House Speaker Kevin McCarthy released a long-awaited budget proposal Wednesday, which raises the U.S. debt by $1.5 trillion to avoid default while cutting spending across a wide swathe of areas that are likely to be opposed by the Biden administration.
The 320-page plan, called the “Limit, Save, Grow Act,” would raise the debt ceiling by $1.5 trillion, which would prevent the U.S. defaulting on its debt in August or September, per current projections. The increase would enable the government to remain creditworthy until March 31, 2024, at which point the borrowing limit would need to be raised, again.
However, McCarthy’s plan also includes many provisions to curb government spending, a demand long-sought by House conservatives in the GOP Conference. It would bring down spending levels to the 2022 threshold, making for a $130 billion cut in federal spending this fiscal year, while capping any spending increase at 1% per year for the next decade, which McCarthy expected would lead to debt reductions of $4.5 trillion. (REP. ANDY BIGGS: Raise The Debt Ceiling Again? Here’s A Better Idea)
.@SpeakerMcCarthy (R-CA): “Today, I’m proud to announce we are introducing the Limit, Save, Grow Act of 2023 … [The bill] would responsibly raise the debt limit into next year and provide more than $4.5 trillion in savings to American taxpayers.” https://t.co/CXoX6Ml1TQ pic.twitter.com/zSZ6ciFo7M
— CSPAN (@cspan) April 19, 2023
“If Washington wants to spend more it will have to come together and find savings elsewhere just like every single household in America,” McCarthy said in his speech on the floor announcing the bill. He echoed comments he made in a speech at the New York Stock Exchange on Monday, where he expressed a desire to “restore discipline” in Washington, and said that “a no-strings-attached debt-limit increase will not pass,” according to the AP.
The plan further includes provisions to take back COVID-19 benefits from undeserving and fraudulent recipients as well as impose work requirements on beneficiaries of anti-poverty programs. It also includes the House GOP’s energy legislation, the Lower Energy Costs Act, passed in March.
McCarthy’s plan is unlikely to pass the Senate or receive President Joe Biden’s approval, with his spokesman Andrew Bates calling McCarthy’s Monday speech a “MAGA Republican Wish List” that would “impose devastating cuts on hardworking families” among other negativities.
They set 2024 levels at $1.47t + adjustments — which is about $1.5t in total.
Then limit to 1% growth. pic.twitter.com/dIlyrKIpyw
— Marc Goldwein (@MarcGoldwein) April 19, 2023
The plan also targets several key initiatives of the Biden administration, such as tax credits passed in the Inflation Reduction Act, an increase in the Internal Revenue Service budget, and Biden’s Student Loan Debt Relief plan, since blocked by courts, which would forgive $10,000 in federally-held student debt for lower-income borrowers.
The debt-ceiling debate has been anticipated as the most high-profile and consequential clash between House Republicans and the Biden administration over the summer. The U.S. hit its debt ceiling of $31 trillion in January but has continued to issue debt under emergency provisions.
Should the U.S. default on its debt, the consequences would be severe and affect the global economy, according to experts.
The Daily Caller News Foundation has reached out to the White House for comment.
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