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McCarthy preps House GOP debt deal to draw Biden into talks

WASHINGTON (AP) — Speaker Kevin McCarthy convened House Republicans behind closed doors Tuesday to unveil his proposal to raise the nation’s debt limit as part of a package to limit future federal spending increases to 1% and other policy changes in an opening bid to draw President Joe Biden into negotiations.

The typically fractured House Republican majority has appeared surprisingly open to the plan, which McCarthy outlined in a high-profile speech at the start of the week to Wall Street. But it remains a work in progress. While the Republican proposal has almost no chance of passage in the Democratic-controlled Senate, McCarthy wants to pass the package from the House to kickstart White House talks.

“I’m confident we’ll have it and comfortable we’ll pass it,” said Rep. Tom Cole, R-Okla., the chairman of the Rules Committee, who said the bill could come for a vote as soon as next week.

Even as some of McCarthy’s most ardent skeptics from the House Freedom Caucus — including those who initially refused to back him to be speaker — seemed ready to give his debt ceiling proposal a look. But others remained deeply skeptical, showing the limits of the embattled speaker’s grip on his majority.

Rep, Matt Gaetz, R-Fla., a McCarthy holdout for speaker was unsold on the plan and suggested changes Tuesday.

“There is no ‘this,’ said Rep. Clay Higgins, R-La., as he exited the session. “We’re discussing what the this will be.”

The swift turn of events shows the high stakes of the debt ceiling fight, which is expected to play out in the weeks and months ahead, as Biden confronts the new era of divided government with Republicans in charge of the House eager to flex their majority power.

The White House has refused to engage with McCarthy on the debt limit, saying he must put forward a budget proposal before any talks. Biden’s senior aides are skeptical the embattled new speaker can rally his various factions behind any plan. The White House dismissed McCarthy’s address Monday to the New York Stock Exchange where he unveiled the contours of his proposal saying “a speech is not a plan.”

The Treasury Department has said the nation will need to raise the debt ceiling, now at $31 trillion, likely by summer. Meanwhile, Treasury is taking “extraordinary measures” to allow continued borrowing to pay off already accrued bills, but that will eventually run out.

McCarthy has been working furiously behind the scenes with his leadership team to unite the “five families” — the often warring factions of Republican caucuses including the House Freedom Caucus, the Republican Study Committee and others — to join together. He and the leadership team discussed the plan Tuesday at the House Republicans’ closed door session.

The proposal the Republican speaker outlined is far-reaching, and expected to be rejected by the White House.

It would raise the debt limit into next year — putting it squarely into the 2024 presidential election in exchange for rolling back spending to fiscal 2022 levels, recouping tens of billions of dollars of unspent COVID-19 relief funds and imposing a 1% cap on future spending each year for the decade.

Additionally, McCarthy’s plan would impose new work requirements on recipients of government aid, cutting billions from the federal safety net. And it would tack on H.R. 1 a sweeping energy package of oil and gas drilling and permitting reforms that would undo much of Biden’s climate change agenda.

“I find all indications to be we’re going to put a very serious proposal on the floor and pass it with 218 or more votes,” said Freedom Caucus member Rep. Dan Bishop, R-N.C., as lawmakers arrived at the Capitol late Monday evening, referring to the majority needed for passage.

But by Tuesday, not vote was set in stone, according to a person familiar with the closed door meeting and granted anonymity to discuss it.

In many ways, this is the easy part for McCarthy: A vote as soon as next week would not necessarily be binding since the proposal is dead on arrival in the Democratic-controlled Senate.

That political dynamic may make it easier for McCarthy to rally his ranks behind the plan if Republicans see if as merely a starting point in negotiations designed to push Biden to the table for talks.

House Freedom Caucus Chairman Rep. Scott Perry, R-Pa., said late Monday the plan was a step in the right direction but he still needed to see the details.

“Kevin McCarthy is going to get 218 votes on this deal,” said Rep. Dusty Johnson, R-S.D., a chairman of the conservative Main Street Caucus, referring to the majority needed for passage.

__ Associated Press writer Stephen Groves contributed to this report.

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