Kevin McCarthy’s Complicated Win on Debt Deal

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Nobody needed a win more than House Speaker Kevin McCarthy did.

Battered by a record-setting 15 votes to gain the support he needed to become House speaker, the California Republican faced accusations of weakness and skepticism from his party’s far-right faction even before he’d taken the gavel after the GOP’s underwhelming midterm election performance last fall. The concessions made to far-right figures in the Republican Party he needed to win over only seemed to cement the idea among opponents that McCarthy was on a track to become one of the weakest speakers in the history of Congress, set to repeat the downfall of predecessors like Paul Ryan in the early days of the Trump administration.

Now nearly five months after his laborious election to the speakership, McCarthy has gotten the first win of his tenure, extracting multiple concessions from the Biden administration on a federal spending package in a high-stakes game of chicken where he threatened of allowing the United States to default on its debts if his conference failed to get what it wanted.

Late Sunday night, White House and congressional negotiators released details of a tentative deal that Biden and McCarthy made on Saturday, with steep enough terms to make the extreme wings of both parties balk.

President Joe Biden (left) and House Speaker Kevin McCarthy are seen. McCarthy and the White House announced on Sunday that they had reached a tentative deal to avert the first national default in history with terms that have rankled conservative members of McCarthy’s party.
Samuel Corum/Kevin Dietsch/Newsweek Photo Illustration/Getty Images

In exchange for a two-year extension of the debt ceiling—good enough for Biden to continue the bulk of his domestic agenda through the 2024 presidential election—Republicans got a commitment from the White House to keep federal non-defense spending flat through the next year, with a baked-in 1 percent increase the following year. McCarthy’s team also got the Biden administration to move $20 billion in planned funding for the Internal Revenue Service (IRS) to other non-defense areas.

But in McCarthy’s negotiations, Republicans also backed away from some of their conference’s largest asks. While they were able to claw back some $30 billion in unspent COVID-19 relief funds, the total was well-below what McCarthy initially wanted. Facing expanded work requirements for programs like Medicaid and Supplemental Nutrition Assistance Program (SNAP), White House negotiators were able to substantially file down the teeth of the deal with exemptions for the homeless, veterans, and for foster children—a reform White House officials regarded as a “very positive reform” after the deal was struck.

With strict limits on spending, it’s inevitable a majority of Democrats will vote against the deal, with some Republicans already critical of it.

Representative Ralph Norman, a South Carolina Republican, whose office previously told Newsweek he would vote against any deal without substantial cuts—characterized the deal as “anything but fiscal sanity,” accusing McCarthy of gutting a bill that previously had majority support.

“It’s unacceptable,” he told Fox News on Sunday.

Meanwhile, Senator Lindsey Graham, a South Carolina Republican, joined a growing chorus of Republicans dissatisfied with the lack of cuts in the deal. Meanwhile, Republican candidates who are running for president in 2024 like Florida Governor Ron DeSantis and millionaire Vivek Ramaswamy publicly stated they would vote against the agreement McCarthy and the White House had brokered if they had the option.

“Prior to this deal our country was careening toward bankruptcy, and after this deal our country will still be careening toward bankruptcy,” DeSantis told Fox News on Monday.

Ten days out from the projected date of default, Biden told reporters one week ago that he would not accept any deal that would potentially cut funding that supports hundreds of thousands of jobs in sectors like health care and education—all likely casualties his office projected from Republicans’ spending proposals.

But throughout the negotiations, McCarthy refused to move an inch. Speaking to reporters ahead of their scheduled face-to-face meeting last Monday, McCarthy ripped Democrats and the majorities’ COVID-era relief packages as the primary driver of the current debt the country was facing, which the House speaker decried as a contributing factor to the nation’s persistent levels of inflation.

“There’s a real challenge of where we’re going,” McCarthy told reporters in Washington, D.C. “So we have to spend less next year than we spend this year.”

Democrats throughout the process, however, applied pressure against McCarthy, with some progressives even urging Biden to stay the course and not relent to the Republican-led House’s demands.

Targeted by McCarthy in remarks on Fox News over his side’s policies, progressive Vermont Senator Bernie Sanders slammed House Republicans for their alleged “hypocrisy” in working to cut social services without first raising taxes on the rich, adding that they were holding the world economy hostage to protect them.

Maryland Senator Chris Van Hollen, another member of the Democratic conference, blamed the lack of a deal during the height of negotiations on McCarthy’s lack of command over the far-right members of his party, whom he was unable to back away from in order to maintain the majority necessary for other parts of his agenda.

“We have a very weak speaker in Kevin McCarthy. He does not control his caucus,” Van Hollen told ABC News last week. “He cannot take back a reasonable proposal to his conference and expect to have the votes. Especially when you have Donald Trump egging them on and saying ‘don’t give an inch, default.’ That’s what they’re saying right now.”

But facing immense pressure from his conference, McCarthy found himself fighting for a deal that was arguably well-outside of where the public stood. April polling from CBS News showed approximately 70 percent of Americans supported raising the debt ceiling if it was necessary for the U.S. to avoid default. Meanwhile, an Associated Press poll released earlier this month found Americans were more likely to approve of Biden’s handling of the situation than of congressional Republicans.

However, CNN polling conducted from May 17 to 20 also showed roughly 6 in 10 of more than 1,200 polled said they wanted any increase in the federal debt limit to be coupled with agreed-upon terms for reducing the federal budget deficit. The poll’s margin of error was 3.7 percent.

Ultimately, it was the White House who caved—a fact Republicans sought to emphasize over Memorial Day Weekend.

“No one thought [House Republicans] would be able to secure a deal that cuts spending & reduces the deficit,” Representative Nick Langworthy, a New York Republican, tweeted Sunday. “In a divided government, no deal is perfect but this is more consequential than any in recent history.”

Newsweek has reached out to McCarthy’s office via email for comment.

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