What to Know in Washington: McCarthy Notches Debt Plan Win

Speaker Kevin McCarthy squeaked his debt limit bill through the House on Wednesday, winning a politically important victory that intensifies the standoff with the White House over averting a catastrophic US default.

The vote, coming after days of arm twisting, puts pressure on President Joe Biden to open talks with Republicans over the debt limit as a payment default looms this summer. But as McCarthy (R-Calif.) shored up his votes on Wednesday, Biden signaled he remains unwilling to yield to GOP demands.

“I’m happy to meet with McCarthy, but not on whether or not the debt limit gets extended,” Biden said. “That’s not negotiable.”

Valerie Plesch/Bloomberg

Speaker Kevin McCarthy (R-Calif.) speaks at a news conference Wednesday.

The bill, which passed 217-215, is the Republican opening offer and has no chance of passing the Democratic-controlled Senate.

Rep. George Santos (R-N.Y.), who had been undecided, was the last Republican to cast a vote, tipping the balance in favor. Four members of his party, Reps. Andy Biggs (Ariz.), Ken Buck (Colo.), Tim Burchett (Tenn.), and Matt Gaetz (Fla.), voted against the plan, along with every Democrat in the chamber.

White House Press Secretary Karine Jean-Pierre said in a statement that the measure “cuts veterans’ health care, education, Meals on Wheels, and public safety, takes away health care from millions of Americans, and sends manufacturing jobs overseas.”

“The president can no longer ignore by not negotiating,” McCarthy said. “We have done our job.”

Democrats said the bill — which would cut domestic agency funding by 22% if the Pentagon is spared — is so extreme that it cannot move talks forward.

“This is a ransom note,” said Rep. Jim McGovern (D-Mass.). “They say that in order for us to pay our bills for one year, we have to make 10 years of deep cuts that will hurt our constituents.”

McCarthy’s greatest test, however, is yet to come. If he strikes a compromise with Biden or a looming default forces him to put a no-strings-attached bill up for a vote, he risks angering ultra-conservatives. A deal that falls short of their demands could set up a career-ending no-confidence vote on the floor.

The Treasury is to soon release a new estimate of when the department thinks the government will be at risk of default without raising the federal borrowing limit, expected for this summer. Erik Wasson and Billy House have the full story.

Work Rules in Debt Bill Risk Patchwork Impact on Most Vulnerable

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BIDEN’S AGENDA

• Biden at 12:15 p.m. participates in Take Your Child to Work Day at the White House
• At 6:45 p.m., the president participates in a campaign call with grassroots supporters
• White House Press Secretary Karine Jean-Pierre gives a briefing at 1:45 p.m.

CONGRESS’ SCHEDULE

• At 11 a.m., South Korean President Yoon Suk Yeol addresses a joint meeting of Congress
• The House gathers at 9 a.m. and may consider a resolution to pull certain US troops from Somalia
• The Senate at noon meets with plans for procedural votes on a measure regarding the Equal Rights Amendment and a judicial nominee

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• Prominent leaders of South Korean businesses, including LG, Samsung, and Hyundai, gathered with celebrities including actress Angelina Jolie at a state dinner to honor Yoon Wednesday at the White House. Read more

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To contact the reporters on this story: Brandon Lee in Washington at blee@bgov.com; Michaela Ross in Washington at mross@bgov.com

To contact the editor responsible for this story: Kayla Sharpe at ksharpe@bloombergindustry.com