By Moira Warburton, Katharine Jackson and Gram Slattery
WASHINGTON (Reuters) – After tough negotiations to reach an agreement in principle with the White House on the U.S. borrowing limit, the next challenge for House Speaker Kevin McCarthy is to move it to the House, where he could be opposed by both hardline Republicans and progressive Democrats. .
As Democratic and Republican negotiators work out the final details of a deal to suspend the federal government’s debt ceiling at $31.4 trillion in the coming days, McCarthy may be forced to argue behind the scenes.
A failure by Congress to settle the debt ceiling it imposed on itself by June 5 could trigger a default that would rattle financial markets and plunge the United States into a deep recession.
Republicans control the House by 222-213, while Democrats control the Senate by 51-49. These margins mean that moderates on both sides will have to support the bill, as any compromise will almost permanently lose support from the far left and far right of each party.
To win the president’s gavel, McCarthy agreed to allow any member to seek a vote to unseat him, which could lead to his ousting if he seeks to work with Democrats.
Hours before the deal was announced, some hardline Republicans balked at McCarthy cooperating with the White House.
“If Speaker’s negotiators substantially bring back a net increase in the debt ceiling…a rise so large it even shields Biden from the presidential problem…it’s war,” Rep. Dan Bishop, member, tweeted. of the Freedom Caucus.
The deal does exactly that, according to informed sources: It suspends the debt ceiling until January 2025, after the November 2024 presidential election, in exchange for spending caps and cuts to government programs.
Bishop and other hardline Republicans have sharply criticized early details of the deal that suggest Biden successfully rebuffed several cost-cutting demands on Saturday, signaling that McCarthy may struggle to win votes.
“Total surrender in progress. By the side holding the cards,” Bishop said.
Progressive Democrats in both houses have said they will not support any deal with additional work requirements. According to sources, this agreement adds work requirements to food aid for people aged 50 to 54.
The deal would increase spending on military and veterans’ care, and cap spending on many national discretionary programs, according to people familiar with the talks. But Republicans and Democrats will have to fight over which ones in the coming months, because the deal doesn’t specify them.
Republicans have rejected Biden’s proposed tax increases, and neither side has shown a willingness to undertake the fast-growing health care and retirement programs that will steeply increase debt in years to come.
Several rating agencies said they put the United States under review for a possible downgrade, which would raise borrowing costs and undermine its position as the backbone of the global financial system.
(Reporting by Moira Warburton in Washington; Editing by Heather Timmons and Kim Coghill)