After lengthy negotiations, a tentative deal has been reached between the White House and U.S. lawmakers on the country’s borrowing limit. However, House Speaker Kevin McCarthy now faces the challenge of pushing the deal through the House, where hardline Republicans are threatening to sink it.
Republican Hardliners Threaten to Block Deal
Hardline Republicans in the House are already threatening to stop the deal from passing. Representative Chip Roy, a prominent member of the hardline House Freedom Caucus, said on Twitter that they would try to stop the deal. Both House and Senate Republicans have expressed criticism of the deal’s time frame and emerging terms.
Possible Default if Congress Fails to Act
If Congress fails to deal with its self-imposed debt ceiling before June 5, it could trigger a default that would shake financial markets and send the United States into a deep recession. Republicans control the House 222-213, while Democrats control the Senate 51-49. Moderates from both sides will have to support the bill, as any compromise will almost definitely lose the support of the far left and far right wings of each party.
Details of the Deal
The deal suspends the debt ceiling until January 2025, after the November 2024 presidential election, in exchange for caps on spending and cuts in government programs. The deal would boost spending on the military and veterans’ care and cap it for many discretionary domestic programs. However, Republicans and Democrats will need to battle over which programs in the months to come, as the deal doesn’t specify them.
Criticism of the Deal
Senator Lindsey Graham expressed concern about the deal’s potential effect on U.S. defense and Washington’s support for Ukraine. Several credit-rating agencies have put the United States on review for a possible downgrade, which would push up borrowing costs and undercut its standing as the backbone of the global financial system.
Progressive Democrats in both chambers have said they would not support any deal that has additional work requirements. This deal does, sources say, adding work requirements to food aid for people aged 50 to 54. Representative Dan Bishop and other hardline Republicans were sharply critical of early deal details that suggest President Biden has pushed back successfully on several cost-cutting demands on Saturday, signaling that McCarthy may have an issue getting votes.
The tentative deal on the U.S. borrowing limit may have been reached, but House Speaker Kevin McCarthy has a challenging task ahead of him in pushing it through the House, with hardline Republicans already threatening to sink the deal. The outcome of the vote will be crucial, as failure to deal with the country’s self-imposed debt ceiling before June 5 could trigger a default that would shake financial markets and send the United States into a deep recession.
Leave a Reply