House Freedom Caucus Presses McCarthy to Add Conditions to Debt Ceiling Deal

By Lawrence Wilson
Lawrence Wilson
Lawrence Wilson
Lawrence Wilson covers politics for The Epoch Times.
May 25, 2023Updated: May 26, 2023

As negotiators are nearing an agreement to increase the nation’s debt ceiling, conservative House Republicans have urged House Speaker Kevin McCarthy (R-Calif.) to add to their demands on President Joe Biden rather than making concessions in order to close the deal.

Negotiators from both sides have been meeting intensely for the past two weeks to forge a compromise that will forestall a first-ever default on the country’s financial obligations.

Biden’s starting position was that Congress has a constitutional duty to increase the debt ceiling so the government can fully meet its financial obligations. McCarthy said there would be no increase in the debt limit without some concession on spending, and that Republicans would not agree to any tax increases.

Biden released his draft budget on March 9. House Republicans passed the Limit, Save, Grow Act on April 26, which offered a $1.5 trillion increase in the debt ceiling in exchange for spending cuts and other measures.

House Freedom Caucus Holds News Conference On Biden Administration's Performance
Rep. Scott Perry (R-Pa.), chairman of the House Freedom Caucus, speaks to reporters in Washington on Feb. 28, 2022. (Drew Angerer/Getty Images)

Both leaders agreed that defaulting on the debt was not an option. Both acknowledged the need for give-and-take in order to reach a compromise acceptable to both sides.

Negotiators could reach an agreement as early as May 26, McCarthy allowed during a May 25 television interview with Fox News.

Eleventh Hour Demands

Fearing that McCarthy may be too willing to make concessions, the House Freedom Caucus (HFC) wrote to the speaker on May 25, asking him to double down on the provisions of the Limit, Save, Grow Act and add two more demands in exchange for agreeing to raise the debt limit. Those two demands are that the president accept the recently passed Secure the Border Act, and that he scrap funding for a new FBI headquarters.

If the debt limit is not raised, the government could lack the funds to pay all of its obligations in early June, possibly as early as June 1, according to Treasury Secretary Janet Yellen.

House Freedom Caucus members questioned whether Yellen’s prediction was accurate. They asked McCarthy to demand that the Treasury “immediately furnish a complete justification of the June 1 projection” along with their plan for handling payments after that date.

McCarthy has stated that he accepts Yellen’s forecast, as has Rep. Patrick McHenry (R-N.C.), chairman of the House Financial Services Committee and a lead Republican negotiator on the debt ceiling.

To extend the default deadline through the end of June, caucus members also urged the speaker to combine two money-saving provisions of the Limit, Save, Grow Act and move them through the House immediately. Those are the clawback of unspent COVID-19 relief funds and the repeal of funding for hiring of 87,000 IRS agents over the next decade.

“We passed a trillion-and-a-half-dollar debt ceiling increase for a laundry list of things that we think will actually transform the country fiscally and in terms of standing up for hardworking families,” Rep. Chip Roy (R-Texas) told reporters on May 25.

“Now what we’re talking about, allegedly, is a $3.5 [trillion] to $4 trillion debt ceiling increase for a whole lot less of those things,” Roy added. “That does not seem to me to meet what our expectations are in terms of the transformative, substantive fiscal reforms necessary to raise the debt ceiling, $4 trillion.”

Epoch Times Photo
House Speaker Kevin McCarthy (R-Calif.) speaks to the press at the White House on May 22, 2023. (Madalina Vasiliu/The Epoch Times)

Asked what agreement on lifting the debt ceiling would be acceptable, Rep. Byron Donalds (R-Fla.) said, “The one that the House passed. That’s acceptable to me. A majority of members say it’s acceptable as well.

“I would love to see the border package associated with it because it would actually take care of two concerns of the American people, not just one,” Donalds added.

A bill passing the House would also have to be approved by the Senate, where Sen. Mike Lee (R-Utah) has threatened to delay any deal that does meet his criteria for substantive reform.

“I will use every procedural tool at my disposal to impede a debt-ceiling deal that doesn’t contain substantial spending and budgetary reforms. I fear things are moving in that direction. If they do, that proposal will not face smooth sailing in the Senate,” Lee wrote on Twitter on May 25.

Deal Forthcoming

Biden and McCarthy conferred by video call on the morning of May 25, and the president later said negotiations were moving forward.

“Speaker McCarthy and I have had several productive conversations, and our staff continue to meet, as we speak as a matter of fact, and they’re making progress,” Biden said during a White House ceremony.

Biden has offered a proposal to Republicans that would cut spending by more than $1 trillion and freeze spending for two years, he said.

McCarthy has insisted that the country spend less in 2024 than in 2023. In an interview on the morning of May 25, McCarthy told reporters from Fox News that he was seeking an “agreement worthy of the American public.”

The House will be in recess from May 26 through June 4, though members are prepared to return on 24-hours’ notice if needed. The Senate is currently in recess and scheduled to return on May 30.

Jackson Richman contributed to this story.