© Reuters. US House Speaker Kevin McCarthy (R-Calif.) leaves after reaching a tentative agreement with President Joe Biden to raise the US debt ceiling and avoid a catastrophic default, at the US Capitol in Washington, May 27, 2023. REUTERS/Nathan Hoare
Written by Moira Warburton, Kathryn Jackson, and Gram Slattery
WASHINGTON (Reuters) – After arduous negotiations to reach a tentative agreement with the White House on a U.S. borrowing limit, House Speaker Kevin McCarthy’s next challenge is to push it into the House, where both hardline Republicans and progressive Democrats might oppose it. .
As Democratic and Republican negotiators work out the final details of a deal to suspend the federal government’s $31.4 trillion debt ceiling in the coming days, McCarthy may have to do some behind-the-scenes arguing.
Congress’ failure to deal with its self-imposed debt ceiling before June 5 could trigger a default that would shake financial markets and tip the US into a deep recession.
Republicans control the House of Representatives by 222-213, while Democrats control the Senate by 51-49. These margins mean that moderates on both sides will have to support the bill, as any compromise would almost certainly lose the support of each party’s far left and right wings.
To win the speaker’s gavel, McCarthy agreed to enable any single member to call for a vote to oust him, which could lead to his ouster if he sought to work with the Democrats.
Hours before the deal was announced, some hardline Republicans had rejected McCarthy’s cooperation with the White House.
“If speaker negotiators bring back to substance a clean increase in the debt limit…an increase so large that it shields Biden from the issue in the presidency…, it’s war,” Freedom Caucus member Dan Bishop wrote on Twitter.
The deal does just that, sources familiar with it say: It suspends the debt ceiling through January 2025, after the November 2024 presidential election, in exchange for spending caps and cuts to government programs.
Details of the early deal that suggested Biden successfully rolled back several cost-cutting demands Saturday were fiercely criticized by Bishop and other hard-line Republicans, suggesting McCarthy may have trouble getting votes.
“Absolute surrender is in progress. From the side that holds the cards,” Bishop said.
Progressive Democrats in both chambers said they would not support any deal that has additional labor requirements. Sources say this deal adds work requirements to food aid for people ages 50 to 54.
According to sources familiar with the talks, the agreement would boost spending on military and veterans’ welfare, and cap several discretionary domestic programs. But Republicans and Democrats will need to fight over which one in the coming months, because the deal doesn’t define them.
Republicans have rejected Biden’s proposed tax increases, and neither side has shown a willingness to take on fast-growing health and retirement programs that will cause debt to grow sharply in the coming years.
Several credit rating agencies said they were placing the United States under review for a possible downgrade of its rating, which would raise borrowing costs and undermine its position as the backbone of the global financial system.