House Republicans in the US have narrowly passed sweeping legislation that would raise the government’s legal debt ceiling by 1.5 trillion dollars, in exchange for steep spending restrictions.
The move represents a tactical victory for speaker Kevin McCarthy as he challenges President Joe Biden to negotiate and prevent a catastrophic federal default this summer.
Mr Biden has threatened to veto the Republican package, which has almost no chance of passing the Democratic Senate anyway, and the president has so far refused to negotiate over the debt ceiling which the White House insists must be lifted with no strings to ensure America pays its bills.
But Mr McCarthy’s ability to swiftly unite his slim majority and bring the measure to passage over opposition from Democrats and even holdouts in his own party gives currency to the Republican speaker’s strategy to use the vote as an opening bid forcing Mr Biden into talks. The two men could hardly be further apart on how to resolve the issue.
“We’ve done our job,” Mr McCarthy said at the US Capitol after the vote.
“The president can no longer ignore by not negotiating,” he said. ”Now he should sit down and negotiate.”
As the House debated the measure, Mr Biden on Wednesday indicated he was willing to open the door to talks with Mr McCarthy, but not on preventing a first-ever US default that would shake America’s economy and beyond.
“Happy to meet with McCarthy, but not on whether or not the debt limit gets extended,” Mr Biden said. “That’s not negotiable.”
Passage of the sprawling 320-page package in the House is only the start of what is expected to become a weeks-long political slog as the president and Congress try to work out a compromise that would allow the nation’s debt, now at 31 trillion dollars, to be lifted to allow further borrowing and stave off a fiscal crisis.
The nation has never defaulted on its debt, and the House Republican majority hopes to manoeuvre Mr Biden into a corner with its plan to roll back federal spending to fiscal 2022 levels and cap future spending increases at 1% over the next decade, among other changes.
“This Bill is unacceptable, it’s unreasonable, it’s unworkable, it’s unconscionable — and it’s un-American,” said the Democratic leader Hakeem Jeffries of New York.
Democrats derided the Republican plan as a “ransom note,” a “shakedown” and “an unserious Bill” that was courting financial danger.
In a statement late on Wednesday, the White House press Secretary Karine Jean-Pierre said congressional Republicans “must act immediately and without conditions to avoid default”, adding: “That is their job.”