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 Representative McCarthy, the No. 2 House Republican, had been
expected to win Thursday's contest for the nomination to succeed
retiring Speaker John Boehner despite opposition from more
conservative lawmakers demanding a harder line against Democratic
President Barack Obama's agenda.
But McCarthy stunned colleagues by bowing out before the vote,
saying he was still short of the support needed to be an effective
speaker.
"For us to unite, we probably need a fresh face," McCarthy, who is
from California, told reporters after the election meeting ended in
chaos. He said he would remain majority leader, a post he has held
since August 2014.
House Republicans scrambled to identify a replacement who could
bridge their divisions. A move to draft House Ways and Means
Committee Chairman Paul Ryan had made no headway as of the end of
the day.
Ryan, Republicans' leading voice on fiscal matters and their 2012
vice presidential candidate, said shortly after McCarthy's
announcement that he would not run for speaker. But Republican
lawmakers later said they were still urging him on.
 "My statement stands. I haven't changed anything," Ryan later told
reporters in the Capitol. "I've got nothing to add right now."
Boehner, who planned to retire from Congress on Oct. 30, said he
would stay on the job as speaker until a replacement is elected. It
was not clear whether an Oct. 29 vote for speaker in the full House
would still take place.
Under the leadership of Boehner, an Ohio Republican who relied on
McCarthy as an ally, Republicans stumbled into a 16-day government
shutdown in 2013 and waged a debt-limit standoff with Obama that
brought the country to the brink of default in 2011, leading to the
United States' first-ever debt rating downgrade.
Congress faces another deadline to lift the debt limit on Nov. 5 and
another potential shutdown threat in December.
The next speaker will have to navigate some of these issues while
answering to a newly assertive conservative wing at a time when the
party is trying to show voters they can govern effectively ahead of
the November 2016 presidential elections.
In several closed-door meetings this week, McCarthy told Republican
lawmakers he would run the House in a more inclusive manner than
Boehner had.
But he failed to convince the 40 or so members of the House Freedom
Caucus, a group aligned with the Tea Party movement that calls for
lower taxes, less federal spending and reduction of the national
debt and federal budget deficit.
The caucus decided to back a rival of McCarthy, Representative
Daniel Webster of Florida.
McCarthy also faced criticism for suggesting last week that a
congressional probe of the 2012 attacks in Benghazi, Libya, was
designed to hurt Democratic presidential candidate Hillary Clinton.
Clinton was secretary of state at the time of the attack, which
killed four Americans.
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House Republicans' inability to merely pick a leader comes after
Boehner and Senate Majority Leader Mitch McConnell, also a
Republican, had gone to great lengths to demonstrate that their
party can effectively run Congress and should be trusted with the
White House in 2017.
The two lawmakers who had challenged McCarthy for the post, Webster
and Representative Jason Chaffetz of Utah, said they were still in
the race and others likely will enter.
"It was just absolutely stunning what happened," Chaffetz said.
Republican Representative Walter Jones earlier this week asked the
speaker candidates to step aside if they had committed any personal
"misdeeds" that could embarrass the party, without naming any
specific concerns.
Asked whether that request was a factor in his decision to quit the
race, McCarthy, flanked by his wife and children, said, "No. Come
on."
White House spokesman Josh Earnest urged Republicans to raise the
debt ceiling promptly. He said "there's been a rupture in the
Republican Party" between moderates and a vocal conservative
minority.
"It does threaten their ability to make a strong case to the
American public that they have what it takes to govern the country,"
Earnest said at a news briefing.
Senator John McCain, the 2008 Republican presidential candidate,
warned that his party must put an end to the turmoil or risk voter
backlash next year.
"If this turmoil continues I can surely understand why people would
wonder what's going on in the Republican Party," McCain told MSNBC.
(Additional reporting by David Lawder, Roberta Rampton, Doina
Chiacu, Susan Heavey and Lisa Lambert; Editing by Grant McCool and
Ken Wills)
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