Kevin McCarthy leans on ‘five families’ as House GOP plots debt-limit tactics

By Manu Raju and Melanie Zanona, CNN

The White House and Senate Democrats have calculated that Speaker Kevin McCarthy won’t have enough votes to raise the national borrowing limit and will end up caving to their demands to avoid a first-ever debt default — with no strings attached or any conditions whatsoever.

House Republicans are trying to prove them wrong.

Behind the scenes, McCarthy is beginning to chart out a new strategy to ensure the House GOP can muster 218 votes to raise the national debt ceiling and tie that to an array of cuts to federal spending, as the standoff with the White House shows no signs of easing.

In the speaker’s office last week, leaders of the so-called “five families” of the House GOP — representing the various ideological wings of the conference — met for the first time to discuss the range of possibilities and to kick around ideas about raising the debt limit, according to multiple attendees. McCarthy didn’t attend the session but enlisted a close confidant, Louisiana Rep. Garret Graves, to lead the discussions, with top committee chairmen and other members of leadership also participating. Talks are expected to pick up when the House returns from a two-week recess after the Presidents Day holiday.

The goal, according to multiple Republicans, is to begin to develop a consensus about a proposal that can pass the House with GOP votes and strengthen their conference’s negotiating position as Washington stares into a looming debt default this summer. The belief among Republicans is such a plan would force the White House and Senate Democrats to back off their insistence that they will only accept a “clean” debt ceiling increase without any spending cuts attached.

The move gives a window into McCarthy’s management of his razor-thin majority, allowing his most conservative members to try to find consensus with more moderate lawmakers — replicating a dynamic that ultimately allowed him to win the speakership after a messy, 15-ballot fight. But it also is a break to how one of his predecessors, John Boehner, dealt with the debt limit the last-time the country nearly defaulted — in 2011 when many of the decisions were made by the leadership, prompting a revolt among the rank-and-file.

The private GOP talks have been positive so far, attendees said, even as they acknowledged they are in the very early stages, weighing a range of potential budget cuts and not nearing any agreement yet.

Rep. Patrick McHenry, the North Carolina Republican who chairs the House Financial Services Committee, said the meeting amounted to a “healthy discussion” that showed “goodwill” in an effort “to come up with an approach that unifies Republicans and enables us to unlock the rest of the legislative year.”

“That’s the purpose of the conversation: How do you move the debt limit out of the House of Representatives?” McHenry told CNN.

The discussions are expected to run parallel to talks between McCarthy and President Joe Biden, with the speaker making clear he believes the next step will be to continue discussions with Biden. The group could potentially help McCarthy present a GOP proposal to the president in future conversations and help vet any White House offer.

But despite both Biden and McCarthy sounding positive after their first face-to-face encounter earlier this month, there’s been little tangible progress toward finding a deal as Democrats continue to hold firm to their demands to raise the borrowing limit with no horse-trading with Republicans.

Republicans believe that the White House is slow-rolling Biden’s discussions with the speaker in order to ratchet up pressure to pass a clean debt ceiling increase, something McCarthy has publicly and privately rejected.

“They say they don’t want to put the economy in jeopardy,” McCarthy told CNN when asked about the lack of progress with Biden since the last White House meeting. “I think that would be the wrong approach.”

Behind the scenes, McCarthy has been proactive in ensuring regular communication between the five families, a nickname from “The Godfather” of warring New York mob families who tried to maintain the peace.

“There’s a level of trust and engagement within the five families that I have not seen in the previous four years,” said South Dakota Rep. Dusty Johnson, chairman of the Main Street Caucus, a center-right group. “We’re working really well together.”

Rep. Dave Joyce of Ohio, who leads the Republican Governance Group, a middle-of-the-road bloc that is also taking part in the talks, said the group meeting with Graves was “very productive, and we will continue to have those until we come up with something.

Another reason Republicans are eager to outline their vision: Democrats have hammered them for not having a plan — and have tried to speak for them. Indeed, perhaps the most memorable moment of Biden’s State of the Union address was when the president suggested Republicans want to cut Social Security and Medicare, eliciting jeers and boos from GOP lawmakers in the audience.

“It’s intellectually dishonest,” Joyce said, noting that McCarthy has said repeatedly that Medicare and Social Security cuts are off the table.

Some Democrats have speculated that they could peel off at least six House Republicans to back a so-called discharge petition — a lengthy process that forces a bill to the floor if 218 lawmakers sign on — once they get closer to a debt default and still don’t have a resolution.

But moderate Republicans are ruling out using the discharge petition for a clean debt ceiling hike and are insisting on extracting spending cuts in exchange for raising the nation’s borrowing limit — a sign that the conference is in lockstep with McCarthy’s negotiating strategy.

“If it’s tied to a clean debt ceiling, I wouldn’t do that,” said Rep. Don Bacon, who represents a Biden-won district in Nebraska. “The President’s got to give us some compromise.”

Other more centrist members — such as Pennsylvania Rep. Brian Fitzpatrick, who as co-chairman of the bipartisan Problem Solvers Caucus is participating in the debt-ceiling talks with the five families — also have resisted calls to simply raise the debt limit without any conditions.

The hardline House Freedom Caucus, which ended up forcing McCarthy to make key concessions to win the speakership, is one of the five groups taking part in the debt ceiling talks.

Rep. Scott Perry, a Pennsylvania Republican who chairs the group and attended the five families meeting, said there’s a consensus on this point: “We’re not going to accept ‘no negotiation,'” a reference to the White House’s position. “And there’s not going to be a clean debt ceiling, alright?”

South Carolina Rep. Ralph Norman, also a member of the hardline group, agreed.

“We got to get 218,” he said of the early talks. “We’re trying to get the framework. We want all buy in.”

Norman argued that it didn’t make sense for the groups to publicly float competing proposals, even though one of the so-called families, the Republican Study Committee, has outlined its preferred approach, although the group did not lay out specific cuts or spending proposals.

“There’s no sense in us, one group putting something out, another group puts something out,” Norman said.

Norman, who initially opposed McCarthy’s speakership bid but ultimately backed him, said the California Republican’s effort to build consensus has helped his standing within the conference.

“To his credit, Kevin has done a good job of getting us all together and getting us on the same page,” Norman said.

This story has been updated with additional developments.

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CNN’s Morgan Rimmer contributed to this report.