After overcoming internal divisions, the Republican-led House of Representatives approved a bill on Wednesday led by House Speaker Kevin McCarthy that links lifting the country's debt ceiling with spending cuts and a series of GOP policy changes.
The bill's passage comes after Republican leaders met overnight to address concerns from several GOP members, including eliminating the plan's original aim to repeal tax credits for ethanol productions. That provision was ultimately removed.
McCarthy and his top vote counter, Rep. Tom Emmer, R-Minn., both worked into Wednesday to secure the votes to pass the Limit, Save and Grow Act of 2023. The speaker argued changes to the plan were minor.
"What you have to look at... were technical changes," McCarthy told reporters. "We didn't change the bill overall."
McCarthy had earlier on Tuesday insisted he would not make any changes to the bill. However, a group of midwestern lawmakers descended on his office to voice opposition to the bill's provision to repeal tax credits for ethanol production, arguing farmers in their districts rely on them. Separately some conservatives pushed leaders to ramp up work requirements for adults without dependents who receive safety net assistance like food stamps.
Wisconsin Rep. Derrick Van Orden, who led the effort to preserve the ethanol credit, told NPR he would back the package and stressed the bill would help boost the speaker's leverage with President Biden.
"It is our responsibility to get Kevin McCarthy to the table with Joe Biden," Van Orden said, adding then it's McCarthy's "burden" to get the president to a place where they can work on the country's fiscal future.
Rep. Scott Perry, R-Pa., the chair of the House Freedom Caucus, a bloc of conservatives, told reporters the changes were a "balance" and he would back the bill. "The popular wisdom is we're supposed to be on defense here in the House; we're going to be on offense I think," he said.
With just a razor-thin majority, Republicans couldn't afford to lose more than a handful of votes.
Rep. Tim Burchett, R-Tenn., who voted against the bill told reporters earlier he was planning to vote no and the only thing that would move him would be "true debt reduction, not rate of growth."
As the day continued, one by one, some of the key holdouts said they would move to support the legislation after negotiations with McCarthy and others. Among them was Rep. Nancy Mace, R-S.C., who said she was a "yes" after meeting with McCarthy Wednesday afternoon.
Earlier, Mace had criticized the proposal, pushing for a commitment from GOP leadership on a plan to reduce the deficit over time. After her meeting with the speaker, she said he assured her Republicans would work in the future towards a balanced budget.
"I feel heard by the speaker, I will support the debt ceiling vote today," Mace said.
The challenges highlight the narrow path McCarthy faces to pass major legislation with a slim majority. He'll face a much tougher battle to pass a bipartisan plan to address the debt limit to avoid a financial default for the country.
The Republican bill is not expected to advance in the Senate, where Senate Majority Leader Chuck Schumer of New York and other top Democrats have labeled key provisions in the bill "nonstarters."
McCarthy's strategy to muscle the proposal through the House on a largely party-line vote is to force Biden back to the negotiating table. The two have not had an extended discussion about the issue since February 1.
The president and top congressional Democrats have insisted for months that they would not accept anything except a clean bill to increase the nation's borrowing authority. They maintain any demands to attach spending cuts or provisions to unwind provisions of President Biden's energy or climate proposals threatens a possible default, which could send the financial markets reeling.
What's in the GOP bill
The House GOP bill raises the nation's borrowing authority by $1.5 trillion, or through March 2024 — whichever comes first. It rolls back spending levels for most federal programs to those in place two years ago. The measure limits the growth of federal spending to 1% annually.
The bill's framework reflects a series of demands from a bloc of hard line GOP lawmakers who opposed his election as speaker in January and pushed for commitments for how to handle negotiations on the debt limit. After five days and 15 votes, many of his detractors backed his bid, or voted present after McCarthy pledged he would not allow a House vote on a bill to increase the country's borrowing authority without federal spending reductions.
McCarthy also vowed the House would approve a budget that would balance in 10 years, but negotiations inside the House GOP conference over a budget resolution have stalled without agreement. Instead, McCarthy decided to move a separate debt bill with other policy items House Republicans have championed. The bill includes provisions to speed permitting of new energy projects, roll back Biden's student loan forgiveness program and claw back unspent federal COVID-19 money.
Pressed by conservatives, the legislation also includes new requirements for adults without dependents who are recipients of federal safety net programs like food stamps and Medicaid. It would increase — from 50 to 56 years old — the age limit of those subject to food stamp work reporting requirements. Failing to report working a minimum of 20 hours a week for a three-month period would trigger a removal from the program. A change made late Tuesday night would put these requirements in place beginning in 2024, a year earlier than the initial version of the bill specified.
When asked about possible political blowback from adding work requirements to a bill that wasn't expected to move in the Senate, Rep. Bryan Steil, R-Wisc., told reporters a recent state referendum on the issue proves the policy has broad support, He said "80% of the people that voted in the state of Wisconsin - a 50-50 state - said yeah, we should be able to have work requirements for able-bodied childless adults. I don't think it's a political loser at all."
The bill would also repeal key provisions of the Inflation Reduction Act — the signature bill of the president's term that funds climate, health care and energy programs.
President Biden has threatened to veto the package
The White House issued a statement vowing President Biden would veto the bill if it reached his desk.
McCarthy has waved off the veto threat to reporters, saying the president also vowed to oppose GOP bills to end the pandemic and block a D.C. crime bill, but he later supported their measures.
Republican's passage of their debt limit bill also increases pressure on the president to relent and start talks on what a compromise package could look like. Both parties insist defaulting on the country's debt is not an option.
Biden told reporters as he was walking away from a press conference on Wednesday that he was willing to meet with McCarthy, but not on whether or not the debt limit is extended.
"That's not negotiable," Biden said.
On Tuesday, Biden made a point to criticize the House GOP legislation in a speech to labor union members. He said McCarthy's package included "huge cuts in important programs" that many in the middle class depend on while preserving tax cuts for the wealthy. The White House argued the plan amounts to "the same old trickle down dressed up in MAGA clothing."
Fitch Ratings released new analysis on Tuesday suggesting the escalating political fight over the debt limit could have an impact.
"Repeated near-default episodes brought on by debt limit debates could erode confidence that the U.S. government's repayment capacity is resilient to political dysfunction and may affect Fitch's view of the sovereign credit profile."
NPR's Ximena Bustillo, Barbara Sprunt and David Gura contributed to this story.
