House Republicans eye bill to cut spending, raise debt ceiling amid stalemate

WASHINGTON - House Speaker Kevin McCarthy (R-Calif.) signaled Thursday that Republicans could forge ahead with their own bill to raise the debt ceiling and slash federal spending by billions of dollars, even as he reiterated his demand that President Biden meet with him to discuss a potential deal.

McCarthy’s ultimatum - delivered with a jab at Biden’s age - appeared to unite his usually fractious conference and heightened the odds of a political showdown that could damage the fragile U.S. economy.

The debt ceiling is the legal limit on how much the U.S. government can borrow to pay its existing bills. The country ran up against the threshold in January, prompting the Treasury Department to begin taking special budgetary steps to avert a possible default - a series of maneuvers that may only forestall a crisis until late summer or early fall.

Ultimately, Congress must act to approve any debt-ceiling increase. But Republicans have seized on the looming deadline to try to extract potentially $130 billion in spending cuts from the White House. In response, Biden has said he will not haggle over the country’s credit, although he has expressed an openness to broader talks with McCarthy about the nation’s fiscal health. The two men last huddled in early February and briefly discussed meeting again during a St. Patrick’s Day luncheon at the Capitol - but have not spoken since.

On Thursday, Republicans still sounded firm in their resolve. At a news conference celebrating the recent passage of energy legislation, McCarthy attacked Biden, telling reporters: “I don’t understand why he thinks the debt ceiling just gets raised.”

McCarthy said he would meet with the president “at any time, at any moment,” adding later to the laughter of the GOP lawmakers standing behind him: “I would bring lunch to the White House. I would make it soft food, if that’s what he wants.”

But the speaker also signaled that Republicans may try to pass their own legislation to raise the debt ceiling, slash spending and implement other party priorities in the event they cannot reach a resolution with the White House.

“The conference is very close, and if the president doesn’t act, then we will,” McCarthy said.

Such a bill is bound to fail in the Democratic-controlled Senate, and would it face an all-but-certain veto from Biden if it somehow reached his desk. Reacting to the demands, White House press secretary Karine Jean-Pierre reiterated the president’s stance on the debt ceiling: “It should be done without conditions. There should be no negotiations.”

It remained unclear if Republicans even had the support among their ranks to finalize spending legislation, given simmering divisions over the size and scope of the cuts they should seek. But GOP leaders, teasing their strategy, still tried to present a united front: Rep. Garret Graves (R-La.), one of McCarthy’s top deputies, told reporters separately Thursday that the party aims to put pressure on Democrats as the deadline approaches.

“We don’t want to get in that situation. That’s why we have been trying to reach out (to the White House) . . . throwing some ideas on the table,” he said.

Graves said that turning Republicans’ demands into legislation - and bringing it before the House, even without Biden’s support - is “absolutely an option that’s on the table.” He later added: “But I think what all of us would prefer is to actually engage and have a discussion.”

As few as two months remain before the United States may breach the debt ceiling, triggering a default that experts say could plunge the economy into another recession. Federal officials have offered varying estimates as to the exact deadline, ranging from early June to later in September, creating vast uncertainty in global markets and on Capitol Hill.

For months, Biden has maintained that Republicans should lift the borrowing cap without restrictions, given the potential for global economic disruption. The president also has accused the GOP of hypocrisy, pointing out how his party repeatedly had supplied its votes to raise the debt ceiling under President Donald Trump.

But Republicans have ignored those criticisms, claiming their takeover of the House in January amounted to a mandate to refocus attention on the country’s roughly $31 trillion debt. Many GOP leaders have blamed that gap on Democrats, even though both parties have contributed to the fiscal imbalance. And Republicans have defended their attempts to use the debt ceiling, specifically, as political leverage, even though the party’s last attempt to do so more than a decade ago caused a downgrade in the country’s credit.

“The most significant reforms on this subject have happened historically, in modern times, at the time of the debt ceiling impasse,” said Rep. Scott Perry (R-Pa.), a member of the far-right House Freedom Caucus. “That’s when that’s when the leverage is available, that’s when the pressure is available, that’s when the incentive is available to make the necessary changes.”

The stalemate ultimately roared back into public view on Tuesday, when McCarthy issued a public letter demanding Biden come to the table to discuss a deal. He called on the president to agree to cut federal spending, cap future federal expenditures and institute a host of policy changes, including new work requirements for Americans on welfare.

McCarthy declined to specify an exact amount that he hoped to cleave from federal agencies and programs; he called only generally for reductions to “pre-inflationary levels” at agencies excluding the Pentagon. Some GOP lawmakers have endorsed as much as $130 billion in cuts, prompting dire warnings from the Biden administration that the approach could have devastating effects on average Americans.

In response, Biden issued his own public letter late Tuesday, signaling he would meet with McCarthy only to discuss broader fiscal issues. In advance of any conversation, he pressed Republicans to present a budget, which would outline their preferred spending levels for the 2024 fiscal year and beyond. The White House released its own proposal earlier this month.

“My hope is that House Republicans can present the American public with your budget plan before the Congress leaves for the Easter recess so that we can have an in-depth conversation when you return,” the president wrote, adding it “must be separate from prompt action” on the debt ceiling.

But Republicans by Thursday had not finalized such a spending blueprint, which could be delayed until late summer, a lag that GOP leaders blamed on Biden for taking too long to unveil his own plan. On Thursday, McCarthy said the two matters should remain separate, and he joined other Republicans in chiding the president for not coming to the table.

“The president is going to negotiate,” said Rep. Chip Roy (R-Texas), a top member of the far-right House Freedom Caucus. “That’s going to happen. The only question is when.”