WASHINGTON — House Speaker Kevin McCarthy moved Wednesday to end a standoff with President Biden over federal spending by proposing to let the US borrow either another $1.5 trillion or until March 31, 2024, whichever comes first.
In exchange, discretionary spending for non-defense programs would be reduced to fiscal year 2022 levels and growth of future expenditures would be limited to 1% per year for the next decade.
“These spending limits are not draconian; they’re responsible,” McCarthy (R-Calif.) said in remarks on the House floor Wednesday.
The proposal, known as the Limit, Save, Grow Act of 2023, would also reclaim roughly $100 billion in unspent COVID aid and claw back another $70 billion from IRS funding that was approved in the Inflation Reduction Act Biden signed into law last year.
McCarthy said the GOP bill would also “end the green giveaways” included in the Act, which he claimed amounted to $1.2 trillion, citing a recent Goldman Sachs assessment.
Republicans also want to block Biden’s $400 billion student debt cancellation plan — which is currently being considered by the Supreme Court — and demand more federal work requirements for benefit programs though McCarthy did not specify which programs would be targeted.
House Speaker Kevin McCarthy is reportedly proposing to raise the nation’s debt ceiling by $1.5 trillion. Photo by STEFANI REYNOLDS/AFP via Getty Images“Right now there are more job openings than people looking for work,” he said. “In part, because the Biden administration has weakened some of the very work requirements that then-Senator Joe Biden previously supported.”
McCarthy said the move would additionally shore up funding for Social Security and Medicare — as Democrats have frequently accused Republicans of seeking cuts to the longstanding welfare programs.
The plan amounts to an opening gambit by McCarthy, with White House press secretary Karine Jean-Pierre scoffing earlier Wednesday that “you have a speaker that is threatening to default … there should be no negotiations.”
The plan threatens to destabilize McCarthy’s own leadership if the cuts aren’t deep enough for fiscal hardliners. A coalition of 20 critics delayed McCarthy’s ascension to the House speakership in January, forcing 15 ballots and many concessions — including an easier mechanism to oust the speaker in a no-confidence vote.
The US national debt is currently about $31.7 trillion, compared to roughly $27.75 trillion when Biden took office and about $19.95 trillion in 2017 when former President Donald Trump took office.
A budget proposal released by Biden last month would increase the annual deficit from $1.38 trillion in fiscal 2022 to $1.9 trillion in fiscal 2025 — meaning the national debt actually would grow at a faster rate.
