US House Speaker defends debt ceiling deal

House Speaker McCarthy defends the preliminary deal to raise the debt ceiling he reached with President Biden amid criticism from Republicans.

Republican Congressman Kevin McCarthy faced a barrage of criticism from members of the House Freedom Caucus after announcing an "agreement in principle" with the White House to prevent the US from defaulting on its debt over the weekend.

House Speaker McCarthy acknowledged that conservative Republicans may not get everything they want from the deal, but Democrats also have nothing to gain from it.

House Speaker Kevin McCarthy answers reporters on Capitol Hill, Washington, DC, May 17. Photo: AFP — House Speaker Kevin McCarthy answers reporters on Capitol Hill, Washington, DC, May 17. Photo: *AFP*

"It may not do everything for everyone, but it's a step in the right direction that nobody thought we could do today," McCarthy told Fox News on May 28. "I'll argue this bill with anybody. Is it everything I want? No, because we don't control everything. But it's the biggest budget cut in history."

Details have not been finalized, but the deal would include raising the debt ceiling for two years, curbing spending during that time, recovering unused Covid-19 funds, speeding up permitting for some energy projects and adding conditions to programs for the poor.

Mr McCarthy said the bill would be publicly reviewed for 72 hours before coming to a vote in the House.

Still, some Republicans in Congress have expressed frustration with the negotiations between House Speaker Nancy Pelosi and President Joe Biden. Republican Rep. Andrew Clyd said he was “hardly in favor” of the current deal.

Republican Rep. Dan Bishop called the deal a "complete surrender," while Rep. Chip Roy, a prominent member of the House Freedom Caucus, vowed to seek to block the deal from passing.

Republican Senator Lindsey Graham also expressed concerns about the deal's potential impact on US defense and Washington's support for Kiev.

"Don't want to default, but I will not support a deal that reduces the size of the navy and prevents continued technological and weapons support for Ukraine," he wrote on Twitter.

The US hit its $31.4 trillion debt ceiling set by Congress in January, forcing the Treasury Department to take “extraordinary measures” to continue funding the government while President Biden and congressional leaders agree to raise the debt ceiling.

Republicans in the talks are demanding deep spending cuts to slow the growth of the U.S. national debt, which is now nearly equal to the annual output of the U.S. economy . Republicans also want to impose work requirements on some low-income welfare programs, which would reduce the number of people covered and receiving benefits.

The prolonged standoff has roiled financial markets, weighed on stocks and forced the US to pay record high interest rates on some of its bond sales. Economists say a default would be far more damaging, potentially plunging the country into recession, shaking the global economy and sending unemployment soaring.

The last time the US was on the brink of default was in 2011, when the president and Senate were all Democrats and the House was controlled by Republicans. Congress eventually averted a default, but the economy suffered severe shocks, including the first-ever US credit rating downgrade and a massive stock sell-off.

Vu Hoang (According to Fox News, Reuters )

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