Facing mutiny over debt limit deal, McCarthy touts end to student debt pause

 May 30, 2023

Facing fresh mutiny in the rank over his debt ceiling deal with President Biden, House Speaker Kevin McCarthy (R) touted an end to the pause on student loan payments as a significant concession. 

Under the agreement reached with the White House, borrowers will have to start repaying their loans after August 30. McCarthy says that will save $5 billion per month.

"The pause is gone within 60 days of this being signed. So that is another victory because that brings in $5 billion each month to the American public,” McCarthy told Fox News Sunday. 

Student loan pause

McCarthy and President Biden reached an agreement on the debt limit this weekend that upset members of both parties, with disappointed Republicans saying the deal fails to curtail reckless spending in Washington.

A bill McCarthy passed with Republican support in April would have gutted Biden's sweeping plan to discharge billions in student loan debt, but the final agreement doesn't touch the program.

But, with the Supreme Court likely to strike down the relief plan as Biden pursues re-election, his concession on the pause means he cannot extend it again as a sop to his base.

The White House sought to downplay Biden's concession, saying he already signaled months ago that the most recent extension would be the last. But the debt limit deal ensures that Biden will keep his promise, McCarthy said.

"The Supreme Court is taking up that case. But if the Supreme Court came back and said that was unconstitutional, the president could still say he’s pausing, not waiving it," he said. "But now that this is in law, the Supreme Court decision will have to be upheld, that they would have to pay."

Republican mutiny

Still, education Secretary Miguel Cardona said the administration would "ensure a smooth return to repayment process."

He also said the deal "protects our ability to pause student loan payments should that be necessary in future emergencies."

The McCarthy-Biden agreement has reopened divisions within the Republican caucus that had exploded in January when McCarthy had to battle conservative holdouts for their votes in his bid to be Speaker.

Some Republicans have said they will vote no on the deal, which also leaves Biden with the lion's share of $80 billion in new funding for an IRS hiring surge.

"Not one Republican should vote for this deal,” Republican Chip Roy (TX) said. “It is a bad deal.”

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