McCarthy releases debt-limit plan
Speaker Kevin McCarthy on Wednesday unveiled House Republicans’ plan to raise the debt limit while cutting federal spending, saying he hopes to pass the package next week.
BREAKING UPDATE 3:13 PM: Speaker Kevin McCarthy on Wednesday unveiled House Republicans’ plan to raise the debt limit while cutting federal spending, saying he hopes to pass the package next week.
It’s a significant step in the standoff over the debt ceiling between the House GOP and President Joe Biden, who has insisted on raising the debt limit with no strings attached and repeatedly accused Republicans of having no real plan. But McCarthy still needs to pass the measure through the House, where he only has four votes to spare, if he wants to put more of an onus on Biden and Democrats to propose a counteroffer. Meanwhile, the debt limit clock is ticking, with experts predicting the U.S. could default as early as June.
The House GOP proposal would raise the debt limit by $1.5 trillion, or through March of next year — whichever comes first. It also cuts federal funding by $130 billion in the upcoming fiscal year, along with several other fiscal restraints.
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Original story:
Speaker Kevin McCarthy outlined broad details of his party’s debt limit plan Wednesday afternoon — a critical step forward in a monthslong standoff with President Joe Biden — although the GOP leader has yet to release text or explain the proposal in detail.
The California Republican also promised the House GOP would approve the bill by next week, a task that’s likely to prove complicated given the internal frustration about the path forward aired during a closed-door conference meeting this week. In a speech on the House floor Wednesday, McCarthy sought to put the onus on Biden and top Democrats to make the next move in the debt limit standoff.
“They have no more excuse to refuse to negotiate,” the speaker said on the floor after privately briefing Republican lawmakers. “President Biden has a choice: come to the table and stop playing partisan political games, or cover his ears, refuse to negotiate, and risk bumbling his way into the first default in our nation’s history.”
The president and speaker haven’t communicated on the looming debt crisis since February. But Biden was set to deliver his own fresh pushback to McCarthy in a speech Wednesday, where he’s expected to reject the GOP plan as “the same old trickle-down dressed up in MAGA clothing.”
“He proposed huge cuts to important programs that millions of working- and middle-class Americans count on,” Biden will say, according to an excerpt of his speech at a Maryland union hall.
The White House has repeatedly dinged McCarthy for delaying a release of a budget proposal that would theoretically outline the Republican goals for slashing the federal deficit. That budget plan now appears indefinitely on ice as the speaker presses ahead toward passage of his debt-limit offer.
The news late last week that McCarthy would issue a debt-limit proposal rather than a budget prompted a flurry of strategizing inside the administration ahead of its unveiling, as officials gamed out options for a response. But McCarthy’s decision to stock the plan with a wish-list of conservative priorities — combined with doubts over whether it could win enough GOP support to pass the House — has left Biden officials unconvinced there’s any reason to budge off their current hardline stance.
“Speaker McCarthy is engaging in dangerous economic hostage-taking,” press secretary Karine Jean-Pierre said. “Why would the speaker — like no other speaker has done before — threaten default?”
McCarthy said he would use passage of his proposal, which is expected to include deregulatory and energy moves beyond spending cuts, to keep pushing for a sit down with Biden.
The White House, however, insists there is nothing Republicans can offer that will convince them to compromise over the debt limit. Biden officials in recent days have worked to maintain a united front among Democrats on Capitol Hill, warning that a debt ceiling negotiation would set a dangerous precedent.
Biden personally called Majority Leader Chuck Schumer and top House Democrat Hakeem Jeffries on Tuesday to stress that there would be no negotiation, a Democratic aide said.
The White House also distributed two memos to congressional Democrats this week detailing support from economists and business leaders for a clean increase, as well as polling showing broad opposition to the cuts included in the GOP bill.
Democratic senators quickly made clear that Republicans’ opening offer is doomed if it reaches the upper chamber.
“There are no policy concessions that should ever be attached to avoiding default — it doesn’t matter which policy concessions they are,” said Sen. Brian Schatz of Hawaii, adding that Senate Democrats remain “100 percent” behind that stance.
Still, there is growing urgency among lawmakers on both sides of the aisle to make progress toward a resolution. Budget forecasters now predict the nation could hit its borrowing limit earlier than expected, and as soon as late next month.
And McCarthy didn’t shrink from blasting the upper chamber on Wednesday for what he portrayed as legislative laziness.
The Senate “named March maple syrup month and then yesterday they congratulated UConn on winning the national championship. It’d be interesting if the Senate ever does anything,” the speaker said.
Olivia Beavers contributed to this report.