US debt-limit deal sets up tough battle for passage in Congress

WASHINGTON – Getting a US debt-limit deal is one thing. Overcoming entrenched political divisions and time-consuming procedural hurdles to pass the legislation before a June 5 default deadline is another challenge altogether.

The deal struck on Saturday night by Democratic President Joe Biden and Republican Speaker Kevin McCarthy offers a lot for the two parties not to like – from Democrat-opposed expanded work requirements for food stamps to higher spending levels than conservatives demanded. 

With just over a week until the US risks running out of cash to pay its bills, the two leaders now must convince enough members of their respective parties that the agreement hashed out by a small group of negotiators is a better deal than the global economic consequences of default. 

A time-consuming, last-minute revision or a failure on the House floor risks a market dive, as happened when the 2008 bank bailout legislation failed to pass.

Mr McCarthy has said he would abide by a 72-hour rule to allow lawmakers to review legislation, and is planning a House vote on Wednesday. 

In the Senate, any one lawmaker can tie up legislation and force procedural votes. Utah Republican Mike Lee has already said he would do just that if he does not like spending levels in the Bill.  

That leaves little room for failure – or time for revisions – if Congress is to pass the legislation before June 5, Treasury Secretary Janet Yellen’s revised X-date. 

‘Severe challenge’ to pass House

Republican Patrick McHenry, one of Mr McCarthy’s chief negotiators, acknowledged as much on Saturday, saying it would be a “severe challenge” to get the Bill passed by the deadline. 

Some House ultra-conservatives were agitating against the agreement almost as soon as it was announced. Representative Ralph Norman of South Carolina called it “insanity” and Representative Dan Bishop of North Carolina responded to the deal with an emoji of a face vomiting.

Still, there were early signs of openness from some on the Grand Old Party’s (GOP) right flank. Mr Warren Davidson applauded “some impressive wins” but said he would wait to see the Bill’s text before making up his mind.

While Mr Biden and Mr McCarthy are managing the clock, they also need to manage their parties’ caucuses in each Chamber. 

House Democratic leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer and Senate GOP leader Mitch McConnell will be tasked with mobilising arm-twisters to convince the flanks. 

But the deal ultimately belongs to Mr Biden and Mr McCarthy, who will have to cobble together a coalition of centrists to support it.  

Not everyone will be happy

The two-year budget agreement cuts far less spending than the US$4.8 trillion (S$6.5 trillion) in reductions the House put on the table at the start of talks. It also gives heartburn to progressives, who already have protested that Mr Biden has not been vocal enough on the deal. 

“I don’t think everybody is going to be happy at the end of the day,” Mr McCarthy told reporters last week. “Is it everything I wanted? No.”

About three dozen members of the conservative House Freedom Caucus signalled in advance they would not support a deal that falls short of their cost-cutting and other demands. They have demanded that Mr McCarthy “hold the line”.

“Are we going to tuck tail, take the first exit ramp off and walk away?” Freedom Caucus member Chip Roy said on the House floor on Thursday.  

Not helping matters for Mr McCarthy is former president Donald Trump, to whom many of the conservatives are loyal. Trump, who has been in regular contact with the Speaker, has said the US should default rather than accept a bad deal.

Democratic opposition

Mr Jeffries will have his own challenge getting 106 or more Democrats to back the deal, even with Mr Biden’s imprimatur on it. 

Democrats like Ms Rosa DeLauro, the senior member on the House Appropriations Committee, have complained publicly about being sidelined and have condemned any cuts to social programmes as “unacceptable”. Congressional Progressive Caucus head Pramila Jayapal said there would be street protests if social services were to be cut. 

The expanded work requirements for the Supplemental Nutrition Assistance Programme could pose a challenge for Mr Jeffries, who has called such requirements a “non-starter” for House Democrats. 

The arm-twisting challenge is exacerbated for House leaders because most lawmakers are out of town for a holiday weekend and not due to return until Monday night or Tuesday morning. 

“That’s always more difficult when they are away,” Mr McCarthy acknowledged. 

Assuming the House passes the Bill on the first try, it will head to the Senate around midweek. There, days of procedural hurdles are likely if Mr Lee makes good on his threat to hold things up. That easily takes voting right into the weekend, and the US right to the brink. BLOOMBERG