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Republican leaders try to quell debt deal revolt as US counts down to default

Republican House Speaker Kevin McCarthy on Sunday was trying to contain a revolt from rightwing lawmakers opposed to his debt agreement with President Joe Biden, as both sides moved to sell their parties on a deal to prevent a looming US default.

McCarthy defended the pact ahead of a high-stakes vote expected on Wednesday in the lower chamber of Congress, leaving just days before the US is predicted to run out of cash to pay all its bills on June 5.

Some rank-and-file Republicans are fuming at the agreement, saying it severely waters down the party’s initial demands in exchange for a rise in the debt limit.

Much of the resistance comes from the staunchly rightwing Freedom Caucus, which includes many allies of former president Donald Trump and lawmakers who opposed McCarthy’s campaign to be Speaker at the start of the year.

“This ‘deal’ is insanity,” Ralph Norman, the South Carolina Republican, said in a tweet. “Not gonna vote to bankrupt our country. The American people deserve better.”

Still, McCarthy predicted he would earn the support of enough members of his own party for the agreement, saying “95 per cent” of Republican members were “very excited” about the deal. He also expected the support of some Democrats as well.

“Maybe it doesn’t do everything for everyone. But this is a step in the right direction that no one thought we would be at today,” McCarthy told Fox News Sunday. “This is a good bill for the American public.”

Failure to pass the legislation could trigger turmoil in financial markets because it would send the US hurtling towards the “X-date” on June 5, when the Treasury is expected to run out of cash to pay all its bills.

Even if some Republican defections are expected, McCarthy needs to stop the backlash from spreading in a way that would jeopardise the vote or lead to an effort to unseat him as Speaker.

McCarthy had promised to give lawmakers at least 72 hours to consider any legislation, which means the uncertainty and debate over the fate of the debt ceiling bill will last for the next three days.

“This is worthy of the American people. I want them to read it. I want them to understand it,” McCarthy said.

The agreement raises the debt ceiling until 2025, and sets caps on non-defence spending for the next two fiscal years, while allowing the Pentagon budget to grow as planned by Biden.

It also adds new work requirements to some social safety net programmes, speeds up environmental reviews for big projects and rolls back part of a funding boost to the Internal Revenue Service so it can more aggressively scrutinise wealthy Americans and big businesses.

But Republican efforts to force much deeper spending cuts for a longer period of time, as well as slashing Biden’s flagship economic legislation of the past two years, including clean energy tax credits, were rejected by the White House.

As McCarthy sought to rally his lawmakers to support the deal, White House officials also tried to convince as many Democrats as they could to back the deal.

House Democrats were due to hold a briefing at 5pm on Sunday with White House officials.

Some Democratic lawmakers have also complained that Biden conceded too much in the talks, without getting much in return.

“None of the things in the bill are Democrat priorities,” Jim Himes, a Connecticut Democrat, told Fox News Sunday.