US debt ceiling deal gets thumbs up from business, jeers from some on the right

US President Joe Biden hammered out an 11th hour agreement with the Speaker of the House, Republican Kevin McCarthy - but some in McCarthy's party are set to vote against the deal. Photo / AP

The reviews are starting to come in as details emerge about the debt ceiling agreement reached by President Joe Biden and House Speaker Kevin McCarthy.

Already, some lawmakers are criticizing the deal as not doing enough to tackle the nation’s debt, while others worry it’s too austere and will harm many low-income Americans.

The legislation will likely need support from a significant number of lawmakers from both parties to clear the closely divided House and gain the 60 votes necessary to advance in the Senate.

Final text of the agreement is expected Sunday. Many lawmakers say they are withholding judgment until they see the final details.

A look at how the agreement is going over so far:

Early concerns

Some of the earliest objections are coming from the most conservative members of Congress, particularly members of the hardline House Freedom Caucus that often clashes with GOP leadership.

“I think it’s a disaster!” tweeted Matt Rosendale, Republican from Montana

“Fake conservatives agree to fake spending cuts,” tweeted Sen. Rand Paul, Republican from Kentucky.

“This ‘deal’ is insanity,” tweeted Rep. Ralph Norman (Republican, South Carolina) “A $4T debt ceiling increase with virtually no cuts is not what we agreed to. Not gonna vote to bankrupt our country. The American people deserve better.”

GOP leaders knew all along that they would lose some members’ support in any compromise with a Democratic-led White House and Senate. The question has always been whether the deal would pick up enough Democratic support to offset those defections.

Democrats weigh in

As much as some Democrats dislike what is roughly a spending freeze on non-defense programs next year and chafe at work requirements being extended to more food stamp recipients, initial reaction has been circumspect as they await more details.

Rep. Annie Kuster (Democrat, New Hampshire), and chair of a centre-left group known as the New Dems, which has roughly 100 members, said they are “confident” that White House negotiators delivered a “viable, bipartisan solution to end this crisis.”

The likeliest opposition will come from the more liberal members of the caucus. Rep. Pramila Jayapal, a Democrat from Washington, has been voicing vocal opposition to additional work requirements for some of those getting food and cash assistance. She called it terrible policy Sunday on CNN’s “State of the Union.”

But she said she is also waiting for the legislative text to determine the level of exemptions to the work requirements that Biden was able to win for veterans, the homeless and people coming out of foster care.

“And so what do the numbers look like at the end of the day, I’m not sure. However, it is bad policy. I told the president that directly when he called me last week on Wednesday that this is saying to poor people and people who are in need that we don’t trust them,” said Jayapal, who serves as chair of the Congressional Progressive Caucus.

Asked if the Democrats at the White House and in leadership have to worry about whether the progressive caucus will support the bill, Jayapal said: “Yes, they have to worry.”

Business group backing

With the nation roughly a week away from the risk of a default that could roil the global economy, major business groups have been urging Washington to quickly on a debt-ceiling increase.

The Business Roundtable, a group of more than 200 chief executive officers, called on Congress to pass the bill as soon as possible.

“In addition to raising the debt ceiling, this agreement takes steps toward putting the U.S. on a more sustainable fiscal trajectory. This deal also makes a down payment on permitting reform, helping to clear the path for new energy infrastructure projects,” said the group’s CEO Joshua Bolten.

The US Chamber of Commerce also urged a yes vote and noted that the vote will be included when the group rates or “scorecards” members of Congress based on how they vote on business priorities.

Economists have been clear that the economy would be roiled with even a short-term breach in the nation’s ability to fully pay its bills as interest rates would rise and financial markets swoon.

“The gravity of this moment cannot be overstated,” said Suzanne Clark, the business group’s president and CEO.

Watchdog groups approve

Some advocacy groups have long warned of the propensity of Congress to enact policy priorities without fully paying for them. Their concerns generally go unheeded. But some see the agreement as a step in the right direction.

The Committee for a Responsible Federal Budget noted that if the legislation passes, it would be the first major deficit-reducing budget agreement in almost a dozen years.

“The process was tense, risky and ugly, but in the end, we have a plan to enact savings and lift the debt ceiling, and that is what is needed,” said Maya MacGuineas, the group’s president.