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Republican debt ceiling bill delayed in U.S. House panel, prospects uncertain

2023-04-26T04:50:46Z

Speaker of the House Kevin McCarthy (R-CA) speaks at the the New York Stock Exchange (NYSE) in New York City, U.S., April 17, 2023. REUTERS/Brendan McDermid/File Photo/File Photo

A Republican bill authorizing a $1.5 trillion increase to the U.S. debt ceiling, coupled with deep spending cuts over a decade, hit a snag late on Tuesday, as a key committee delayed advancing the legislation to the full House of Representatives for debate and passage.

The House Rules Committee, the gatekeeper for all legislation in the chamber, unexpectedly went into recess after more than six hours of a hearing, which leaders had hoped would have concluded with the legislation being sent to the full House for debate and a vote on passage this week.

The panel was now scheduled to return to work at 1:45 a.m. EDT (0545 GMT) on Wednesday.

Hard-right Republicans Chip Roy, Thomas Massie and Ralph Norman huddled in a Capitol hallway during a lengthy Rules Committee recess. They refused to comment on their conversations.

Even before the problem arose in the Rules Committee, it was unclear whether McCarthy would be able to win passage of this top-priority bill before the House embarks on a week-long recess scheduled to begin this weekend. The House could still try for passage on Wednesday if the Rules Committee votes to advance it.

Democratic President Joe Biden has pushed for prompt action to raise the $31.4 trillion cap on federal borrowing, but without spending cuts.

McCarthy and other House Republican leaders were working to shore up support for the bill that would raise the current $31.4 trillion limit on Washington’s borrowing authority.

Earlier on Tuesday, a trickle of Republicans raised concerns about the bill, and with such a small House majority, nearly all 222 of the party’s lawmakers need to vote yes for the bill to pass.

McCarthy, who hopes the plan will jumpstart talks with Biden, earlier ignored reporters at the Capitol who asked if Republicans had the 218 votes needed to adopt the measure.

But, he did say he was ready to move forward without changing the legislation to rally support.

“Vote on it this week? Yes. This week!” McCarthy said. “If there’s any change, I’ll be sure to tell you. But right now, we’re moving forward.”

The nonpartisan Congressional Budget Office on Tuesday said the bill would lower the federal budget deficit by $4.8 trillion over the next decade if it were to become law.

“This will pass,” Representative Tom Emmer, the No. 3 House Republican, predicted in an interview. “I’m telling you right now, it will pass the House floor.”

Regardless of its fate in the House, the proposal has little chance of passing the Democratic-controlled Senate, and the White House said Biden would veto it if it reached his desk.

“A default would be totally irresponsible,” Biden said. “We’re not a deadbeat nation.”

Republicans hope a show of unity can force Biden to negotiate after a months-long standoff.

Washington and Wall Street are focused on the coming “X-date,” possibly just weeks away, when the U.S. Treasury would no longer be able to pay all its bills, triggering a default that would shake the global economy.

It could be difficult for Congress to raise the debt ceiling before then if House Republicans are unable to unite behind a proposal, analysts say.

The last prolonged standoff over the debt limit, in 2011, led to a downgrade of the U.S. credit rating, which shook financial markets and raised borrowing costs.

Debt markets are already flashing warning signs as investors grow wary.

Treasury Secretary Janet Yellen warned on Tuesday that a failure to raise the debt ceiling would trigger a “financial catastrophe” that would sharply raise the cost of borrowing money.

Some Republicans say the current bill does not do enough to cut the deficit.

“At this moment, I’m a no,” Representative Nancy Mace said.

Others are pushing for tougher work requirements for social programs, or worry that proposed cuts to renewable-energy tax credits would hurt their home states.