(Bloomberg) -- House Speaker Kevin McCarthy expressed confidence Sunday that Congress would pass the debt-limit deal he negotiated with President Joe Biden, calling it a “transformational” move to rein in spending that a majority of Republicans would support.
He rejected as “crazy” a scenario in which the House fails to pass the measure, claiming 95% of his party’s lawmakers are “excited” by the deal. Yet he acknowledged the agreement is likely to face some opposition from Republicans.
“We know anytime we sit and negotiate with two parties, that you got to work with both sides of the aisle. So it’s not 100% of what everybody wants, but when you look the country is going to be stronger,” McCarthy said in a Sunday morning press conference at the Capitol.
Asked if he was worried about a possible effort by hard-line conservative lawmakers to oust him from the speaker’s chair, McCarthy responded: “Not at all.”
McCarthy urged lawmakers to reserve judgment until they see the legislative text of the bill, which should be released Sunday — giving the representatives the promised 72 hours to read it before voting as early as Wednesday.
Biden and McCarthy plan to talk Sunday afternoon, and negotiators from both parties plan to brief their members on the deal in separate calls later in the day. Biden was traveling in Delaware on Sunday for his granddaughter’s high-school graduation.
Biden and McCarthy sealed their bargain during a 90-minute phone call late Saturday. Now they must shepherd the deal through Congress over the objections of hard-liners in both parties before the government runs out of borrowing capacity in about a week.
Read more: Traders Gear Up to Embrace Riskier Assets After Debt-Cap Deal
Arguing for the merits of the deal, McCarthy cited provisions taking back previously approved spending, calling them “the largest rescission in American history.” He also highlighted increased work requirements.
The deal cuts the Internal Revenue Service’s budget by $1.9 billion, the speaker said, less than the $80 billion cut in IRS funding that many GOP lawmakers had sought.
Read more: Debt Deal Adds Brake on US Economy Already at Risk of Recession
While the agreement would not affect the Biden administration’s student-loan forgiveness, which is being litigated in the courts, it would end the pandemic-era moratorium on repayments. “The pause is gone within 60 days of this being signed,” McCarthy told “Fox News Sunday.”
Representative Garret Graves, one of the Republican negotiators, said the deal would also streamline permitting for energy projects — although a complete overhaul of the 54-year-old National Environmental Policy Act would be dealt with separately.
Spending Levels
The bill creates a $1.64 trillion discretionary cap for fiscal 2024, a cut on paper of $60 billion from the $1.7 trillion spending level currently, according to a White House fact sheet.
That factors in a 3% increase in defense from $858 billion to $886 billion and a 12% cut to domestic programs from $722 billion to $637 billion. The White House said there are accounting moves that can, in the forthcoming appropriations bill, erase this cut.
As McCarthy acknowledged the deal maybe “doesn’t do everything for everyone,” critics in both parties were quick to attack it.
Some Republican House members stepped up threats to try to undercut the accord. Representative Chip Roy of Texas, a member of the hard-line conservative House Freedom Caucus, questioned McCarthy’s suggestion that 95% of the caucus is ready to go along with the deal.
Responding to a demand by a Twitter poster to stop the bill in the House, Roy said, “We’re going to try.”
‘Fake’ Cuts
Some Senate Republicans chimed in. “Fake conservatives agree to fake spending cuts,” Senator Rand Paul of Kentucky tweeted.
Representative Pramila Jayapal, chairwoman of the roughly 100-member Progressive caucus, said she hasn’t decided whether to support the bill. She said Biden and House Democratic leader Hakeem Jeffries should be concerned about whether they can deliver votes from the party’s left flank.
“Yes, they have to worry. Yes,” she said on CNN’s “State of the Union.”
It’s “not a bill that’s going to make any Democrats happy,” Representative Jim Himes, a Democrat from Connecticut who isn’t a member of the Progressive caucus, said on “Fox News Sunday.”
There’s little margin for error or delay. Treasury Secretary Janet Yellen warned Friday that the debt-limit must be extended by June 5 to avoid a historic default.
--With assistance from Erik Wasson and Victoria Cavaliere.
(Updates with White House summary of spending levels in 12th paragraph, reaction from critics starting in 15th.)
©2023 Bloomberg L.P.
Advertisement