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Top US Republican McCarthy urges support for debt ceiling deal ahead of key vote

Kitco News

WASHINGTON, May 30 (Reuters) - Top congressional Republican Kevin McCarthy on Tuesday urged members of his party to support a bipartisan deal to lift the $31.4 trillion U.S. debt ceiling, ahead of a critical procedural vote.

The gatekeeper House of Representatives Rules Committee is due to consider the 99-page bill beginning at 3 p.m. EDT (1900 GMT) on Tuesday, ahead of votes in the Republican-controlled House of Representatives and the Democratic-controlled Senate.

Both Democratic President Joe Biden and House Speaker McCarthy have predicted that they will get enough votes to pass it into law before June 5, when the U.S. Treasury Department says it will not have enough money to cover its obligations.

McCarthy called the bill the "most conservative deal we've ever had."

Not all of his caucus agrees, and he faced a direct challenge on Tuesday from two hardline Republicans who he added to the 13-member Rules Committee in January as a condition of winning the speaker's gavel.

The pair, Representatives Chip Roy and Ralph Norman, said they may vote against it if it is not changed to their liking.

Roy said Republicans on the panel had agreed that they would not advance legislation they all did not support, which could potentially torpedo the bill before it comes up for a full vote.

"Right now, it ain't good," Roy said at a news conference.

A third hardliner, Representative Thomas Massie, had hinted on Monday that he might support the package.

"I think it's important to keep in mind the debt limit bill itself does not spend money," he wrote on Twitter. His office declined to comment further.

The four Democrats on the panel typically vote against Republican-backed legislation, but it is not clear whether they would oppose a deal that had been crafted by Biden.

A successful vote there would set up a vote by the full House on Wednesday.

A Senate vote could possibly stretch into the weekend if lawmakers in that chamber try to slow its passage. At least one, Republican Mike Lee, has said he may try to do so, and other Republicans have also expressed discomfort with some aspects of the deal.

The bill would suspend the U.S. debt limit through Jan. 1, 2025, allowing Biden and lawmakers to set aside the politically risky issue until after the November 2024 presidential election.

It would also cap some government spending over the next two years, speed up the permitting process for some energy projects, claw back unused COVID-19 funds, and introduce work requirements for food aid programs for some poor Americans.

In another win for Republicans, it would shift some funding away from the Internal Revenue Service, although the White House says that should not undercut tax enforcement.

Biden can point to gains as well. The deal leaves his signature infrastructure and green-energy laws largely intact, and the spending cuts and work requirements are far less than Republicans had pushed for.

Republicans have argued that steep spending cuts are necessary to curb the growth of the national debt, which at $31.4 trillion is roughly equal to the annual output of the economy.

Interest payments on that debt are projected to eat up a growing share of the budget as an aging population pushes up health and retirement costs, according to government forecasts. The deal would not do anything to rein in those fast-growing programs.

Most of the savings would come by capping spending on domestic programs like housing, education, scientific research and other forms of "discretionary" spending. Military spending would be allowed to increase over the next two years.

The debt-ceiling standoff prompted ratings agencies to warn that they might downgrade U.S. debt, which underpins the global financial system.

Markets have reacted positively to the agreement so far.

Reporting by Moira Warburton, David Morgan, Richard Cowan and Gram Slattery; Writing by Andy Sullivan; Editing by Scott Malone, Matthew Lewis and Mark Porter
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