McCarthy Searches for Debt-Limit Bill Support on Eve of Expected Vote

Billy House and Erik Wasson
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(Bloomberg) -- House Speaker Kevin McCarthy is moving ahead with a vote this week on his bill linking a debt ceiling increase to spending cuts despite deep divisions within his own Republican ranks that threaten to sink the measure.

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The ultimate outcome of the vote may not be known until the roll call happens, a rarity in US politics. And there were signs that plans to hold the vote on Wednesday were in danger of slipping amid the entrenched opposition.

If he fails on the floor, McCarthy risks the strength of his negotiating position in talks over a market-shaking debt default and, potentially, his own speakership. Yet even as moderates and conservatives alike voiced misgivings about the bill, McCarthy — barely elected speaker in January on the 15th round of votes — expressed confidence he would prevail.

“This week we will pass a bill on this floor that will lift the debt ceiling,” the California Republican said Tuesday night.

McCarthy, who can only afford very few Republican defections in the face of united Democratic opposition, said he’s “working through” lawmakers’ concerns. Yet he has also said he’s not changing the bill, which has laid bare divisions on everything from work requirements to clean-energy tax breaks.

If the bill fails, the ensuing political chaos could undercut the Republican negotiating position. It also would likely delay the start of any talks over raising the debt ceiling. President Joe Biden has refused to agree to any spending cuts, and demands a “clean” approval of any debt increase.

Here’s where the GOP fault lines are:

Ethanol

Republicans from Iowa and other states in the Midwest have raised concerns about provisions that roll back biofuel-related tax credits and subsidies. Six or seven of these Republicans continued to withhold support for the bill late Tuesday, according to a person familiar with the GOP vote counting.

The section rescinding the green energy tax credits in Biden’s signature Inflation Reduction Act were added at the behest of conservatives in the House Freedom Caucus.

Corn-state Republicans are coming under heavy pressure from lobbyists and local producers to ensure that ethanol credits are retained but McCarthy is loathe to reopen the bill for revisions. That could trigger a rush of additional requests.

In a positive sign for the speaker, Nebraska’s Don Bacon said he would vote for the bill despite ethanol concerns because, he added, he doesn’t expect the White House or Senate to agree to the demand.

Work Requirements

McCarthy has worked closely with House Freedom Caucus Chairman Scott Perry of Pennsylvania to fashion the bill as it now stands. McCarthy’s proposal would increase the nation’s debt ceiling by $1.5 trillion, in order to stave off a US payments default until March 31, 2024 at the latest. In exchange it aims to trim $4.8 trillion in deficits over a decade in part by cutting discretionary spending by $130 billion next year and capping its growth at 1%. It would also ease energy permits.

The bill institutes a 20-hour-per-week work requirement for able-bodied Medicaid recipients without children starting in 2025 and expands current work requirements for food stamps to cover beneficiaries up to age 55. But Perry hasn’t been able to ensure that all conservatives are on board and wouldn’t commit to voting for the bill when asked Tuesday.

Representative Matt Gaetz of Florida has said he is a “no” unless the requirements change in 2024. He and others like Texas Representative Chip Roy have also pushed for a 30-hour-per-week work requirement instead of 20 hours. Embattled New York Republican George Santos has filed an amendment to make the change.

Moderates

Representative Brian Fitzpatrick of Pennsylvania said he doesn’t support changing the work requirement from 20 hours to 30 hours and wants to maintain flexibility in what counts as work to include volunteer activities. Mike Lawler of New York, another moderate, said he supported the work requirements in the proposal but wouldn’t support any proposal expanding them to parents of underage children.

Other moderates resisting voting for the bill include South Carolina’s Nancy Mace who said she opposes the rollback of green tax breaks. Her state has become a hub of electric vehicle manufacturing.

Ultra-Conservatives

McCarthy also has to contend with discontent from Representative Andy Biggs of Arizona, who says the rushed process is a problem and is balking at the size of the debt increase. If the bill is reopened to appease the ethanol provision critics, Biggs and allies like Matt Rosendale of Montana could push for the debt increase to be much smaller.

Representative Tim Burchett of Tennessee, who has long opposed increasing the debt ceiling at all, said Tuesday night he was dead set against the bill.

Roy, who sits on the Rules Committee, acknowledged opposition to parts of the bill but said there is “overwhelming” conference support for the overall framework.

“All of this is, frankly, trying to get something passed because the president refuses to do anything,” Roy added.

--With assistance from Emily Wilkins.

(Adding a contributor.)

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