President Biden and House Speaker Kevin McCarthy have reached an agreement in principle to raise the…
President Biden and House Speaker Kevin McCarthy have reached an agreement in principle to raise the nation's debt ceiling and avoid a potentially disastrous government default.[0] The agreement includes a debt ceiling extension through 2025 and some spending cuts, expected to cut federal spending by about $650 billion over the next decade.[1] However, the bill's text faces an uphill battle in Congress as both Democrats and Republicans have voiced criticism about the deal reached.[2] McCarthy's room for error is slim, with only a five-vote margin that he can risk losing in any potential agreement on the debt limit.[3] This implies that he requires the backing of a minimum number of House Democrats to ensure approval.[3]
The deal is expected to cut $10 billion from an $80-billion overhaul of the Internal Revenue Service approved last fall, claw back some unspent COVID-19 pandemic funds, and yank back billions of dollars in unspent Covid relief.[1] The agreement does codify into law the Biden administration's plan to end the ongoing freeze on monthly student loan payments and interest at the end of the summer.[4] The budget agreement would hike the debt limit through January 2025, teeing up another potential standoff over the nation's borrowing cap in the months after the presidential election.[4]
However, McCarthy's challenges stem from a simple reality: a crucial segment of the Republican Conference, somewhere between two to three dozen lawmakers, will simply not support anything less than the Limit, Save, Grow Act that passed the House last month.[3] These members have staked their political reputations on not caving to Democrats and won't retreat from their position.[3] What's more, if they come to feel the speaker gave too much on a compromise they were never going to support in the first place, McCarthy could face a rebellion from the ultraconservative wing of his own party.[3] If that were to occur, his tenure as speaker could come to an end mere months after its commencement.[3]
McCarthy plans to put the measure to a vote in the House chamber as early as next Wednesday, but it remains unclear if McCarthy will have the votes he needs, or face a revolt from the more extreme members of the GOP caucus, who are demanding much steeper budget cuts.[5] Some Republicans have already disputed McCarthy's claim that a majority of the conference is “very excited” about the deal.[4] Rep. Chip Roy, R-Texas, a member of the conservative House Freedom Caucus, said online after the call with McCarthy, “I do not like the ‘deal' as I understand it from the cheerleading so far… I will have more to follow once I see more details.”[6]
The bad news is that, despite the deal between McCarthy and Biden, the drama is far from over: McCarthy's grip on the GOP members of the House is notoriously weak. The House is scheduled to vote on the deal Wednesday, leaving us waiting for Biden and McCarthy to find the perfect balance in a deal that allows both parties to claim victory, but not so loudly that McCarthy's speakership is put in jeopardy or that Biden is seen as giving in to the hostage-takers. Janet Yellen, the Treasury Secretary, has given multiple warnings that if Congress does not increase the debt ceiling, the Treasury may be unable to pay its bills starting from June 1.[7]
0. “McCarthy and Biden's debt ceiling plan faces a big test” Axios, 28 May. 2023, https://www.axios.com/2023/05/28/mccarthy-biden-big-debt-ceiling-test
1. “Here's What's in the McCarthy-Biden Deal on the Debt Ceiling – Mother Jones” Mother Jones, 28 May. 2023, https://www.motherjones.com/politics/2023/05/mccarthy-biden-debt-ceiling-deal-details/
2. “McCarthy on debt deal: Jeffries says there’s ‘not one thing in the bill for Democrats’” The Hill, 28 May. 2023, https://thehill.com/homenews/house/4024182-mccarthy-jeffries-says-theres-not-one-thing-in-the-bill-for-democrats/
3. “Kevin McCarthy's Hardest Job Will Be Selling a Debt-Limit Deal to Conservatives” Barron's, 25 May. 2023, https://www.barrons.com/articles/debt-ceiling-mccarthy-congress-compromise-79f609ce
4. “McCarthy races to sell debt deal amid rumblings of far-right rebellion” POLITICO, 28 May. 2023, https://www.politico.com/news/2023/05/28/mccarthy-debt-right-wing-rebellion-00099114
5. “Debt ceiling deal reached in principle by Biden and McCarthy to avoid default” NPR, 28 May. 2023, https://www.npr.org/2023/05/27/1177688226/debt-ceiling-deal-biden-mccarthy-latest
6. “Debt ceiling agreement in principle reached between Democrats, Republicans” Fox News, 28 May. 2023, https://www.foxnews.com/politics/biden-mccarthy-meeting-debt-ceiling-progress-was-made
7. “What is 14th Amendment and can it resolve US debt ceiling fight?” Al Jazeera English, 25 May. 2023, https://www.aljazeera.com/economy/2023/5/25/what-is-the-14th-amendment-and-can-it-resolve-us-debt-cap-fight
