Democrats and Republicans confident they can pass deal to avert US debt default

Republican leaders and the White House have secured the backing of key mainstream lawmakers for their deal to avert a damaging default on US debt, raising confidence that the pact can be swiftly approved by Congress.

Republican House Speaker Kevin McCarthy and US president Joe Biden have little room for error to ensure passage of the bipartisan pact they agreed on late Saturday after days of heated negotiations.

The deal immediately triggered a backlash from right-wing conservatives.

Chip Roy of Texas called it a “turd sandwich”, Ralph Norman of South Carolina said it was “insane”, and Dan Bishop of North Carolina described it with a green vomit emoji, raising fears that the deal could face an uphill struggle on Capitol Hill.

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[ Threat of a US debt default eased but has not disappeared entirely ]

But moderate lawmakers from Republican and Democratic parties indicated that they would endorse the agreement, suggesting it has sufficient support to pass into law.

“With a divided government, the only way forward is to find compromise and put the interests of the American people above all else,” Mike Lawler, a House Republican from a swing district north of New York City, said in a statement.

“Nothing we do in Congress is easy. There can always be a tortured trail to get there, but I am quite confident we’re going to get this done,” Dusty Johnson, a Republican from South Dakota, told the Financial Times.

Mr Johnson defended the deal on its merits. “This bill is a series of pretty substantial conservative wins – there is no way in which this bill moves American society in a more liberal or progressive way compared to the status quo,” he said.

The first critical test will be a vote in the House expected on Wednesday. The Senate is due to follow with votes that could slip into next weekend. If no legislation is enacted by June 5th, the US will run out of cash to pay all its bills, which could rattle financial markets and plunge the US and global economies into recession.

Members of the House are expected to return to Washington on Tuesday after the Memorial day long weekend ahead of the vote. McCarthy has an exceedingly small majority to work with in the House, but will be able to count on some Democratic support to make up for Republican defections.

Many lawmakers are still undecided and are withholding judgment until they have more time to study the bill.

“There’s still a lot of work to do from here to a floor vote. That’s the thing about having such a slim majority. Even the most routine measure has the potential to become an agonising cliffhanger,” said Kevin Madden, a Republican strategist at Penta Group, a consultancy in Washington.

Most policy analysts are still expecting it to pass.

“While there are some disgruntled far-right members, most conservatives are invested in getting this deal through and have little interest in entertaining a default or a motion to vacate the chair,” said Ben Koltun, of Beacon Policy Advisors, referring to an effort to strip McCarthy of his speakership.

“It is going to blow right through with no questions asked,” predicted James Lucier, a managing director at Capital Alpha.

On the Democratic side, there has been some progressive hand-wringing about some of the concessions agreed by Biden. But expressions of support, even if halfhearted, were rolling in on Sunday.

“Our members are encouraged that the two sides have reached an agreement, and are confident that president Biden and White House negotiators have delivered a viable, bipartisan solution to end this crisis,” said Annie Kuster of New Hampshire, who chairs a coalition of moderate Democrats.

Most of the drama is expected to be on the Republican side. A first hurdle is likely to be a vote in the House rules committee, which includes several Republican opponents of the bill who may try to block it.

Outside pressure could also be a factor. Former president Donald Trump, who still holds sway over Republicans and previously called on lawmakers to default in the absence of deep spending cuts, has not weighed in on the agreement, nor has Ron DeSantis, the Florida governor.

Both are candidates for the Republican presidential nomination in 2024. But Ronna McDaniel, the chair of the Republican National Committee and a Trump ally, was enthusiastic about the deal, calling it a “dramatic victory” for McCarthy.

“Before they passed their history-changing bill, no one would have believed it possible to cut spending, re-establish work requirements, reform permitting for energy and infrastructure and more,” she told Fox News in an interview on Sunday. – Copyright The Financial Times Limited 2023