taxes. They will move heaven and earth to cut taxes. What is likely to emerge from the Hill is tax cuts rather than anything that could reasonably be called reform,” Blinder said. “At the end of the rainbow, we’ll probably get tax cuts. There is no consensus on what reform looks like — or even what it means,” he cautioned, noting that his “back-of-the-envelope guess” is that Congress will pass a tax cut package between $1 trillion and $2 trillion over 10 years. “This is a large tax cut, but it will fall short of Trump’s boast of the largest tax cut in history. That might disappoint him.”
Blinder expects the tax cut package to include both business and individual tax cuts. “It’s not politically possible for Republicans to only pass corporate tax cuts. They have to do both to prevent a political revolt,” he said.
About the Author
John Shaw is a contributing writer for The Washington Diplomat.