Hardline Republicans vow to stop ‘bad Bill’ aimed at averting US debt default

Hardline conservatives in the House of Representatives said they will fight to oppose legislation aimed at avoiding a US debt default.

Members of the so-called freedom caucus, or grouping, in the House of Representatives described it as “a bad Bill” which would add $4 trillion (€3.6 trillion) to the US debt.

The chairman of the caucus, Scott Perry, said: “We will do everything in our power to stop it.”

Another member of the caucus, Chip Roy, said there would be “a reckoning” unless the Bill was defeated – comments viewed as suggesting that the position of the speaker of the House of Representatives, Kevin McCarthy, could face a challenge. Mr McCarthy was elected in January after 15 votes after reaching an agreement with right-wing elements of his parliamentary party.

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The new Bill to prevent a debt default would put into law a deal agreed at the weekend between US president Joe Biden and Mr McCarthy.

It would lift the ceiling on the amount the US federal government can borrow and allow it to continue to pay its bills in return for spending restrictions and other concessions.

The deal agreed between Mr Biden and Mr McCarthy is scheduled to begin its journey through the US Congress on Tuesday.

Initially it has to pass through the House of Representatives’ rules committee before it can get to the floor of the chamber for a vote on Wednesday.

[ European stocks slip as many markets closed and investors mull US debt-ceiling deal ]

In normal circumstances the rules committee is a rubber-stamp process as it is controlled by the speaker of the House. However, its membership includes a number of hardline Republicans who argue that the deal does not go far enough to cut government spending.

Progressives in the Democratic Party are also unhappy with elements of the Bill including new work requirements for those accessing federal government supports for low-income Americans such as the food stamps programme.

Republican leaders in recent days have appeared confident that they will have the votes to pass the Bill in the House of Representatives on Wednesday.

Ultimately it may need the support of centre-ground Republicans and Democrats if it is to get through the House of Representatives.

At a press conference on Tuesday members of the freedom caucus expressed scepticism that the US would actually default on its debts if the borrowing ceiling was not increased immediately.

“We are not going to default. We are taking in record revenues,” said Mr Perry. “There was no chance of ever defaulting, not paying on our debt, not paying social security, not paying Medicare, not paying veterans’ benefits. That was never going to happen. This is a scare tactic. What this Bill does is lead to an eventual complete default of the United States. That’s what it does, and that’s why we’re opposed to it.”

The Bill, if passed by the House of Representatives, will then have to go before the US Senate before it could come into law.

Some conservative Republicans in the Senate have already expressed their opposition to the Bill and could seek to delay its passage.

[ Thorny issues remain in US debt-ceiling talks, key Republican says ]

The deal to raise the limit on the amount the US government can borrow was agreed on Saturday night after days of negotiations between the parties’ representatives.

Treasury secretary Janet Yellen had warned on Friday that the US government could run out of money to pay its bills by June 5th unless the limit was raised.

Such a move would have resulted in a US default, which the White House has argued would lead to economic turmoil domestically and around the world.

Central to the proposed package is a two-year budget deal that would hold spending flat for 2024 and increase it by 1 per cent for 2025 in exchange for raising the debt limit for two years.

Military spending will increase at a higher rate.

The agreement also involves raising the age for existing work requirements for able-bodied adults without children to access some social programmes from 49 to 54.