U.S. House Republicans chart new strategy to pressure Biden, Democrats – Stock market news
WASHINGTON (Reuters) – U.S. House Republicans will try to agree on a plan to lift the $31.4 trillion federal debt ceiling and cut government spending when Congress returns this year -week, after they were hindered for months by Democratic President Joe Biden’s demands to do so without conditions.
Speaker of the House of Representatives Kevin McCarthy in a speech on Monday at the New York Stock Exchange will lay out the conditions that Republicans want Democrats to agree to in exchange for movement on the debt limit.
He offered few specifics ahead of the talk, but Republicans have proposed keeping annual spending growth at 1% for a decade, reducing regulation and boosting energy production.
Members of McCarthy’s sometimes fragile caucus, which hold a narrow 222-213 majority, have yet to agree on actual legislation. Any proposal Republicans introduce would need to be negotiated with Biden’s Democrats, who control the Senate, before it could become law.
The White House, which is leading the Democrats’ approach to the debt ceiling, dismissed the Republican proposals as unrealistic.
Non-partisan forecasters have warned that the federal government could face a historic shortfall this summer if Congress fails to act. A default could disrupt the US and world economies and force a downgrade of the US credit rating, as occurred in the 2011 debt freeze.
But McCarthy’s speech, which Republicans say is designed to rally Wall Street support for the spending negotiations, could spark a movement after months of inaction. Biden insisted that Congress pass a “clean” increase in the debt without conditions, noting that he did so three times under his predecessor, Republican Donald Trump.
“At this point, I think there is no choice for the Republicans and the speaker but to put forward some kind of proposal,” Representative Tom Emmer, the No. 3 Republican in the House, told Reuters.
The prospective legislation, which conservatives hope to pass by the end of April, could remove the loan limit until May 2024, according to a source familiar with the matter. This sets the stage for another debt ceiling debate in the final months of the 2024 presidential campaign.
But first, Republicans must agree on a proposal that can win the support of at least 218 of their 222 members.
“Getting everyone on the same page is a challenge. But it’s not impossible and I’m optimistic we’ll get there. This is an issue we’ve been talking about for a while,” said Republican Representative Ben Cline.
Cline, a member of the House Hardline Freedom Caucus, sits on both the House Budget and Appropriations Committees and is helping to craft a budget plan for the conservative Republican Study Committee, the largest caucus in Congress.
The White House has so far rejected the proposals.
“Speaker McCarthy is adopting the extreme MAGA House Republican position: threatening our economic recovery, the retirement of hard-working Americans, and a catastrophic shortfall in order to force devastating cuts,” the spokesman said. -White House Andrew Bates.
House Republicans claim their proposals will win enough public support to force Biden and Democrats into negotiations, as the party’s bill to roll back changes to Washington, DC’s criminal code passed by Congress last month, despite initial Democratic opposition.
Biden and McCarthy met at the White House in February to discuss the shutdown, but have held no further talks since the administration asked House Republicans to come up with a budget proposal.
The White House in March unveiled its own budget proposal that it said would cut US deficits by $3 trillion over the next 10 years. But with the House Budget Committee not expected to produce a spending plan anytime soon, the Republican focus has shifted to the debt ceiling plan.
Republican Representative Garret Graves, McCarthy’s top adviser who has led debt ceiling talks within the Republican conference, said the legislation could follow the outline set out in McCarthy’s 28 of March to Biden.
“We’re continuing to discuss both strategy and putting a little more meat on the bone or translating the speaker’s letter into legislation,” Graves said in an interview.
While McCarthy’s letter contained few details, Republicans are considering a proposal that would reset non-defense discretionary spending to fiscal 2022 levels, keeping annual spending at 1% for ten years, reduce regulation, boost energy production and re-establish the debt-to-gross ratio ceiling. domestic product.
The Republican conference is divided by ideological caucuses known internally as “the five families,” a reference to the mafia gangs in the movie “The Godfather.”
The five families, who are expected to take up the plan early next week, lead the way from members of the bipartisan Problem Solvers Caucus, who floated the idea of reaching a deal with Democrats to avoid default, until the conservative House Freedom Caucus. , whose members insist on deep spending cuts and say Biden will be responsible for any shortfall.
Some Republicans also favor increasing the clean debt limit that Biden requested.
(Reporting by David Morgan; Additional reporting by Trevor Hunnicutt; Editing by Scott Malone and Alistair Bell)
By David Morgan