Thursday, July 18, 2024
HomeFinanceRepublicans criticize McCarthy, Biden debt ceiling deal

Republicans criticize McCarthy, Biden debt ceiling deal

U.S. Representative Chip Roy (R-TX) speaks to members of the media as he leaves a House Republican Caucus candidates forum for the running of GOP conference chair, the third ranking leadership position, on Capitol Hill in Washington, U.S., May 13, 2021.

Evelyn Hockstein | Reuters

After tough negotiations to reach a tentative deal with the White House on the U.S. borrowing limit, the next challenge for House Speaker Kevin McCarthy is pushing it through the House, where hardline Republicans are already threatening to sink it.

As Democratic and Republican negotiators iron out the final details of an agreement to suspend the federal government’s $31.4 trillion debt ceiling in coming days, McCarthy may be forced to do some behind-the-scenes wrangling.

“We’re going to try” to stop it from passing the House, Representative Chip Roy, a prominent member of the hardline House Freedom Caucus, said on Twitter. House and Senate Republicans were critical of the deal’s time frame and emerging terms.

A failure by Congress to deal with its self-imposed debt ceiling before June 5 could trigger a default that would shake financial markets and send the United States into a deep recession.

Republicans control the House 222-213, while Democrats control the Senate 51-49. These margins mean that moderates from both sides will have to support the bill, as any compromise will almost definitely lose the support of the far left and far right wings of each party.

To win the speaker’s gavel, McCarthy agreed to enable any single member to call for a vote to unseat him, which could lead to his ouster if he seeks to work with Democrats.

Roy complained on Twitter on Sunday that the agreement would leave intact an expansion of the tax-collecting Internal Revenue Service set in place when Democrats controlled both chambers of Congress.

Senator Lindsey Graham also expressed concern about the deal’s potential effect on U.S. defense and Washington’s support for Ukraine.

“Do not intend to default on debt, but will not support a deal that reduces the size of the Navy and prevents continued technological and weapons assistance to Ukraine,” Graham tweeted.

“Punting at your opponent’s one-yard line isn’t a winning strategy,” Republican Senator Mike Lee said on Twitter.

The deal suspends the debt ceiling until January 2025, after the November 2024 presidential election, in exchange for caps on spending and cuts in government programs.

Representative Dan Bishop and other hardline Republicans were sharply critical of early deal details that suggest Biden has pushed back successfully on several cost-cutting demands on Saturday, signaling that McCarthy may have an issue getting votes.

“Utter capitulation in progress. By the side holding the cards,” Bishop said.

Progressive Democrats in both chambers have said they would not support any deal that has additional work requirements. This deal does, sources say, adding work requirements to food aid for people aged 50 to 54.

The deal would boost spending on the military and veterans’ care, and cap it for many discretionary domestic programs, according to sources familiar with the talks. But Republicans and Democrats will need to battle over which ones in the months to come, as the deal doesn’t specify them.

Republicans have rejected Biden’s proposed tax increases, and neither side has shown a willingness to take on the fast-growing health and retirement programs that will drive up debt sharply in the coming years.

Several credit-rating agencies have put the United States on review for a possible downgrade, which would push up borrowing costs and undercut its standing as the backbone of the global financial system.

This story originally appeared on CNBC

- Advertisment -

Most Popular

Recent Comments