House Republican leadership on Tuesday downplayed the potential for billions of dollars in defense spending cuts as part of a reported plan to limit discretionary spending for fiscal year 2024, while Democrats’ top appropriator said the move could set a course for a “guaranteed [government] shutdown.”

The back-and-forth remarks on potential budget cuts were in response to whether House Speaker Kevin McCarthy (R-Calif.) cut a deal to limit FY ‘24 discretionary spending at FY ‘22 enacted funding levels to secure votes for his speakership bid.

House Majority Leader Steve Scalise (R-La.) answers questions during a GOP leadership press conference on Jan. 10, 2023. Photo: Screenshot of livestream.

“No, and in fact we haven’t talked about reducing defense spending. We’ve talked about bringing accountability to government. A government has needed accountability for a long time and we’ve seen none of that over the last two years,” Rep. Steve Scalise (R-La.), the House majority leader, said during a press conference on Tuesday. “We’re going to talk about accountability on spending in every federal agency. And if there’s waste, fraud and abuse in any agency it’s got to be rooted out. So that’s what we’ve been talking about, how to aggressively root out waste, fraud and abuse with taxpayer dollars.”

A slide shown during a closed-door GOP Conference meeting on Tuesday morning, a photo of which was obtained by CNN, detailed House Republicans’ budget priorities for the new Congress, to include capping FY ‘24 discretionary spending at FY ‘22 levels “or lower.”

The slide also called for rejecting “any negotiations with [the] Senate unless their Approps Bills are passed, complies with House Budget [Resolution], and reduce non-defense discretionary [spending].”

The budget resolution priorities outlined in the GOP Conference meeting are not officially part of the House rules package that the lower chamber passed with a 211 to 205 vote on Monday evening.

“Republicans are making side agreements, handshake deals, that not only contradict their calls for transparency but also attempt to short circuit the [fiscal year] 2024 government funding process before it even gets started,” Rep. Rosa DeLauro (D-Conn.), the top Democrat on the House Appropriations Committee, said during a press conference on Tuesday. “I think this notion that you can deal with [FY] 2022 [spending] levels, that appears to have been part of this secret deal, then you may be looking at a guaranteed [government] shutdown.”

DeLauro said enacting such a spending cap would result in a $130 billion cut to all discretionary spending, across both defense and non-defense.

While Congress passed an $858 billion define budget for FY ‘23, to include a $45 billion increase over the president’s budget request, the spending cap agreement could amount to a $75 billion cut if reverted back to FY ‘22 enacted levels.

“[Republicans] are going to slash what are critical investments. And as I said, it’s defense, national security, military readiness and our combat capability,” DeLauro said.

Byron Callan, of Capital Alpha Partners, in a note last Friday said he sees a “very low probability” of such a defense cut occurring, adding he believes there’s a 10 percent chance FY ‘24 funding is enacted at FY ‘22 spending levels.

The Cowen Washington Research Group added they also believe such spending level caps, resulting in a $75 billion cut to defense, are also unlikely. 

“While we do not doubt there are spending discussions as part of talks, we see an FY22-level cap as unlikely. We think GOP defense hawks would revolt. We also do not think Dems (Biden/Sen.) would support,” the Cowen Washington Research Group wrote in a note on the reported budget talks.