Debt limit deal on verge of passing House, Freedom Caucus weighs retaliation against McCarthy

House Speaker Kevin McCarthy on Wednesday was poised to beat back a conservative revolt and opposition from progressive Democrats to pass his deal with President Biden to allow the government to surpass its $31.4 trillion debt limit.  

Mr. McCarthy, California Republican, secured the support of 52 House Democrats on a test vote that advanced the package toward passage. The bill was expected to pass late Wednesday night, sending it to the upper chamber where senators were busy working on a deal to fast-track final passage before a Monday deadline when the U.S. government would not be able to pay all its obligations unless it gets an extended credit line.

Both Mr. McCarthy and House Minority Leader Hakeem Jeffries expressed confidence that there were ample votes to overcome defections from the left and right.

“I made clear that I’m gonna support the legislation that is on the floor today and that I support it without hesitation, reservation or trepidation,” said Mr. Jeffries, New York Democrat. “We will avoid a default.” 

The hardline House Freedom Caucus has made a concerted effort to derail the bill, labeling it a “watered-down betrayal” of conservative principles.

Freedom Caucus members have also threatened to stage a coup against Mr. McCarthy because of the deal.

“At best we have a two-year spending freeze that’s full of loopholes and gimmicks that would allow for increased funding for the federal bureaucracy in order to achieve a $4 trillion increase in the debt [limit],” said Rep. Chip Roy, Texas Republican.

Conservative hardliners are not the only ones opposed to the deal. Some moderate Republicans also say the bill is a far call from the debt limit proposal passed by House Republicans last month. 

“It simply does not live up to the expectations we set and I cannot in good conscience vote for it,” said Rep. Jeff Van Drew, a New Jersey Republican who switched parties amid disillusion with the leftward shift of the Democratic Party.   

On the left, the deal is vigorously opposed by members of the Congressional Progressive Caucus. 

“I think Republicans need to own this vote. This was their deal, this was their negotiation,” said Rep. Alexandria Ocasio-Cortez, New York Democrat. “They’re the ones trying to come in and cut [food stamps]. They’re trying to come in and cut environmental protections. They’re trying to ram through an oil pipeline through a community that does not want it.”

The agreement would raise the $31.4 trillion debt limit until after the 2024 presidential election. It would also claw back billions of dollars in unspent pandemic relief and cut IRS funding by more than $20 billion over two years.  

Mr. Biden secured a win by keeping domestic spending flat for the upcoming fiscal year in the face of GOP calls for at least $130 billion in immediate cuts. Both sides found bipartisan agreement on boosting defense spending by more than $26 billion. 

Republicans scored a victory by forcing Mr. Biden to agree to cap the growth of federal spending at 1% next year. 

“This House Republican win rescinds $28 billion in unobligated covid funds. It cuts over $2 trillion in government spending. It reins in the executive branch,” said Rep. Guy Reschenthaler, Pennsylvania Republican. “And it rejects the president’s extreme $5 trillion in proposed tax increases.” 

The agreement further expands work requirements for recipients of food stamps and direct cash payments until 2030. Able-bodied, childless recipients of each program 54 and younger would have to work at least 20 hours per week to keep their benefits. 

Under the deal, childless food stamp recipients would be subject to new restrictions for how long they can collect the benefits. The deal excludes veterans and the homeless from the work requirements while expanding their food stamps benefits.

While the new restrictions will save taxpayer money, the expanded benefits for veterans and the homeless will actually cause overall spending for food stamps to increase. The Congressional Budget Office estimates the changes will cost taxpayers an additional $2.1 billion over the next decade. 

“We have watered-down work requirements that CBO said will actually increase the cost of snap by $2 billion,” said Mr. Roy. 

Despite that reality, progressive Democrats say the new work requirements are still too onerous for working people. 

“While this agreement exempts [food stamp] work requirements for some vulnerable communities, it expands work requirements for others,” said Rep. Cori Bush, a Missouri Democrat opposed to the deal. “Pitting our most vulnerable communities against each other is policy violence. There should be no trade-off when it comes to ensuring people have food.

Apart from expanding work requirements, the deal also institutes a pay-as-you-go provision requiring Mr. Biden to offset rules or regulations that increase federal spending. 

Mr. McCarthy has hailed the inclusion a win, but GOP critics note that legislation also allows the White House to waive it if necessary for efficiency. The bill further states that OMB’s waiver cannot be challenged by the courts.

“The OMB director has sole waiver authority to spend if it’s ‘necessary for program delivery.’ So that one line wipes out PAYGO,” Rep. Nancy Mace, South Carolina Republican. “These words on paper are totally meaningless if you read the fine print.”

House Republicans initially sought a $130 billion cut to non-defense spending this year and a decade’s worth of spending caps. They also wanted to cancel Mr. Biden‘s student-loan forgiveness program and rescind more than $200 billion in green energy tax credits that Democrats passed last year

Mr. McCarthy has already pledged the debt limit deal is only a precursor to a fight over budget cuts as Congress begins to assembly this fall’s government funding bill. 

“I’m not going to give up on the American people, and this isn’t the end,” said Mr. McCarthy, California Republican. “This doesn’t solve all the problems. This is the first step.”

The promise of a bigger fight is problematic, however. Within the debt limit, Mr. McCarthy and Mr. Biden tucked in a provision ensuring a 1% spending cut across the government if Congress does not adopt a funding bill by January 1, 2024. 

A government funding battle is not the only looming threat to Mr. McCarthy’s leadership. Conservative hardliners within the Freedom Caucus are weighing a maneuver to oust the speaker over the debt limit deal.

The Freedom Caucus nearly tanked Mr. McCarthy’s speakership bid this year. In exchange for allowing Mr. McCarthy’s ascension, the group pushed through a rules package that decentralized the power of congressional leadership.

The new rules include a provision empowering any single lawmaker to force a vote on ejecting the speaker, known in Congress-speak as a motion to vacate the chair.

“After this vote, we will have discussions about whether there should be a motion to vacate or not,” Rep. Ken Buck, Colorado Republican, said during a CNN appearance.  

Source: WT