Speaker Kevin McCarthy on Wednesday was on the verge of his biggest legislative win yet, with House GOP members coalescing behind his debt-limit bill, in a vote that would strengthen his position in talks with the White House.
(Bloomberg) — Speaker Kevin McCarthy on Wednesday was on the verge of his biggest legislative win yet, with House GOP members coalescing behind his debt-limit bill, in a vote that would strengthen his position in talks with the White House.
The vote on the legislation, which is bitterly opposed by President Joe Biden and congressional Democrats because it attaches sweeping spending cuts as condition for raising the debt ceiling, is scheduled for around 4:45 p.m. in Washington.
In the run-up to the vote, Biden said he would gladly sit down with McCarthy to discuss the debt limit — if the speaker takes default off the table. Failure to reach some compromise would leave the US careening toward a first-ever federal payments default, threatening economic and financial chaos.
“I’m happy to meet with McCarthy, but not on whether or not the debt limit gets extended,” Biden said during a press conference with South Korean President Yoon Suk Yeol at the White House. “That’s not negotiable.”
For Republicans, the bill’s passage would avert weeks of intra-party chaos. McCarthy had struggled for days to amass support for the bill, his first significant legislative offering as speaker. But he overcame major obstacles overnight, prompting his leadership team to begin chest-thumping over the prospect of a confrontation with Biden and the Senate’s Democratic leader, Chuck Schumer.
“It’s time for Joe Biden and Chuck Schumer to show us what they’re made of,” House Republican Whip Tom Emmer of Minnesota, the party’s third-ranking leader, said Wednesday morning.
In a preview of what is to come, the White House countered that Republicans were “selling out hard-working Americans.”
“Speaker McCarthy has cut a deal with the most extreme MAGA elements of his party,” White House Communications Director Ben LaBolt said in a statement.
To woo holdouts, McCarthy gave in to recalcitrant Midwestern lawmakers by dropping provisions in the measure that would have rolled back tax breaks for biofuels, a priority for the region’s corn and soybean farmers. He also acceded to some conservatives’ demands, teeing up a vote for as early as Wednesday.
The debt limit bill, if passed, amounts to a public party commitment to a unified list of demands, including new work requirements for safety-net programs along with overall cuts in federal spending. That sets a political benchmark for McCarthy’s performance in forthcoming talks, likely stiffening his resolve to extract concessions from Biden.
Conversely, failure to show Republicans can muster a House majority vote in favor of their demands would signal disarray and weakness.
Schumer, speaking on the Senate floor, said McCarthy’s legislation “brings us closer” to a US default.
While Biden has so far declared he won’t negotiate with US creditworthiness as “hostage” and insisted House Republicans pass a full budget before any talks, several key Democratic lawmakers are already publicly pressuring the White House to come to the table if a debt limit measure clears the chamber.
The Treasury is due to soon release a new estimate of when they think the department will be at risk of default without raising the the federal borrowing limit. Analysts expect that date to be roughly around late July but have warned that sluggish tax returns could move up the deadline to early June.
The last major fight over honoring US government debt, in 2011, triggered a downgrade of the nation’s credit rating and a stock market slide even though a default was averted.
McCarthy told reporters Wednesday he was now confident the bill would pass later in the day even as some Republicans such as Nancy Mace of South Carolina, Andy Biggs of Arizona and Tim Burchett of Tennessee clamored for deeper cuts. Mace said Wednesday afternoon she would support the bill after meeting with McCarthy in his office.
New Provisions
To balance the loss of savings from the compromise preserving the biofuel tax credits contained in the Biden-backed climate legislation Congress passed last year, the bill would cancel some other funding from the law.
The amendment also sets new work requirements for Temporary Assistance for Needy Families recipients so that they take effect in 2024, and moves up the end of food stamp work requirement waivers to 2024, demands of Representative Matt Gaetz of Florida and other conservatives who have threatened to vote “no.” The legislation also raises the work requirement cutoff age from 50 to 56, effective immediately.
The amendment also contains language clarifying that one of the goals of the food stamps program is to increase work by participants.
Credits for carbon oxide sequestration and incentives for biodiesel, renewable diesel, alternative fuels and second generation biofuel would be fully restored. A sustainable aviation fuel credit and the clean fuel production credit would be allowed for investments made between August 2022 and April 19, 2023.
The approach would effectively grandfather in some sustainable aviation fuel ventures announced in the wake of the Inflation Reduction Act. Beneficiaries are likely to include Gevo Inc., World Energy, Valero Energy Corp., Darling Ingredients Inc., and other producers that inked contracts and started building facilities after the law was enacted.
–With assistance from Jennifer A. Dlouhy, Laura Litvan, Josh Wingrove and Jordan Fabian.
(Updates with Biden comments and vote timing starting with second paragraph. An earlier version corrected the specifics of the changes in the bill on funding cancellations and deadline changes.)
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