Debt deal clears first hurdle but faces uncertainty in hands of full House, Senate

Democrats had sought a clean increase to the spending limit while McCarthy, who faced intense pressure from within his caucus to seek budgetary concessions, had hoped to pair any increase with spending caps to address the mounting national debt.

Published: May 30, 2023 11:26pm

The House Rules Committee on Wednesday night approved a measure to temporarily suspend the federal debt limit and impose discretionary spending caps and set up a final House vote – though the future of the package remains uncertain in the lower chamber – then a vote in the Senate.

Despite opposition from some of the committee's conservative lawmakers, including GOP Reps. Chip Roy, Texas, and Ralph Norman, S.C., the GOP-led committee voted seven-to-six to advance the legislation to a floor debate, as early as Wednesday. The pair voted with the committee's four Democrats in opposing the measure's advancement.

Kentucky Republican Rep. Thomas Massie, one of several conservatives whom House Speaker Kevin McCarthy appointed to the committee when making concessions to conservatives earlier this year, opted against joining his colleagues to block the motion, saying "I think that is an inappropriate use of the Rules Committee."

"You can control every amendment that comes to the floor with this committee. You can undo the good work of the other committees... but my interest in being on this committee was not to imprint my ideology," he said.

Treasure Secretary Janet Yellen says the U.S. could default on some if not all of its debts by Monday, June 5.

The measure voted on Tuesday night follows months of negotiations between House Speaker Kevin McCarthy and President that conclude Saturday with a deal in principle.

Senate Majority Leader said prior to the vote his chamber would hold its vote as soon as possible, if and when it clears the House.

On the table is a two-year suspension of the debt limit entirely, which would give the Treasury full leeway to borrow as much money as it needs to pay the government's bills through the next presidential election.

The new debt limit will be whatever level it reaches at the end of the suspension, the New York Times noted.

In exchange for that suspension, Republicans secured spending cuts for fiscal year 2024 and a limit of 1% growth to discretionary spending in 2025.

The plan also included the permitting requests for a key pipeline project that had long been bogged down in the bureaucratic process. Some work requirements for federal benefits and an end to the freeze on student loan debt repayments also made it into the final version.

The nation hit its $31.38 trillion debt limit in January of this year, prompting Yellen to implement "extraordinary measures" to pay the nation's bills.

Despite delivering repeated warnings that lawmakers needed to reach an agreement by June 1, she later revised the deadline to June 5.

But if the votes fail, lawmakers have until Monday to negotiate and pass an alternative plan to permit the Treasury to borrow more money, at which point the government will run out of cash to pay its bills.

Democrats had sought a clean increase to the spending limit while McCarthy, who faced intense pressure from within his conference to seek budgetary concessions, had hoped to pair any increase with spending caps to address the mounting national debt.

The California Republican barely secured enough support to claim the speaker's gavel earlier this year after making considerable concessions to House conservatives, including promises to fight for spending cuts.

In late April, the GOP-led House passed the Limit, Save, Grow Act of 2023 which would have increased the debt limit by $1.5 trillion for one year and capped the growth rate of domestic spending. Senate Democrats and the White House derided the plan as a nonstarter and the final agreement includes greater concessions to that faction.

The final compromise plan has attracted considerable scrutiny from McCarthy's conservative detractors in the Freedom Caucus. Many of the initial holdouts to his leadership have expressed sentiments that the compromise plan fails to adequately address the spending issue, with Texas Rep. Chip Roy saying on Monday that no Republican should vote for this deal and that It is a "bad deal."

Colorado GOP Rep. Ken Buck, on the same day, reportedly floated a vote to remove McCarthy to the rest of the Freedom Caucus, but Chairman Scott Perry, R-Penn., reportedly deemed it too soon for such a move. McCarthy secured the Speaker's gavel after 15 rounds of voting, in large part by making concessions to the Caucus on the debt.

Thus far, however, only North Carolina GOP Rep. Dan Bishop has publicly called for McCarthy's ouster over the deal. 

"I think it’s got to be done," he said Monday. 

While Bishop thus far stands alone on ousting McCarthy outright, more than ten House Republicans have expressed opposition to the plan, meaning McCarthy will need to secure the support of roughly a dozen Democrats to secure the bill's passage, given the narrow Republican margin of control in the chamber.

Complicating the matter for Democrats, however, is the inclusion of the pipeline permitting provision.

Specifically, the bill would approve requested permits for the Mountain Valley Pipeline, an energy project straddling West Virginia and the Old Dominion that has long faced opposition from environmental activists and left-wing lawmakers, including Virginia's own senators.

West Virginia Democratic Sen. Joe Manchin has long sought a permitting reform process to expedite the pipeline's completion. He notably a struck a deal with Schumer last year to trade his vote on the Inflation Reduction Act for a separate measure streamlining the permitting process. While Manchin honored his end, however, intense opposition from congressional Democrats in both chambers rendered Schumer unable to follow through on his end.

Some Democrats have expressed opposition to the plan on the basis of the pipeline's inclusion, NBC News reported. On top of that, however, are left-wing reservations about the work requirements.

California Democratic Rep. Rho Khanna indicated to NBC News on Monday that such matters have created concern among a sizable number of members of his conference. 

"My sense is a large majority of the House Democratic Caucus is in flux as to where they’re going to be on this," he said.

The narrowly-divided Senate has its own share of hesitant lawmakers.

Conservative GOP Sens. Ted Cruz, of Texas, Rand Paul, of Kentucky, and Mike Lee, of Utah, have expressed opposition to the plan. Cruz, in particular, took except to a comment House Minority Leader Hakeem Jeffries, who argued the plan includes "not one thing" for Democrats.

"There’s not 'one thing' for Dems?' Cruz asked. "There are $4 trillion things – a blank check – for Democrats," Cruz tweeted. "Plus 87,000 things: new IRS agents to harass Americans. All in exchange for eliminating virtually ALL of the House’s spending cuts." 

Ben Whedon is an editor and reporter for Just the News. Follow him on Twitter.

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