Speaker McCarthy defends budget compromise as conservatives balk: 'A step in the right direction'

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Biden, McCarthy reach 'agreement in principle' in debt ceiling negotiations

Fox News senior congressional correspondent Chad Pergram has more on the tentative debt ceiling agreement and what to watch for in the coming days.

House Speaker Kevin McCarthy defended his budget deal with President Biden against conservative critics on Sunday.

McCarthy, R-Calif., faced attacks from members of the House Freedom Caucus after unveiling an "agreement in principle" with the White House this weekend. The speaker acknowledged that conservatives may not have gotten everything they wanted from the legislation, but argued Democrats got nothing at all.  

"Maybe it doesn't do everything for everyone, but this is a step in the right direction that no one thought that we would be able to today," McCarthy told "Fox News Sunday," going on to tout that his legislation cuts all funding increases for the IRS in 2023.

"I'll debate this bill with anybody," he continued. "Is it everything I wanted? No, because we don't control all of it. But it is the biggest recission in history. It is the biggest cut Congress has ever voted for in that process."

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House Speaker Kevin McCarthy is facing criticism from conservative members of the GOP conference over his budget negotiations with President Biden. (AP Photo/J. Scott Applewhite)

The deal would claw back some unspent COVID-19 pandemic funds and provide a cut from funding granted to the IRS in President Biden's Inflation Reduction Act, multiple sources have told Fox News. It would also suspend the debt limit until after the 2024 presidential election.

McCarthy says the bill will sit for public review for 72 hours before coming up for a vote in the House.

Some members of the GOP caucus expressed frustration with the current state of negotiations, however. Rep. Andrew Clyde, R-Ga., said he was a "hard pass" on the deal as it stands.

"A $4 trillion debt ceiling increase? With virtually none of the key fiscally responsible policies passed in the Limit, Save, Grow Act kept intact? Hard pass. Hold the line," he tweeted.

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President Joe Biden has come to a tentative agreement with Speaker McCarthy to raise the debt ceiling. (Celal Gunes/Anadolu Agency via Getty Images)

Rep. Dan Bishop, R-N.C., described the plan as "utter capitulation" earlier this weekend.

Rep. Chip Roy, R-Texas, also laid out criticism of the bill early Sunday morning, saying it does virtually nothing to roll back Biden's expansion of the IRS.

While McCarthy touted canceling the IRS's $1.8 billion funding expansion in 2023, critics pointed out that it was only a small fraction of the $80 billion in funds the IRS was set to receive in the coming years. McCarthy argued those funding increases could be canceled on a yearly basis if Republicans maintain the majority.

Rep. Chip Roy says Speaker McCarthy hasn't done enough to cut IRS expansion in his budget negotiations with President Biden. (Bill Clark/CQ-Roll Call, Inc via Getty Images)

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McCarthy told Fox News that the opposition from the GOP members was not a problem, "because more than 95% of all those in the conference were very excited."

Fox News' Chad Pergram contributed to this report.