McCarthy Emerges From the Debt Limit Fight With Victories, and Some Wounds

 

NEWS ANALYSIS

McCarthy Emerges From the Debt Limit Fight With Victories, and Some Wounds

 

The speaker defied expectations and delivered a debt limit agreement that few thought he could manage, but left some of his Republican colleagues feeling betrayed.

 

Carl Hulse

By Carl Hulse

Reporting from Washington

https://www.nytimes.com/2023/05/31/us/politics/kevin-mccarthy-debt-limit-republicans.html

May 31, 2023

 

When the debt limit fight began, it was widely assumed that Speaker Kevin McCarthy, untested and inexperienced in high-stakes negotiations, would either preside over an economically and politically calamitous government default or lose his hard-won post in a right-wing mutiny after caving to Democrats.

 

So far, he has managed to avoid both outcomes while claiming some fiscal and policy wins.

 

With House approval on Wednesday night of the debt limit package he personally negotiated with President Biden, Mr. McCarthy defied expectations and even earned grudging respect from White House officials while defusing the debt limit time bomb he himself planted by insisting on concessions in return for raising the nation’s borrowing limit.

 

The bar was set low for Mr. McCarthy, known more for politicking and fund-raising than for policymaking, after he struggled mightily to win his post in the first place as House Republicans took control in January.

 

But in the end, he delivered an agreement that met his goal of cutting spending from current levels. It was not pretty; in fact, it was downright ugly. He managed to do so only with significant help from across the aisle, as Democrats rescued him on a key procedural vote and then provided the support needed for passage. Mr. McCarthy exceeded his goal of winning the support of the majority of his members with 149 backing it, but more Democrats — 165 of them — voted for the bill than members of his own party, an outcome that will fuel Republican criticism that he cut a deal that sold out his own people.

 

That is not the way powerful speakers of the past have typically accomplished their goals.

 

But Mr. McCarthy has proved uncommonly willing to endure political pain and even humiliation — a trait that was on ample display during his 15-round fight for the speakership in January — while focusing on extracting a few marquee concessions from Mr. Biden that could allow him to claim victory and avert a default he plainly wanted to avoid, even if many of his members did not.

 

His allies gave him credit for taking on the White House and Senate Democrats and emerging with a positive result when most Democrats were counting on him to fail. White House officials and congressional Democrats privately predicted that Mr. McCarthy would be unable to corral his extraordinarily fractious troops, and would therefore have no leverage in fiscal talks, allowing them to force through an increase in the debt ceiling with few, if any, concessions to Republicans.

 

“Underestimated for damn sure,” said Representative Patrick T. McHenry of North Carolina, one of the lead G.O.P. negotiators. “Kevin McCarthy has always been underestimated.”

 

Lifting the debt ceiling. The deal reached by President Biden and Speaker Kevin McCarthy would suspend the nation’s debt limit until January 2025. This would allow the government to keep borrowing money so it can pay its bills on time.

 

Spending caps and cuts. In exchange for suspending the debt ceiling, Republicans demanded a range of concessions. Chief among them are caps on some spending over the next two years. The deal also claws back $10 billion in I.R.S. funding.

 

Food stamps. The bill would place additional work requirements on older Americans who receive assistance through the Supplemental Nutrition Assistance Program, but it also would expand food stamp access for veterans and homeless people.

 

Student loans. The legislation would officially end Biden’s freeze on student loan repayments by the end of summer. It would also prevent the president from issuing another last-minute extension, as he has done several times.

 

Environmental impact. Both sides agreed to new measures to get energy projects approved more quickly. The deal includes a win for Senator Joe Manchin of West Virginia, a Democrat who strongly supports fossil fuels, by fast-tracking the construction of a contentious pipeline.

 

Mr. McCarthy’s achievement may yet come at a cost. Far-right conservative Republicans remain outraged at the agreement he struck with Mr. Biden, saying it fell woefully short of what he promised and what Republicans committed to as they pursued the majority last year.

 

Some feel personally betrayed and say he went back on his promise to insist on paring back spending even further. More than two dozen rank-and-file Republicans registered their dissatisfaction with Mr. McCarthy by opposing the procedural measure bringing the package to the floor, an aggressive challenge to the leadership that also showed they were not worried about payback from the speaker’s office.

 

Representative Ken Buck, Republican of Colorado, said Mr. McCarthy had hurt himself with many House Republicans “big time, big time.”

 

“I think this is going to be a problem for him,” said Mr. Buck, who along with other critics of Mr. McCarthy said lawmakers would be talking among themselves about how or whether to proceed with an attempt to force out the speaker.

 

Mr. McCarthy, in an interview on Fox News, said talk of unseating him was not a worry.

 

“To govern is not easy, but I don’t want to be on the wrong side of history,” he said, saying that critics of the package would regret their opposition. “Every single one of those members who vote ‘no’ will miss the opportunity to vote for the largest cut in American history.”

 

That is almost certainly an exaggeration, though the agreement was chock-full of side deals and complex details that allowed the G.O.P. to claim far larger spending cuts than they secured.

 

One factor working in Mr. McCarthy’s favor in holding off a move to oust him was that conservatives with standing among House Republicans, such as Representative Jim Jordan of Ohio, remained in his corner. There is a distinct segment of House Republicans who are eager to move past the fiscal fight and focus more on the investigations and culture-war issues that they think play better with their voters and are being lost in the current moment.

 

Mr. McCarthy’s backers say his critics do not truly understand the limits of their leverage in controlling only the House while Democrats hold the majority in the Senate and Mr. Biden is in the White House. They say that Mr. McCarthy was never going to get the type of agreement the most extreme elements of House Republicans could embrace unless he was willing to force a devastating default. He made it clear early on that he was not.

 

For months, White House officials and Senate Democrats figured they could hold off Mr. McCarthy’s demands to begin talks with Mr. Biden on budget and spending issues by declaring that he must first show that he could pass something through the House. They saw that as unlikely, given his four-seat margin for error and the varying ideologies of his membership.

 

The pivotal moment came in late April when, much to the surprise of the administration and congressional Democrats, he did just that, squeezing through a partisan measure that cut spending and rolled back Biden initiatives. The legislation had no chance of advancing in the Senate but served as a marker and won him a seat at the negotiating table.

 

“No question the White House miscalculated on this one,” said Representative Garret Graves of Louisiana, another of the key Republican negotiators. “They misjudged the speaker.”

 

“Kevin McCarthy has always been underestimated,” said Representative Patrick T. McHenry, right, who, along with Representative Garret Graves, left, helped negotiate the deal.Credit...Haiyun Jiang for The New York Times

 

Senator Chuck Schumer, Democrat of New York and the majority leader, downplayed suggestions that Mr. McCarthy had outmaneuvered the Democrats.

 

“Look at the result,” Mr. Schumer told reporters. “It is a far, far cry from where the Republicans started out.”

 

Administration officials conceded they may have taken Mr. McCarthy too lightly. They say privately that he proved a stronger adversary in negotiations than many of them were expecting.

 

He also won some policy concessions that administration officials had not expected to give. For months, top administration officials had privately predicted that Mr. Biden would agree to modest caps on discretionary spending to accompany a debt limit increase.

 

But Mr. McCarthy successfully pushed to protect military spending from the cuts, forcing domestic programs in such areas as education and environmental protection to bear the brunt of the reductions — a condition that Democrats have strenuously resisted in past budget negotiations. He also secured a side deal that would cut $20 billion in new funding for an I.R.S. crackdown on tax cheats, which Republicans had made a top target for cuts.

 

Such successes were still not enough to satisfy hard-right critics who wanted more. But Mr. McCarthy was willing to take what he could get and declare victory — and absorb the abuse he was already receiving in return.

 

Carl Hulse

Carl Hulse is chief Washington correspondent and a veteran of more than three decades of reporting in the capital. More about Carl Hulse