After impeachment move, McCarthy struggles to avert US government shutdown

By David Morgan

WASHINGTON (Reuters) - A day after opening an impeachment inquiry into President Joe Biden, U.S. House of Representatives Speaker Kevin McCarthy on Wednesday faced a new test of whether his slim Republican majority can enact its own spending legislation and avoid a looming government shutdown.

Less than two hours before the House was due to hold an afternoon vote on whether to open debate on an $886 billion defense appropriations bill, Republican leaders were forced to postpone it in the face of opposition from hardline conservatives.

Members of the House Freedom Caucus and other conservatives have vowed not to support spending measures until McCarthy agrees to limit fiscal 2024 spending to a 2022 level of $1.47 trillion, $120 billion below the level he agreed to with Biden in May.

"We're working through it," McCarthy told reporters after the expected procedural vote on defense appropriations disappeared from the House's legislative schedule.

Asked if he had discussed a top-line number with the hardliners, McCarthy said, "I have spent more than two months with them on it."

House Republicans need to agree on a full slate of 12 spending bills to fund the government in fiscal 2024, which begins on Oct. 1, and begin negotiating with the Democratic-led Senate on compromise legislation that Biden can sign into law.

"We're in a difficult spot. We got a big challenge ahead of us," said Representative Steve Womack, an appropriator who expressed concern that a defense spending vote could fail.

With a 222-212 majority, McCarthy cannot afford to lose more than four Republican votes on legislation opposed by the Democrats. On Wednesday, that margin of error was expected to be even slimmer because of two absences due to illness and injury.

Following weeks of pressure from hardliners and allies of Republican former President Donald Trump, McCarthy on Tuesday announced a formal impeachment inquiry into the Democratic president. The move sidestepped as many as 20 House Republicans opposed to the action by avoiding a floor vote on whether to launch the inquiry that likely would have failed.

'LET'S DO IT'

House hardliners also are pressing McCarthy to avoid any short-term stopgap spending measure to keep federal agencies afloat that fails to include border security provisions and other conservative priorities.

"The thing that's keeping us from moving is what's going on with what House Republicans are doing with these bills," said Representative Rosa DeLauro, top Democrat on the House Appropriations Committee. "We're ready. Let's do it."

Political brinkmanship already has prompted the Fitch rating agency to downgrade U.S. debt to AA+ from its top-notch AAA designation, partly because of repeated down-to-the-wire negotiations that threaten the government's ability to pay its bills.

Bad blood between Democrats and Republicans over the impeachment drive will not make negotiations any easier.

Before the delay on the defense measure, McCarthy proposed moving forward next with appropriations bills on homeland security with supplemental aid for disaster-stricken U.S. communities attached, and foreign operations.

"A lot of members (of the House) are very intrigued by the speaker's suggestion. They think it's the right way to move forward," Republican Representative Dusty Johnson said. "There's a lot of momentum behind it."

Hardline Representative Matt Gaetz raised the possibility of ousting McCarthy for not showing more progress on single spending bills and failing to move forward on other terms of a deal he made to become speaker, which gave any one House member the power to call a vote for his removal.

"The path forward for the House of Representatives is to either bring you into immediate, total compliance or remove you," Gaetz said in a Tuesday floor speech addressing McCarthy directly.

Some hardliners have made it clear how strongly disappointed they would be if McCarthy decided to avoid a government shutdown, with support from House Democrats.

"It would be a sad day for the country if he does that," said Representative Ralph Norman, a prominent member of the Freedom Caucus.

(Reporting by David Morgan; additional reporting by Richard Cowan and Makini Brice; Editing by Scott Malone, Stephen Coates and Will Dunham)