Washington — House Speaker Kevin McCarthy and Republican lawmakers unveiled their plan on Wednesday to raise the debt ceiling and cut government spending ahead of the summer deadline in a bid to prevent a catastrophic and historic default by the US on its debt obligations.
called the “Limit, Save, Grow Act” 320 page proposal The measure, introduced by Texas Republican Jody Arrington, chairman of the House Budget Committee, would raise the debt ceiling by $1.5 trillion or so through the end of March 2024, and also details a $4.5 trillion cut in federal spending, according to McCarthy.
The bill was announced by McCarthy amid stalled talks with the White House over the debt ceiling. The US struck down its borrowing authority in January, forcing the Treasury Department to begin using “extraordinary measures” to keep paying the bills. The Congressional Budget Office estimates those measures will expire as soon as July, putting the nation at risk of defaulting for the first time without action from Congress. Some analysts have said the extraordinary measures may soon run their course.
President Biden and Democrats are pushing for a bill that would unconditionally raise or suspend the debt ceiling. But Republicans are pairing the spending cuts with debt-ceiling increases, putting the two sides on a collision course.
Mr. Biden and McCarthy have met face-to-face once, in February, to discuss the debt ceiling, and the White House prompted Republicans to provide more details about which federal programs could face cuts. It’s unclear whether the Limit, Save, Grow Act meets the president’s demands for the House GOP to release a budget explaining potential spending on the chopping block.
It’s also unclear whether McCarthy’s proposal could garner enough support from Republicans to clear the House, where the GOP holds a slim majority. The plan has no chance of passing the Democratic-led Senate, and even if the legislation were to win approval from both chambers, it would almost certainly be vetoed by Mr. Biden.
The bill does, however, serve as House Republicans’ opening proposition in any final negotiations, and highlights the priorities of a fractious caucus with a narrow majority. Here’s what the House Republicans’ Limit, Save, Grow Act would do:
increase credit limit
The plan would increase the debt ceiling to $1.5 trillion or until March 31, 2024, whichever comes first.
cap budget increases
The GOP bill limits federal budget increases to 1% per year, significantly slower than the rate of inflation and less than recent year-over-year budget increases, especially since the pandemic. That’s not likely to fly with the Democrats, as it would mean cutting discretionary spending.
Apply for work requirements for federal aid
The GOP bill imposes stricter work requirements for childless adults to receive the Supplemental Nutrition Assistance Program, formerly known as food stamps. The bill requires each state to collect and submit information to the federal government about the percentage of people enrolled in SNAP who are in non-subsidized employment, as well as the average earnings of those who opt out of the program. After that it was workable.
cancel irs funding
The Republican plan would also eliminate $80 million in additional IRS funding, including funding for thousands more agents, that was made possible by the Inflation Reduction Act. Republicans previously passed a bill to eliminate those additional positions, but the bill died in the Senate.
Recover unspent Pandemic Relief Fund
The Republican legislation reallocates federal COVID-19 relief funds approved in the US rescue plan and emergency relief packages passed in the final months of the Trump administration. While most of the money has been spent, Republicans – many of whom have long gone against a larger flow of federal spending – believe that withholding the remaining money will help balance federal coffers. Can
“The American people are tired of politicians who use COVID as an excuse for hyper-inflationary spending,” McCarthy said on the House floor on Wednesday. “Now, if this money that was authorized to fight the pandemic was not spent during the pandemic, it should not be spent after the pandemic is over.”
Unwind Biden’s student loan forgiveness program
The Republican’s bill would extend Mr Biden’s program to forgive student loan debt of up to $20,000 per borrower. under the plan, announced By the President last August, eligible borrowers can have up to $10,000 of student loans cleared, while eligible Pell grant recipients can have an additional $10,000 forgiven. The program has been put on hold as legal challenges made their way through the courts.
Roughly 40 million Americans are eligible for relief. Mr. Biden blocked a moratorium on federal student loan payments, which was first imposed by Trump in the early months of the pandemic, through June.
Aside from House Republicans’ effort to open up the student loan forgiveness program, there are two challenges to the plan pending before the Supreme Court. The judges are expected to issue a ruling, which could invalidate the program, by the end of June.
Repeal the provisions of the Inflation Reduction Act
The Inflation Reduction Act was signed into law by Mr Biden last year and is the Democrats’ marquee health care, tax and climate bill. The $740 billion package passed only with Democratic support.
Republicans now want to repeal key aspects of the law that were designed to combat climate change, including provisions establishing the High-Efficiency Electric Home Rebate Program and home energy efficiency contractor training grants.
Enact the Republican-Signed Energy Bill
Included in the debt ceiling package is HR 1, the “Low Energy Cost Act”. The purpose of the legislation is to boost US energy production and reduce dependence on foreign oil. The plan seeks to speed up the permitting process for energy and infrastructure projects and increase oil and gas production and sales.
It also includes a provision that bars the Secretary of Energy from enacting any rule that would “directly or indirectly limit” consumer access to gas kitchen ranges and ovens.