On Monday, McCarthy announced the GOP-led US House of Representatives would seek to pass a bill raising the debt ceiling but including steep budget cuts he has demanded in negotiations with the White House. However, after a closed-door meeting with GOP leaders on Tuesday, the road to passage seems harder than anticipated as McCarthy’s fellow party members are demanding more from the unique moment.
"This is the single biggest point of leverage that will exist in these two years," one Republican lawmaker told US media on Tuesday.
Several others who spoke with US media indicated they felt the bill “should go further,” that they were “in favor of very aggressive cuts” and “really want to see some real restraints and fiscal cuts, not just promises.”
US Rep. Andrew Biggs (R-AZ), a former chair of the party’s right-wing Freedom Caucus who recently challenged McCarthy for the speakership, said McCarthy’s proposed cuts were a “long ways away” from demands McCarthy made just weeks ago in negotiations with the administration of US President Joe Biden, a Democrat.
With a majority of just four votes in the lower chamber, a handful of dissenting Republicans could gum up the works for McCarthy. Regardless, such a deal is unlikely to make it through the Senate, where both the GOP and Democrats have a minority, but the handful of Independent lawmakers all tend to vote with the Democrats.
In a letter to Biden sent in late March, McCarthy called for returning domestic spending to pre-pandemic levels - a dramatic budget cut he has claimed would generate more than $4 trillion in savings, mostly through cuts to social programs, although his office has not provided details on how that number was arrived at.
Rep. Scott Perry (R-PA), the Freedom Caucus’ present chair, voiced a similar concern on Tuesday about the new bill. “I don’t know what’s in the package completely. That’s the issue,” he told US media.
According to McCarthy, the bill will seek to establish 2024 spending levels equivalent to the 2022 budget, and limit budget growth over the next decade to 1% per year.
The debt ceiling has been stalled at $31.4 trillion since mid-January, when the Republican-controlled House declined to pass a new bill lifting the spending limit, saying they would only vote a new bill through if it included deep spending cuts. So far, Democrats have rejected the GOP’s requests for negotiation, saying the debt ceiling should be raised without fanfare as a necessary function of governance.
“Without exaggeration, American debt is a ticking time bomb that will detonate unless we take serious, responsible action. Yet how has President Biden reacted to this issue? He has done nothing,” McCarthy said on Monday. “Debt limit negotiations are an opportunity to examine our nation’s finances.”
The danger posed by exceeding the debt ceiling is severe: the Treasury estimates that by midsummer, it will have exhausted its “extraordinary measures” adopted in January and the government will default on its debt, triggering an economic crisis.
Only by passing a new bill raising the debt ceiling can Congress appropriate new funds to keep paying the country’s bills.