McCarthy threatened with GOP rebellion over rumored debt-limit deal with Biden
House Republicans left Washington on Thursday without a deal on the debt limit and with a brewing revolt against Speaker Kevin McCarthy because of a rumored compromise with President Biden.
Ultra-conservative lawmakers are up in arms over alleged details of a compromise that leaked out of the negotiations. Rep. Tim Burchett shared with fellow members of the House Freedom Caucus a document purporting to detail a list of spending compromises agreed to by negotiators.
“We’ve heard rumors that there may be some sort of a deal that would be less than desirable to a majority of Republicans,” said Rep. Bob Good, Virginia Republican.
Mr. McCarthy’s negotiating team said the document was not authentic. They said nothing has been agreed to yet.
The document outlines a potential deal to lift the debt ceiling until after the 2024 election while clawing back unspent coronavirus relief. It also incentivizes congressional leaders to start negotiating budget cuts through appropriations. The size of the cuts and the fate of expanded work requirements are still being negotiated.
Freedom Caucus members said that lifting the debt limit until after the election is a non-starter. The group is backing only a hike until May 2024 in hopes of extracting further concessions from Mr. Biden next year.
The White House fiercely opposes setting up another debt limit showdown next year at the height of the presidential race.
Mr. Burchett, Tennesse Republican, has not disclosed where the document came from. Several lawmakers confirmed seeing it and said they believed it originated from House GOP leaders.
Rep. Patrick McHenry, a North Carolina Republican on the negotiating team said some of the details of the nascent deal are “rumors.”
“That’s what happens with all these legislative negotiations. … Everybody’s trying to get a little nuance of the story. But nothing’s done until you have a complete agreement,” he said.
Rightwing hardliners do not buy the denial. The Freedom Caucus’ 35 members sent Mr. McCarthy a letter on Thursday demanding the cessation of negotiations. They want everything from the debt limit bill passed by the House last month plus several new concessions from the White House.
Mr. McCarthy has long said that the GOP’s debt limit bill was only an initial offer meant to kickstart negotiations with the White House.
“When have I ever said you have to agree to 100% of what I want? All I’ve ever said to the president is … I will not raise taxes [and] I will not put a clean debt ceiling on the floor,” said Mr. McCarthy. “But everything else is on the table.”
Congress headed home for the Memorial Day break scheduled to last until after June 1, when the U.S. government is expected to run out of money to pay all its bills unless the $31.4 trillion debt limit is raised.
Lawmakers could be called back to Washington at any time to vote on a debt limit deal. Mr. McCarthy has promised to give lawmakers 72 hours to review the legislation.
Apart from wanting the final deal to look like the debt limit bill passed by House Republicans last month, the Freedom Caucus wants Mr. McCarthy to push for defunding the new FBI headquarters and spend more money on border security.
The hardliners also want the house to pass legislation extending the debt limit by one month to give Mr. McCarthy more time to pressure the White House into accepting all of the GOP’s debt limit demands. They say the short-term extension should include provisions repealing $80 billion in new IRS agents and the return of unspent COVID-19 relief.
“The only hope for transformative change in Washington comes from a unified House Republican Conference,” the lawmakers wrote. “You have that. We are behind you. Use our unity to make history.”
The Freedom Caucus nearly tanked Mr. McCarthy’s speakership bid this year. In exchange for allowing Mr. McCarthy’s ascension, they pushed through a rules package that hobbled some of the speaker’s power.
The new rules included a provision allowing any lawmaker to force a vote to remove the speaker. Mr. McCarthy’s potential ouster is the threat underlining the Freedom Caucuses’ position on the debt limit.
“The power of an undivided Republican Party guided by conservative principles cannot be overstated,” the letter said. “As you navigate the debt limit debate, you are the steward of this unity and will determine whether it continues to strengthen and places a historic stamp on this Congress or evaporates.”
Freedom Caucus members said displeasure with the talks has been mounting for days. They said GOP leaders have not done enough to brief lawmakers on the state of the negotiations, forcing them to rely on media reports for information.
They also are not happy that they hear is likely to be excluded from the debt limit bill.
That bill cut federal spending by $130 billion for the upcoming fiscal year and limits budget growth to 1% annually over the next decade. It also rescinds unspent pandemic relief, cancels Mr. Biden’s student loan forgiveness program, and scraps $200 billion in green energy tax credits passed by Democrats last year.
Beyond slashing spending, the legislation overhauls the nation’s energy-permitting laws, imposes work requirements on social welfare programs, and requires congressional approval for any new regulations with an economic impact of more than $100 million per year.
Some of those provisions were sidelined in negotiations because of White House opposition. For instance, Mr. Biden has ruled out clawing back green energy tax credits and expanding work requirements on Medicaid and food stamps.
Canceling Mr. Biden’s student loan forgiveness program also was dropped, though Republicans are hopeful the Supreme Court will rule the scheme unconstitutional.
Rep. Chip Roy expressed deep frustration with the state of the talks. He said Mr. McCarthy appeared ready to take the “first off-ramp” offered by the White House.
“Republicans should be ashamed if we walk away. Which is what they’re about to do, cutting a deal that undermines the American people,” said Mr. Roy, Texas Republican.
Mr. Biden said on Thursday that talks are “making progress” and both sides were committed to averting a default.
“The American people deserve to know that their Social Security payments will be there, the Veterans Hospitals will remain open, and that economic progress will be made,” said Mr. Biden. “Default puts all that at risk. Congressional leaders understand that they’ve all agreed there will be no default.”