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Struggle to replace Ryan could blow up Congress budget deal

By Richard Cowan

WASHINGTON (Reuters) – A six-month budget truce stitched together by Congress in March could unravel if Republican leaders vying to replace U.S. House of Representatives Speaker Paul Ryan indulge party conservatives who want to renege on critical parts of the pact.

At issue is a resurgent move by conservative Republicans to rescind, or cut about $60 billion in non-defense domestic spending increases that were key to winning Democratic votes.

That deal also significantly raised U.S. military spending this year as demanded by Republicans.

Those seeking the cuts would need the support of Republican House leaders, such as Kevin McCarthy and Steve Scalise, both seen as potential rivals to replace Ryan as the No. 1 House Republican and – if the party retains its majority in November elections – as speaker.

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McCarthy, the House majority leader, talked up the provocative spending cuts on Thursday. In a statement, he said Republicans were “looking at other tools to cut spending” and added: “We have nothing to lose by making big changes.”

One of several Republicans who will have a say in the budding battle, McCarthy explicitly mentioned using a procedural tool known as rescissions in which President Donald Trump could team up with Republicans to kill off the non-military spending increases.

Allowing that to happen could rekindle the budget battles that consumed Congress for much of 2017 and early 2018, a scenario lawmakers had hoped the $1.3 trillion March spending bill had averted through November’s congressional elections.

Both Democrats and moderate Republicans warned against such an outcome. “Bad idea,” said Republican Representative Charlie Dent.

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“If they want to go down this path, which won’t be successful … we wouldn’t be able to pass an appropriations bill” for the fiscal year beginning on Oct. 1, he said.

More broadly, he added, trashing the spending deal would “have a chilling effect” on all sorts of future legislation.

Ryan and enough rank-and-file Republicans could link arms with Democrats to defend the spending deal enacted into law on March 23 and prevent a resumption of hostilities over the budget.

Doing so, however, could risk alienating Republican conservatives such as Representative Jim Jordan, a leading member of the right-wing House Freedom Caucus, at a politically delicate time given the looming leadership shake-up in the House and November’s elections that have Republicans struggling to persuade voters of their fiscal conservatism.

“Let’s get aggressive,” Jordan told reporters just hours after Ryan said on Wednesday that he would quit Congress at the end of 2018, setting up an internal struggle to replace him.

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Jordan urged pushing for the cuts to Democrats’ domestic priorities, along with welfare changes and tougher oversight of the Federal Bureau of Investigation, which has investigated Russia’s role in the 2016 U.S. presidential election.

Any ambitious House leader could help his or her cause by agreeing to the conservatives’ demands, in part a response to the huge deficit expansion created by the spending deal and December’s Republican tax overhaul package.

(Reporting by Richard Cowan; Editing by Kevin Drawbaugh and Peter Cooney)

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