Bill to avoid US debt default clears first Congress hurdle amid Republican opposition

Legislation aimed at preventing a US debt default as early as next week has cleared its first procedural hurdle in the US Congress.

However hardline conservatives in the House of Representatives said they will fight against the Bill amid the first rumblings that there could be moves to oust speaker Kevin McCarthy over his role in putting together the Bill.

Members of the right-wing freedom caucus in the House of Representatives described the legislation to raise the amount the US government can borrow in return for spending restrictions and other concessions as “a bad Bill”.

The chairman of the freedom caucus, Scott Perry, said on Tuesday “we will do everything in our power to stop it,”

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Another member of the caucus, Chip Roy, said there would be “a reckoning” unless the Bill was defeated.

On Tuesday night the Bill passed through the rules committee of the House of Representatives. This will now allow it to go to the floor of the chamber for a full vote on Wednesday.

In normal circumstances the rules committee is essentially just a rubber-stamp process as it is controlled by the speaker of the House.

However, Mr Roy as well as another conservative member of the freedom caucus on the rules committee objected to allowing the Bill to be considered.

A third right-wing Republican on the committee backed permitting the Bill to move to the floor on the House.

The new Bill to prevent a debt default would put into law a deal agreed at the weekend between US president Joe Biden and Mr McCarthy.

However, the strong opposition voiced by conservatives to the debt deal has raised questions about whether Mr McCarthy could face attempts to remove him as speaker.

As part of an agreement Mr McCarthy reached with conservatives in January for their support to secure the post, revised rules were introduced that would allow just one politician to propose a vote to remove him as speaker.

Representative Dan Bishop of North Carolina suggested on Tuesday he considered the debt and spending deal as sufficient grounds for ousting Mr McCarthy from his post.

Ultimately whether Mr McCarthy faces a motion of no confidence may depend on the number of members of his own parliamentary party who, in the end, refuse to back the debt deal.

Conservative Republican politician Matt Gaetz told broadcaster Newsmax: “If a majority of Republicans are against a piece of legislation and you use Democrats to pass it, that would immediately be a black-letter violation of the deal we had with McCarthy.

“And it would likely trigger an immediate motion to vacate.”

However despite the opposition of conservatives, Mr McCarthy and his allies remained confident on Tuesday the legislation to raise the US debt ceiling and avoid a default would have sufficient support to be adopted by the House of Representatives.

“We are going to pass the Bill”, the speaker said on Tuesday.

Progressives in the Democratic Party are also unhappy with elements of the Bill, such as new work requirements for those accessing federal government supports, such as the food stamps programme, for low-income Americans.

At a press conference on Tuesday members of the freedom caucus expressed scepticism that the US would actually default on its debts if the debt ceiling was not increased immediately.

Mr Perry said: “We are not going to default. We are taking in record revenues.”

He described suggestions the US would not have the money to pay its debts or meet social security or Medicare payments as “scare tactics”.

The debt deal Bill, if passed by the House of Representatives, will then have to go before the US senate before it could come into law.

Some conservative Republicans in the Senate have already expressed their opposition and could seek to delay the Bill’s passage.

The deal to raise the limit on the amount the US government can borrow – known as the debt ceiling – was agreed on Saturday night in Washington following a 90-minute phone call between the president and Mr McCarthy. This came after days of negotiations between their representatives.

Treasury secretary Janet Yellen had warned on Friday the US government could run out of money to pay its bills by June 5th unless the limit was raised.

Such a move would have led to a US default, which the White House had argued would lead to economic turmoil in the US and around the world.

Central to the proposed package is a two-year budget deal that would hold spending flat for 2024 and increase it by one per cent for 2025 in exchange for raising the debt limit for two years.

Military spending will increase at a higher rate.

The agreement is also expected to raise the age – from 49 to 54 – for existing work requirements for able-bodied adults without children to access some social programmes.

However, there would be waivers for military veterans and the homeless.