McCarthy's existential test
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House Speaker Kevin McCarthy (R-Calif.) at the New York Stock Exchange. Photo: Michael Nagle/Bloomberg via Getty Images
One-hundred days after becoming House speaker, Rep. Kevin McCarthy (R-Calif.) announced he will hold a debt-ceiling vote that could serve as the sequel to his historic — and chaotic — quest for the gavel.
Why it matters: Unlike January's speaker election, in which GOP unity and McCarthy's personal ambitions were the main assets at stake, the House's vote "in the coming weeks" could determine whether the U.S. economy averts a catastrophic default.
- That outcome will depend on McCarthy's ability to unite the fractious Republican conference around a plan — the full details of which have not been unveiled — to cut spending and lift the debt ceiling into next year.
- Failure to do so could cost McCarthy the job he spent four days, 15 ballots and massive political capital attempting to secure — and hand Democrats new leverage to pass a "clean" debt ceiling hike.
Driving the news: Addressing the New York Stock Exchange on Monday, McCarthy said the House would vote on a bill to hike the debt ceiling, "save taxpayers trillions of dollars, make us less dependent on China, and curb high inflation — all without touching Social Security or Medicare."
- The Biden administration and top Democrats, who have refused to negotiate over spending cuts as long as the GOP ties them to raising the debt ceiling, quickly attacked McCarthy over the lack of details in his plan.
- "I’ll be blunt: If Speaker McCarthy continues in this direction, we are headed toward a default," warned Senate Majority Leader Chuck Schumer (D-N.Y.).
State of play: McCarthy dodged when asked after the speech if his plan actually has the support of the GOP conference, telling CNBC: "I think I have the support of America because I'll get the party behind it."
- He later told CNN that he believes Republicans have the necessary 218 votes to raise the debt ceiling.
- An Axios analysis found that 16 of the 222 House Republicans have never voted to raise the debt ceiling — even under former President Trump.
Between the lines: McCarthy's position as speaker has been inextricably tied to the debt-ceiling fight since Day 1, after right-wing rebels forced him to agree to only hike the debt ceiling only if it were paired with spending cuts.
- The Freedom Caucus, which is comprised of many of those rebels, has sought to assert control over the negotiations by releasing its own aggressive preconditions for raising the debt ceiling.
- "The fight’s just begun — the speaker’s fight was a preview," Freedom Caucus member Rep. Chip Roy (R-Texas) told donors last week. "If you think it was hot then, the debt-ceiling fight is going to get a lot hotter."
Behind the scenes: One of the major unresolved sticking points within the House GOP is whether to punt the debt limit by a year or past the 2024 election.
- Other tensions include whether to repeal Biden administration policies from the Inflation Reduction Act and how far to push on certain cuts, especially as they relate to defense spending.
- Tuesday's GOP conference meeting is expected to be critical, two House Republicans told Axios.
What they're saying: Quoting Babe Ruth, McCarthy told his Wall Street audience: "You just can’t beat the person who never gives up."
- "If there's one thing I hope America has learned about me in the last 100 days and my race to become speaker: I will never give up."
