Politics

By Jack Queen and Luc Cohen

NEW YORK (Reuters) -A civil fraud trial that could deal a major blow to Donald Trump’s real estate empire began on Monday, with a New York state lawyer accusing the former president of generating more than $1 billion by lying, and Trump blasting the case as a “scam.”

The trial in a downtown Manhattan courtroom case concerns accusations by state Attorney General Letitia James that Trump inflated his assets and his own net worth from 2011 to 2021 to obtain favorable bank loans and lower insurance premiums.

James is seeking at least $250 million in fines, a permanent ban against Trump and his sons Donald Jr and Eric from running businesses in New York and a five-year commercial real estate ban against Trump and the Trump Organization.

Trump looked on with his arms crossed are Kevin Wallace, a lawyer in James’ office, called Trump “materially inaccurate” in describing his finances to banks and insurers.

“This isn’t business as usual, and this isn’t how sophisticated parties deal with each other,” Wallace said in his opening statement. “These are not victimless crimes.”

Christopher Kise, a lawyer for Trump, countered in his opening statement that the financials for Trump and the Trump organization were entirely legal.

“It is one of the most highly successful brands in the world, and he has made a fortune literally being right about real estate investments,” Kise said. “There was no intent to defraud, there was no illegality, there was no default, there was no breach, there was no reliance from the banks, there were no unjust profits, and there were no victims.”

Trump holds a commanding lead over rivals for the 2024 Republican presidential nomination.

He wore a dark blue suit, a brighter blue tie and an American flag pin on his lapel, and told reporters before entering the courtroom that the case was a “scam,” a “sham,” and “a continuation of the single greatest witch hunt of all time.

“We have a great company. I built a great company. It’s tremendous,” Trump said. “It’s got some of the greatest real estate assets in the world. And now I have to go in before a rogue judge.”

James said her office was ready to prove its case.

“The law is both powerful and fragile,” she said before entering the courtroom. “No matter how much money you think you may have, no one is above the law.”

MANY LEGAL WOES

Trump’s trial is overseen by Justice Arthur Engoron, who will hear evidence without a jury.

It largely concerns penalties that Trump, his adult sons and 10 of his companies must face after Engoron last week found them liable for fraud.

Before opening arguments, Engoron described himself as a generalist on the law. “One thing I know a lot about is the definition of fraud,” he said.

In his Sept. 26 decision, Engoron described in scathing terms how the defendants made up valuations.

That included Trump calculating the value of his apartment in Trump Tower as if it were three times its actual size, and listing his Mar-a-Lago estate as being worth up to $739 million though deed restrictions capped it at $28 million.

Engoron’s decision also covers several other properties including Trump’s family estate in Westchester County, New York, and various office buildings and golf clubs.

The judge canceled business certificates for companies controlling pillars of Trump’s empire, and said he would appoint receivers to oversee their dissolution.

Trump responded to the decision by calling Engoron “deranged.”

Wallace played an excerpt from a deposition where Michael Cohen, who had been Trump’s personal lawyer and fixer but has since turned against his former boss, said the goal was “to attain the number that Mr. Trump wanted.”

Kise countered that just because people disagree about valuations does not mean one valuation must be fraudulent.

He also said Trump’s banks and insurers knew his valuations were estimates.

“They are not designed to be absolutes,” he said.

The trial is scheduled to run through early December.

More than 150 people including Cohen could testify, though much of the trial may be a battle of experts opining on financial documents.

Trump also faces several other legal headaches, which have been a financial drain, and made him the first sitting or former U.S. president to be criminally charged.

He has been criminally charged in Washington over his efforts to undo his loss in the 2020 presidential election, in Georgia over moves to reverse election results there, in Florida over his handling of classified documents upon leaving office, and in New York over hush money payments to a porn star.

Trump has denied all wrongdoing and pleaded not guilty.

(Reporting by Jack Queen; Additional reporting by Doina Chiacu in Washington; Editing by Noeleen Walder, Cynthia Osterman and Nick Zieminski)

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By Richard Cowan and Moira Warburton

WASHINGTON (Reuters) -U.S. House of Representatives Speaker Kevin McCarthy faced a threat to his leadership on Monday as a right-wing fellow Republican, Representative Matt Gaetz, said he would try to oust him as speaker this week, a move that could plunge Congress into a crisis days after dodging a federal government shutdown.

Gaetz, who has clashed with McCarthy for months, said he would file a motion that would set up a vote to remove McCarthy as speaker.

“We have a lot of folks in Congress who I think would be very capable to serve as speaker. We need to rebuild trust,” Gaetz told reporters.

McCarthy said on Sunday he expected he would survive the threat to his job.

Gaetz, from Florida, was one of more than a dozen Republicans who repeatedly voted against McCarthy’s bid for speaker in January. McCarthy ultimately seized the gavel after 15 rounds of voting.

No U.S. House speaker has ever been removed from the position that puts the holder second in line in succession for the presidency after the vice president.

Gaetz was angered by McCarthy’s move to pass a short-term funding bill on Saturday with support from opposition Democrats to keep the government fully operating and avoid a shutdown. Gaetz and a group of other hardline House Republicans insist on deep spending cuts that Democrats argue would break a deal brokered earlier this year by President Joe Biden and McCarthy.

House Democratic Leader Hakeem Jeffries has not said if his caucus would join right-wing Republicans to help topple McCarthy or if Democrats might support him in exchange for political or legislative favors.

ONGOING BATTLE OVER SPENDING

The House and Senate now have until Nov. 17 to either agree to 12 spending bills for fiscal year 2024 or pass another stopgap measure to avoid shutdowns.

The Republican speaker and his leadership team are hoping to spend this week passing more individual spending bills to fund government programs in the new fiscal year that began on Sunday.

With only four of the dozen annual appropriations bills passed by the House before the start of this new fiscal year, House Majority Leader Steve Scalise, a Republican, has scheduled two more for debate this week.

It was unclear, however, whether the bills to keep federal energy programs operating and the lights on in Congress itself will garner enough Republican support amid a possible wall of opposition from Democrats.

Meanwhile, the Democratic-controlled Senate hoped to resurrect three bills that conservative Republicans blocked quick action on. They would fund federal agencies that run transportation, veterans, housing and agriculture programs that clash with the lower-spending priorities of Republican versions in the House.

Senate Appropriations Committee Chair Patty Murray also has placed a high priority on Congress delivering billions of dollars in new aid to Ukraine in its battle against Russia.

That funding was stripped out of the stopgap funding bill passed by Congress over the weekend amid Republican objections.

(Reporting by Richard Cowan; writing by Andy Sullivan; Editing by Scott Malone Osterman and Alistair Bell)

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By Richard Cowan and Moira Warburton

WASHINGTON (Reuters) -U.S. House of Representatives Speaker Kevin McCarthy faced a threat to his leadership on Monday as a right-wing fellow Republican, Representative Matt Gaetz, said he would try to oust him as speaker this week, a move that could plunge Congress into crisis days after dodging a federal government shutdown.

Gaetz, who has clashed with McCarthy for months, said he would file a motion that would set up a vote to remove McCarthy as speaker.

“We have a lot of folks in Congress who I think would be very capable to serve as speaker. We need to rebuild trust,” Gaetz told reporters.

He did not say who he had in mind, or whether he had the votes to succeed.

McCarthy leads a narrow and fractious 221-212 majority whose members in recent weeks have repeatedly blocked measures he has brought to the House floor, meaning that as few as five defections from his party could threaten his hold on power, if Democrats all vote against him.

McCarthy said on Sunday he expected he would survive the threat to his job.

Gaetz, from Florida, was one of more than a dozen Republicans who repeatedly voted against McCarthy’s bid for speaker in January. McCarthy ultimately secured the gavel after 15 rounds of voting.

No U.S. House speaker has ever been removed from the position that puts the holder second in line in succession for the presidency after the vice president.

Gaetz was angered by McCarthy’s move to pass a short-term funding bill on Saturday with support from opposition Democrats to keep the government fully operating and avoid a shutdown.

Gaetz said he had spoken to former President Donald Trump about his effort. Trump is the leading Republican candidate for the 2024 Republican presidential nomination, despite facing four criminal indictments and several civil cases.

Gaetz and a group of other hardline House Republicans insist on deep spending cuts that would break a deal McCarthy agreed to with President Joe Biden in May, after the U.S. came within days of defaulting on its $31.4 trillion in debt.

DEMOCRATS DEBATE NEXT MOVE

House Democratic Leader Hakeem Jeffries has not said if his caucus would join right-wing Republicans to help topple McCarthy or if Democrats might support him in exchange for political or legislative favors.

Multiple McCarthy moves have angered Democrats: The backing down from the deal with Biden on spending, a decision to launch an impeachment inquiry into Biden without first calling a vote and on Saturday giving Democrats little time to read the stopgap spending bill that he needed their support to pass.

Democrats, in theory, could demand that McCarthy honors his deal with Biden and abandons the effort to cut spending, to drop the impeachment inquiry or seek votes on gun and immigration legislation.

Democrats are due to meet later in the day to weigh their options.

ONGOING BATTLE OVER SPENDING

The House and Senate now have until Nov. 17 to either agree to 12 spending bills for fiscal year 2024 or pass another stopgap measure to avoid shutdowns.

The Republican speaker and his leadership team are hoping to spend this week passing more individual spending bills to fund government programs in the new fiscal year that began on Sunday.

With only four of the dozen annual appropriations bills passed by the House before the start of this new fiscal year, House Majority Leader Steve Scalise, a Republican, has scheduled two more for debate this week.

It was unclear, however, whether the bills to keep federal energy programs operating and the lights on in Congress itself will garner enough Republican support amid a possible wall of opposition from Democrats.

Meanwhile, the Democratic-controlled Senate hoped to resurrect three bills that conservative Republicans blocked quick action on. They would fund federal agencies that run transportation, veterans, housing and agriculture programs that clash with the lower-spending priorities of Republican versions in the House.

Senate Appropriations Committee Chair Patty Murray also has placed a high priority on Congress delivering billions of dollars in new aid to Ukraine in its battle against Russia.

That funding was stripped out of the stopgap funding bill passed by Congress over the weekend amid Republican objections.

(Reporting by Richard Cowan, Makini Brice, Katharine Jackson and Moira Warburton; writing by Andy Sullivan; Editing by Scott Malone, Cynthia Osterman and Alistair Bell)

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By Jack Queen and Luc Cohen

NEW YORK (Reuters) -Donald Trump sat in a Manhattan courtroom on Monday and listened to a New York state lawyer accuse him of generating more than $1 billion by lying about his real estate empire, claims the former president called a “scam.”

The trial in a downtown Manhattan courtroom case concerns accusations by state Attorney General Letitia James that Trump inflated his assets and his own net worth from 2011 to 2021 to obtain favorable bank loans and lower insurance premiums.

James is seeking at least $250 million in fines, a permanent ban against Trump and his sons Donald Jr and Eric from running businesses in New York and a five-year commercial real estate ban against Trump and the Trump Organization.

Trump looked on with his arms crossed are Kevin Wallace, a lawyer in James’ office, called Trump “materially inaccurate” in describing his finances to banks and insurers.

“This isn’t business as usual, and this isn’t how sophisticated parties deal with each other,” Wallace said in his opening statement. “These are not victimless crimes.”

The attorney general has said Trump overvalued assets including his Trump Tower penthouse apartment in Manhattan, his Mar-a-Lago estate in Florida and various office towers and golf clubs, and inflated his own fortune by as much as $2.2 billion.

Christopher Kise, a lawyer for Trump, countered in his opening statement that the financials for Trump and the Trump organization were entirely legal.

“It is one of the most highly successful brands in the world, and he has made a fortune literally being right about real estate investments,” Kise said. “There was no intent to defraud, there was no illegality, there was no default, there was no breach, there was no reliance from the banks, there were no unjust profits, and there were no victims.”

‘WITCH HUNT’

Trump holds a commanding lead over rivals for the 2024 Republican presidential nomination.

He wore a dark blue suit, a brighter blue tie and an American flag pin on his lapel, and told reporters before entering the courtroom that the case was a “scam,” a “sham,” and “a continuation of the single greatest witch hunt of all time.

“We have a great company. I built a great company. It’s tremendous,” Trump said. “It’s got some of the greatest real estate assets in the world. And now I have to go in before a rogue judge.”

James said her office was ready to prove its case.

“The law is both powerful and fragile,” she said before entering the courtroom. “No matter how much money you think you may have, no one is above the law.”

Trump’s trial is overseen by Justice Arthur Engoron, who will hear evidence without a jury. Testimony is expected to begin on Monday afternoon.

The case largely concerns penalties that Trump, his adult sons and 10 of his companies must face after Engoron last week found them liable for fraud.

Before opening arguments, Engoron described himself as a generalist on the law. “One thing I know a lot about is the definition of fraud,” he said.

In his Sept. 26 decision, Engoron described in scathing terms how the defendants made up valuations.

He said this included valuing the Trump Tower apartment as if it were three times its actual size, and estimating that Mar-a-Lago was worth up to $739 million though deed restrictions capped it at $28 million.

The judge canceled business certificates for companies controlling pillars of Trump’s empire, and said he would appoint receivers to oversee their dissolution.

Trump responded by calling Engoron “deranged.”

MANY LEGAL WOES

Wallace played an excerpt from a deposition where Michael Cohen, who had been Trump’s personal lawyer and fixer but has since turned against his former boss, said the goal was “to attain the number that Mr. Trump wanted.”

Kise countered that just because people disagree about valuations does not mean one valuation must be fraudulent.

He also said Trump’s banks and insurers knew his valuations were estimates.

“They are not designed to be absolutes,” he said.

Alina Habba, a lawyer speaking on behalf of some defendants, in a separate opening statement called Trump’s assets “Mona Lisa properties,” and said Mar-a-Lago alone would fetch more than $1 billion if Trump sold it.

The trial is scheduled to run through early December.

More than 150 people including Cohen could testify, though much of the trial may be a battle of experts opining on financial documents.

Trump also faces several other legal headaches, which have been a financial drain, and made him the first sitting or former U.S. president to be criminally charged.

He has been criminally charged in Washington over his efforts to undo his loss in the 2020 presidential election, in Georgia over moves to reverse election results there, in Florida over his handling of classified documents upon leaving office, and in New York over hush money payments to a porn star.

Trump has denied all wrongdoing and pleaded not guilty.

(Reporting by Luc Cohen and Jack Queen in New York; Additional reporting by Doina Chiacu in Washington; Editing by Noeleen Walder, Cynthia Osterman and Nick Zieminski)

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By Jeff Mason

WASHINGTON (Reuters) -U.S. President Joe Biden on Sunday pressed congressional Republicans to back a bill to provide more aid to Ukraine, saying he was “sick and tired” of the political brinkmanship that nearly led to a government shutdown.

Biden spoke after Congress passed a stopgap bill on Saturday that extended government funding for more than a month and avoided a shutdown that would have left most of the federal government’s more than 4 million employees without a paycheck and cut a wide range of services.

The bill, which passed with broad Democratic and Republican support, sparked hardline Republican Matt Gaetz to pledge to oust the Republican speaker of the House of Representatives, Kevin McCarthy.

The bill, which lasts through Nov. 17, did not include aid for Kyiv. The United States has been a major supporter of Ukraine after Russia invaded it last year, and Biden has sought to rally the world, as well as his own country, to maintain that support.

Biden said Republicans had pledged to provide that aid through a separate vote.

“We cannot under any circumstances allow America’s support for Ukraine to be interrupted. I fully expect the speaker to keep his commitment to secure the passage and support needed to help Ukraine as they defend themselves against aggression and brutality,” he told reporters at the White House.

Asked if he could trust McCarthy to honor deals, Biden said: “We just made one about Ukraine, so we’ll find out.”

A White House official said Biden was referring to Republican promises of passing a separate bill on the issue.

Biden assured Ukrainian President Volodymyr Zelenskiy during a visit to Washington last month that strong U.S. support for his war to repel Russian invaders would be maintained despite opposition from some Republican lawmakers.

Biden urged Republicans to move ahead quickly to avoid another crisis in November.

“The brinkmanship has to end. And there shouldn’t be another … crisis,” he said. “I strongly urge my Republican friends in Congress not to wait. Don’t waste time as you did all summer. Pass a year-long budget agreement. Honor the deal we made a few months ago.”

Biden declined to weigh in on whether Democrats should support McCarthy if he needed their votes to keep his job as House speaker. The president said he would leave that to Democratic leaders in Congress to decide.

(Reporting by Jeff Mason; additional reporting by Jason Lange and Leah Douglas; editing by Scott Malone, Grant McCool and Nick Zieminski)

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By Jack Queen

(Reuters) – Donald Trump and his family business are set to stand trial in New York on Monday in a civil fraud case that could deal a major blow to the former U.S. president’s real estate empire.

Trump, the frontrunner for the 2024 Republican presidential nomination, is accused by Democratic New York Attorney General Letitia James of inflating the value of his assets by billions of dollars to secure better loan and insurance terms.

Trump plans to attend the first week of trial in state court in Manhattan, according to a court filing in an unrelated case.

The trial comes a week after the judge presiding over the case found Trump liable for fraud and will largely concern the penalties he must face.

James is seeking at least $250 million in fines, a permanent ban against Trump and his sons Donald Jr and Eric from running businesses in New York and a five-year restriction on commercial real estate activities by Trump and his flagship Trump Organization.

Trump has said the case is part of a political witchhunt.

Justice Arthur Engoron ruled last week that James had proven her fraud case against Trump, his two adult sons and 10 of his companies.

Engoron described in scathing terms how they made up valuations. That included Trump calculating the value of his apartment in Trump Tower as if it were three times its actual size.

“A discrepancy of this order of magnitude, by a real estate developer sizing up his own living space of decades, can only be considered fraud,” he said.

Engoron canceled business certificates for companies controlling pillars of Trump’s empire — including Trump Tower and his golf clubs in New York — and said he would appoint receivers to oversee their dissolution.

The ruling covers only a handful of the roughly 500 entities in Trump’s portfolio but includes some of his most valuable properties. The specifics of how that order will be implemented have not been decided, but the loss of those prized assets would be a major blow to Trump’s finances. If Engoron tacks on fines and business restrictions, that damage would compound.

The trial is scheduled to run through early December. More than 150 people including Trump are listed as potential witnesses, but much of the trial will likely be a battle of experts opining on financial documents.

James alleges Trump reaped hundreds of millions of dollars in ill-gotten savings by “grossly” inflating the values of his assets to get better deals from lenders and insurers.

That included listing his Mar-a-Lago club and residence in Florida as being worth up to $739 million even though deed restrictions capped it at $28 million, James said.

The case is one of several legal headaches Trump faces as he campaigns to retake the White House in the 2024 election. None have dented his commanding lead over rivals for the Republican nomination, though they have been a financial drain.

Trump, the first sitting or former U.S. president to be criminally charged, is under indictment in four separate cases.

He has been charged in Florida over his handling of classified documents upon leaving office, in Washington D.C. in his efforts to undo his loss in the 2020 presidential election, in Georgia over moves to reverse the election results in that state and in New York in hush money payments he made to a porn star.

Trump has denied wrongdoing and pleaded not guilty in all four cases.

(Reporting by Jack Queen; Editing by Noeleen Walder and Cynthia Osterman)

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(Corrects to police released still image of lawmaker, not entire video, paragraph 2)

WASHINGTON (Reuters) -Democratic U.S. Representative Jamaal Bowman faced investigation on Sunday, the morning after he pulled a fire alarm in the Capitol complex as his party was trying to delay a key vote, prompting an evacuation of a congressional office building.

A still image released by the Capitol Police on Saturday showed Bowman, who represents parts of New York City and its immediate suburbs, activating the fire alarm near the exit to an office building which houses congressional offices.

Police said they were investigating the incident, as is the House Administration Committee, a Republican-controlled congressional panel that overseas the House grounds.

Bowman, in a statement, admitted to pulling the fire alarm, which he said he regretted, but disputed that he did so to delay the vote, as many Republicans asserted.

The House was about to vote on a bipartisan bill to keep the government open for 45 days and avoid a shutdown. The bill ultimately passed with near-unanimous Democratic support but, at the moment, Democrats were scrambling to buy time to read the bill, which Republican House Speaker Kevin McCarthy had just unveiled.

“Today, as I was rushing to make a vote, I came to a door that is usually open for votes but today would not open,” Bowman said in a statement posted on X, the platform formerly known as Twitter.

“I am embarrassed to admit that I activated the fire alarm, mistakenly thinking it would open the door. I regret this and sincerely apologize for any confusion this caused.”

Some House Republicans called for Bowman to resign, though such a step appears unlikely, especially given that several members are facing arguably more serious legal and ethics-related issues.

(Reporting by Gram Slattery; Editing by Scott Malone)

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By David Morgan, Moira Warburton and Makini Brice

WASHINGTON (Reuters) -The U.S. Congress passed a stopgap funding bill late on Saturday with overwhelming Democratic support after Republican House Speaker Kevin McCarthy backed down from an earlier demand by his party’s hardliners for a partisan bill.

The Democratic-majority Senate voted 88-9 to pass the measure to avoid the federal government’s fourth partial shutdown in a decade, sending the bill to President Joe Biden, who signed it into law before the 12:01 a.m. ET (0401 GMT) deadline.

McCarthy abandoned party hardliners’ insistence that any bill pass the House with only Republican votes, a change that could cause one of his far-right members to try to oust him from his leadership role.

The House voted 335-91 to fund the government through Nov. 17, with more Democrats than Republicans supporting it.

That move marked a profound shift from earlier in the week, when a shutdown looked all but inevitable. A shutdown would mean that most of the government’s 4 million employees would not get paid – whether they were working or not – and also would shutter a range of federal services, from National Parks to financial regulators.

Federal agencies had already drawn up detailed plans that spell out what services would continue, such as airport screening and border patrols, and what must shut down, including scientific research and nutrition aid to 7 million poor mothers.

“The American people can breathe a sigh of relief: there will be no government shutdown tonight,” Democratic Senate Majority Leader Chuck Schumer said after the vote. “Democrats have said from the start that the only solution for avoiding a shutdown is bipartisanship, and we are glad Speaker McCarthy has finally heeded our message.”

DEMOCRATS CALL IT A WIN

Some 209 Democrats supported the bill, far more than the 126 Republicans who did so, and Democrats described the result as a win.

“Extreme MAGA Republicans have lost, the American people have won,” top House Democrat Hakeem Jeffries told reporters ahead of the vote, referring to the “Make America Great Again” slogan used by former President Donald Trump and many hardline Republicans.

Democratic Representative Don Beyer said: “I am relieved that Speaker McCarthy folded and finally allowed a bipartisan vote at the 11th hour on legislation to stop Republicans’ rush to a disastrous shutdown.”

McCarthy’s shift won the support of top Senate Republican Mitch McConnell, who had backed a similar measure that was moving through the Senate with broad bipartisan support, even though the House version dropped aid for Ukraine.

Democratic Senator Michael Bennett held the bill up for several hours trying to negotiate a deal for further Ukraine aid.

“While I would have preferred to pass a bill now with additional assistance for Ukraine, which has bipartisan support in both the House and Senate, it is easier to help Ukraine with the government open than if it were closed,” Democratic Senator Chris Van Hollen said in a statement.

McCarthy dismissed concerns that hardline Republicans could try to oust him as leader.

“I want to be the adult in the room, go ahead and try,” McCarthy told reporters. “And you know what? If I have to risk my job for standing up for the American public, I will do that.”

He said that House Republicans would push ahead with plans to pass more funding bills that would cut spending and include other conservative priorities, such as tighter border controls.

CREDIT CONCERNS

The standoff comes just months after Congress brought the federal government to the brink of defaulting on its $31.4 trillion debt. The drama has raised worries on Wall Street, where the Moody’s ratings agency has warned it could damage U.S. creditworthiness.

Congress typically passes stopgap spending bills to buy more time to negotiate the detailed legislation that sets funding for federal programs.

This year, a group of Republicans has blocked action in the House as they have pressed to tighten immigration and cut spending below levels agreed to in the debt-ceiling standoff in the spring.

The McCarthy-Biden deal that avoided default set a limit of $1.59 trillion in discretionary spending in fiscal 2024. House Republicans are demanding a further $120 billion in cuts.

The funding fight focuses on a relatively small slice of the $6.4 trillion U.S. budget for this fiscal year. Lawmakers are not considering cuts to popular benefit programs such as Social Security and Medicare.

“We should never have been in this position in the first place. Just a few months ago, Speaker McCarthy and I reached a budget agreement to avoid precisely this type of manufactured crisis,” Biden said in a statement after the vote. “House Republicans tried to walk away from that deal by demanding drastic cuts that would have been devastating for millions of Americans. They failed.”

(Reporting by David Morgan, Makini Brice and Moira Warburton, additional reporting by Kanishka Singh, writing by Andy Sullivan; Editing by Scott Malone, Andrea Ricci and William Mallard)

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WASHINGTON (Reuters) – U.S. Speaker of the House Kevin McCarthy on Sunday said he would not be ousted after a U.S. representative vowed to force a vote removing him from the speakership, CBS news reported.

(Reporting by Jason Lange; Editing by Lisa Shumaker)

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By David Morgan, Makini Brice and Moira Warburton

WASHINGTON (Reuters) -The U.S. House of Representatives passed a stopgap funding bill on Saturday with overwhelming Democratic support after Republican Speaker Kevin McCarthy backed down from an earlier demand by party hardliners for a partisan bill.

Time remained short to avoid the federal government’s fourth partial shutdown in a decade, which will begin at 12:01 a.m. ET (0401 GMT) on Sunday unless the Democratic-majority Senate passes it and President Joe Biden signs it into law in time.

McCarthy abandoned party hardliners’ earlier insistence that any bill pass the chamber with only Republican votes, a change that could cause one of his far-right members to try to oust him from his leadership role.

The House voted 335-91 to fund the government for another 45 days, with more Democrats than Republicans supporting it.

The move marked a profound shift from earlier in the week, when a shutdown looked all but inevitable. A shutdown would mean that most of the government’s 4 million employees would not get paid – whether they were working or not – and also would shutter a range of federal services, from National Parks to financial regulators.

Federal agencies had already drawn up detailed plans that spell out what services would continue, like airport screening and border patrols, and what must shut down, like scientific research and nutrition aid to 7 million poor mothers.

DEMOCRATS CALL IT A WIN

Some 209 Democrats supported the bill, far more than the 126 Republicans who did so, and Democrats described the result as a win.

“Extreme MAGA Republicans have lost, the American people have won,” top House Democrat Hakeem Jeffries told reporters ahead of the vote.

Democratic Representative Don Beyer said: “I am relieved that Speaker McCarthy folded and finally allowed a bipartisan vote at the eleventh hour on legislation to stop Republicans’ rush to a disastrous shutdown.”

McCarthy’s shift won the support of top Senate Republican Mitch McConnell, who previously had backed a similar measure that was moving through the Senate with broad bipartisan support, even though the House version dropped aid for Ukraine.

McCarthy dismissed concerns that hardline Republicans could try to oust him as leader.

“I want to be the adult in the room, go ahead and try,” McCarthy told reporters. “And you know what? If I have to risk my job for standing up for the American public, I will do that.”

He said that House Republicans would push ahead with plans to pass more funding bills that would cut spending and include other conservative priorities, such as tighter border controls.

CREDIT CONCERNS

The standoff comes just months after Congress brought the federal government to the brink of defaulting on its $31.4 trillion debt. The drama has raised worries on Wall Street, where the Moody’s ratings agency has warned it could damage U.S. creditworthiness.

Congress typically passes stopgap spending bills to buy more time to negotiate the detailed legislation that sets funding for federal programs.

This year, a group of Republicans has blocked action in the House as they have pressed to tighten immigration and cut spending below levels agreed to in the debt-ceiling standoff last spring.

The McCarthy-Biden deal that avoided default set a limit of $1.59 trillion in discretionary spending in fiscal 2024. House Republicans are demanding another $120 billion in cuts.

The funding fight focuses on a relatively small slice of the $6.4 trillion U.S. budget for this fiscal year. Lawmakers are not considering cuts to popular benefit programs such as Social Security and Medicare.

(Reporting by David Morgan, Makini Brice and Moira Warburton, Writing by Andy Sullivan; Editing by Scott Malone and Andrea Ricci)

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