Staring Down a Debt Crisis, McCarthy Toils to Navigate G.O.P. Divisions

WASHINGTON — It was midway through Representative Kevin McCarthy’s drawn-out battle for the House speakership when Representative Jodey C. Arrington of Texas, one of his public supporters, began quietly approaching colleagues to see whether they would be open to backing his No. 2, Representative Steve Scalise of Louisiana, instead.

The support was not there. When Mr. Arrington, a fourth-term Republican who chairs the Budget Committee, floated the idea with Representative Jim Banks of Indiana, for instance, the answer was a hard no. Mr. Banks promised to lead the opposition if Mr. Scalise tried to mount a serious challenge to Mr. McCarthy, according to two people who said Mr. Banks told them about the incident. They spoke on the condition of anonymity to describe private discussions.

Mr. McCarthy eventually won the speakership and promised not to bear grudges against the right-wing holdouts, who extracted major policy and personnel concessions in exchange for their votes. But the suspicions and divisions exposed during that process remain and are spilling out into the open as Mr. McCarthy faces his most consequential test: reaching a deal with President Biden to avert a catastrophic default on the nation’s debt as soon as this summer.

Mr. McCarthy has told colleagues he has no confidence in Mr. Arrington, the man responsible for delivering a budget framework laying out the spending cuts that Republicans have said they will demand in exchange for any move to increase the debt limit.

Aside from the perceived disloyalty, Mr. McCarthy regards Mr. Arrington, a former official in the George W. Bush administration, as incompetent, according to more than half a dozen people familiar with his thinking, who spoke on the condition of anonymity to describe private conversations.

The tension has burst into public view, contributing to confusion and mixed messages from Republican leaders about what their plan is and when they might be ready to share it.

After Mr. Arrington told reporters he was preparing a “term sheet” detailing a formal list of spending cuts Republicans would demand from the White House in exchange for their support in raising the debt ceiling, Mr. McCarthy publicly undercut him, telling reporters, “I don’t know what he’s talking about.”

Mr. Arrington has since apologized privately to several colleagues for his comment, telling them that he got out over his skis, according to a person briefed on one of the conversations who recounted it on the condition of anonymity. Speaking to reporters outside the Capitol late last month, he appeared intent on not saying too much, stressing that Mr. McCarthy was leading negotiations on the debt limit and that his own role was merely as “one of a handful of advisers.”

The flap reflected the difficulty that Republicans have had in coalescing behind a fiscal strategy that lines up with the many promises Mr. McCarthy made to the hard right to obtain his job and also has the votes to pass a House where they have a minuscule majority. Their promises of balancing the federal budget in 10 years have gone by the wayside, a budget plan has yet to materialize, and they cannot agree on what spending cuts to demand in exchange for raising the debt limit.

Privately, Mr. McCarthy has laid the problems at Mr. Arrington’s feet, mocking his television interviews as unhelpful and venting that he floated dates for rolling out a budget long before Republicans had agreed on the substance of what would be in it.

Asked for comment, Mr. Arrington’s office did not deny the incident with Mr. Banks, who declined to comment. But in a statement, a spokeswoman for the House Budget Committee said Mr. Arrington was focused on one job: “to stop the reckless spending that is bankrupting our country and restore fiscal sanity in Washington before it’s too late.”

The strains between the speaker and his budget chief are just one element of a toxic dynamic in the upper echelons of House Republican leadership that could make it even more difficult to bring together the fractious conference as Mr. McCarthy faces off against Mr. Biden, whom he has rebuked for refusing to meet with him to discuss a fiscal deal.

Mr. McCarthy has told colleagues and allies that he cannot rely on Mr. Scalise, describing the majority leader as ineffective, checked out and reluctant to take a position on anything, according to three Republican lawmakers with direct knowledge of his private comments who spoke on the condition of anonymity to discuss them.

Mr. McCarthy was particularly frustrated with Mr. Scalise after a meeting in his office with his leadership team before a vote last month on the Parents Bill of Rights Act, a centerpiece of the Republican agenda. In the meeting, Mr. Scalise reported that things were going great with the legislation, the speaker later recounted to colleagues. But then Representative Tom Emmer of Minnesota, the Republican whip, piped up with serious concerns among some rank-and-file members, including worries of federal overreach, that could sink the bill.

Ultimately, five Republicans voted against the measure, which was able to squeak through only because of Democratic absences.

In a statement, Mr. McCarthy did not deny any of the episodes but said “I flatly reject” the idea that there are fissures between him and his top lieutenants. He called Mr. Scalise “an essential partner of the entire leadership team” and “integral” to the party’s success. He said that Mr. Arrington’s “work on the budget will only make our conference stronger as we strive to halt reckless government spending and get America back on a sound budgetary track.”

A former leadership aide who remained close to Mr. Scalise insisted that he had discouraged members from floating his name as an alternative to Mr. McCarthy during the speakership vote in January. A spokeswoman, Lauren Fine, did not comment on Mr. Scalise’s relationship with Mr. McCarthy. But she defended the majority leader’s record, noting that five bills he put on the floor had been sent to Mr. Biden’s desk, and two signed into law.

“We’ve matched or exceeded everything that the last Democrat Congress did in their first 100 days with a Democrat Senate and White House,” Ms. Fine said.

Some lawmakers also praised Mr. Scalise, including crediting him with helping to get the parents’ rights bill over the finish line.

“I watched Steve in the well, talking with various members who maybe were not real excited about voting for that bill,” said Representative Virginia Foxx, Republican of North Carolina and the chairwoman of the Education and Labor Committee. “I saw him turn or get some people to vote yes. He is constantly working the floor with members.”

Hostility and tension among congressional leaders who covet one another’s jobs is not unusual. Former Speaker Nancy Pelosi, Democrat of California, and her longtime No. 2, Representative Steny H. Hoyer of Maryland, had a famously antagonistic relationship for decades. For the new and relatively inexperienced House Republican leadership team, the resentments are simmering as they face a more experienced president, a Democratic majority in the Senate and a potentially calamitous debt ceiling crisis.

At the White House and on Capitol Hill, top Democrats have watched the Republican infighting with some degree of satisfaction, believing that the divisions will ultimately weaken the G.O.P.’s position in fiscal talks.

“Where is the House Republican plan?” Senator Chuck Schumer of New York, the majority leader, said last month. “How are they going to lift the debt ceiling?”

He added, “I worry greatly that the dangers of slipping into default will only increase as the toxic dynamic within the House G.O.P. gets worse day by day.”

For now, Mr. McCarthy has been able to hold his conference together, mostly around agenda items that have little chance of passage in a Democratic-controlled Senate. He has courted the hard right and maintained an approval rating among Republican voters that is nearly double that of the Senator Mitch McConnell of Kentucky, the minority leader.

But Mr. McCarthy has had to hold off on trickier endeavors that divide Republicans, including an immigration overhaul and the drafting of a budget measure. He has told allies he does not want to present Mr. Biden with a budget that the president would be able to attack. Instead, the speaker wants to first try to pass a separate bill through the House that would raise the debt ceiling for a limited period in exchange for spending cuts.

Mr. McCarthy floated several broad categories for spending reductions in a letter to Mr. Biden last month but has not detailed specific cuts or the extent to which he would be willing to lift the debt limi. He has acknowledged privately the challenge of getting the necessary 218 votes to pass such a bill.

As he tries to navigate the fissures in his party, Mr. McCarthy is circumventing Mr. Arrington and empowering loyalists like Representative Garret Graves, Republican of Louisiana, whom he credits with helping to deliver him the speaker’s gavel.

Mr. McCarthy has asked Mr. Graves to lead debt ceiling negotiations on his behalf. Mr. Graves has been steering meetings of the so-called five families in the House Republican conference — a reference to the five warring crime families in the film “The Godfather” that reflects the level of feuding in the G.O.P. — to forge an agreement on a package of spending cuts and economic growth policies that could be wrapped into a debt limit bill.

And instead of relying on his official leadership team — with the exception of Mr. Emmer — Mr. McCarthy has turned to allies who helped him win the speakership for his most sensitive assignments and advice. That inner circle includes Representative Patrick T. McHenry of North Carolina, a longtime ally; Representative French Hill of Arkansas, a former banker; Representative Kelly Armstrong of North Dakota, a lawyer whom Mr. McCarthy trusts on legal issues; and Representative Jason Smith of Missouri, the chairman of the Ways and Means Committee.

It remains to be seen whether they can help bail Mr. McCarthy out of an increasingly dire negotiation.

“I’m always an optimist,” Mr. McCarthy told CNBC last week of the stalled debt ceiling talks. “I’m not now.”

Catie Edmondson contributed reporting. Kitty Bennett contributed research.