‘Confidence in the speaker’: Kevin McCarthy defies critics with US debt ceiling win

Kevin McCarthy was in celebratory mood Wednesday night after convincing lawmakers to pass his deal with President Joe Biden to avoid US debt default.

“We set out that you have to spend less, and we’ve achieved that goal,” the Speaker of the House of Representatives told reporters at the US Capitol on Wednesday night. “Was it everything I wanted? No, but . . . I think we’ve done pretty well for the American public.

When McCarthy won the speakership of Congress’s lower house after 15 rounds of marathon voting in January, there were widespread doubts about whether he could control his slim Republican majority and wrestle leadership from the party’s staunch pro-Trump lawmakers. Can control the resistance of. Right bank.

But five months later, with the fortunes of the global economy and financial markets soaring, he won the necessary votes for a bipartisan bill to raise America’s borrowing limit, which would prevent an unprecedented default until later, while imposing new caps on government spending. 2024 election.

The McCarthy-Biden deal still needs Senate approval before it can become law, so there is still some uncertainty over the final outcome in Congress. But the House vote was always seen as the biggest hurdle and the riskiest moment for investors. Ultimately it was not even close, with 314 votes in favor and 117 against.

Doug Holtz-Eakin, a former official in the George W. Bush administration, said, “I think McCarthy has taken a relatively weak hand and played it exceptionally well.” tank.

McCarthy had to overcome fierce internal resistance on his way to securing the deal. Earlier in the week, a group of Republicans from the Freedom Caucus, the most staunch conservatives in the House, held a fiery press conference outside the Capitol, during which they rejected the agreement and suggested they oust McCarthy as speaker. can try to do.

To them, the compromise was a betrayal that did not do enough to rein in Washington’s spending or the policies Biden has introduced over the past two years.

That bitterness can remain. Republican Chip Roy of Texas warned at the event, “No matter what, there is going to be a reckoning.”

After Wednesday’s vote, Dan Bishop, a North Carolina Republican and one of McCarthy’s most vocal critics within the party, tweeted a screenshot of the tally: “This is what it looks like when the uniparty cartel sells out the American people,” he said.

In the final House vote, 71 Republicans rejected the deal while 149 voted in favor, allowing McCarthy to be able to claim that he had the support of a majority of his members.

McCarthy had already garnered substantial support among traditional liberals and the vast majority of mainstream Republicans, who tend to be conservative, pro-business, and hawkish on defense. To him, the speaker did the best he could to wrest the Democrats’ control of the White House and Senate.

Greg Murphy, another Republican House member from North Carolina, said in an interview, “We were headed for a terrible fiscal cliff (and) we put our faith in the speaker.” “While not perfect (the deal) gets a lot of Republican wins.”

The deal would keep annual household spending roughly flat for the coming fiscal year, except for the Pentagon budget and largest government pension and health care programs, and then allow it to rise by 1 percent in 2025, though specific cuts were not identified. Is. As yet.

It also includes measures to limit food assistance eligibility for adults without children to age 54 instead of 49, to reduce additional funds allocated for the Internal Revenue Service to pursue wealthy tax evaders. and cutting unspent Covid-19 relief funds. It also includes measures to expedite environmental reviews for large projects and the completion of a controversial pipeline in West Virginia.

The Congressional Budget Office said that over a decade, it would save $1.5 trillion for the government.

Even some of the most extreme House Republicans ended up favoring McCarthy’s deal, including Marjorie Taylor Greene, the pro-Trump Georgia lawmaker known for embracing conspiracy theories and election denial.

She said: “There are a lot of small businesses in my district, they don’t want financial problems. We don’t want to see our bonds get downgraded. We don’t want to see any kind of economic failure or problems with bank defaults .

Since claiming the Speaker gavel in January, McCarthy has slowly built credibility among House Republicans by successfully passing legislation in the House on key party priorities, including energy and border security, even though those bills have died in the Senate.

In April, House Republicans approved their own legislation to avert the default with drastic spending cuts. While it was also set to go nowhere in the Democratic-controlled Senate, it forced Biden to negotiate a deal the president had resisted for weeks. “[McCarthy]defined the terms of the debate,” said John Fehery, a Republican strategist at EFB Advocacy.

Eric Cantor, the former Republican House majority leader who is now managing director of investment bank, Moelis & Co., said the Biden administration was “completely caught flat-footed”.

Meanwhile, Republican Senate Leader Mitch McConnell also supported McCarthy’s position, as did the largest business lobby groups, which adopted his idea of ​​a negotiated deal rather than an unconditional debt ceiling increase by the White House.

Many Democrats accused the speaker of creating a debt ceiling crisis in order to extract concessions on fiscal policy, effectively holding the economy hostage until their demands were met. Progressives in particular were very unhappy with some of the terms of the deal.

But McCarthy still had to rely on Democratic votes to pass the compromise legislation through the House; In a tense moment on Wednesday, Democrats withheld their support until the last minute on a procedural vote that could have derailed the entire process.

In the end 165 Democrats voted in favor of the final bill – more than the number of Republicans who supported it. Democratic leader in the House Hakeem Jeffries told MSNBC that it was his party that Republicans had to “save” from their “extremism”.

Democrats gave McCarthy some credit for not appearing hostile, or overly antagonizing the president and his White House team, in the final round of negotiations.

“The speaker avoided the ridiculous and demonstrative temper tantrums that sway markets and sway a deal,” Dan Pfeiffer, former White House communications director under Barack Obama, wrote in a post Wednesday.

Patrick McHenry, one of the Republican negotiators, even suggested that McCarthy and Biden may have tied up during the talks. “You have two Irishmen who don’t drink,” he quipped.

Besides jitters about the economic and financial impact of a default, the debt ceiling standoff was the latest litmus test of whether the US political system can still function amid high levels of polarization and the influence of Donald Trump. Last month, the former president urged Republican lawmakers to allow the US to default on its debts in the absence of “massive” spending cuts that McCarthy had failed to extract from the White House.

An eleventh-hour deal to avoid a self-crisis delivered and passed by McCarthy suggested that the center of American politics still remained, although most in Washington were wary of drawing encouraging conclusions, suggesting a vicious 2024. is expected to happen. ,

Holtz-Eakin said: “We didn’t blow up the global financial system. That’s hardly a great achievement.”