GOP-Led House Passes McCarthy’s Plan To Raise Debt Limit

House Passes Debt Ceiling Plan, Putting Pressure on White House to Negotiate

The GOP-led House, under the leadership of Speaker Kevin McCarthy (R-CA), has passed a debt ceiling plan that would suspend the debt limit until it rises by $1.5 trillion or until March 31, 2024, in exchange for spending cuts and commitments aimed at fostering economic growth. The final tally showed 217 voted in favor and 215 voted against the legislation. The bill now heads to the Senate, which is controlled by Democrats, and faces long odds.

Republicans Challenge White House to Negotiate

McCarthy challenged Senate Majority Leader Chuck Schumer (D-NY) to put an alternative debt ceiling plan to a vote and challenged President Joe Biden to agree to talks. “Now, the president can no longer put this economy in jeopardy,” McCarthy said. However, the White House and its allies have been pushing for a “clean” debt ceiling bill separate from any spending cuts or policy concessions.

Time is of the Essence

Treasury Secretary Janet Yellen notified Congress in January that the United States had crossed the statutory limit of roughly $31.4 trillion and advised that her agency take “extraordinary measures” so the government could continue to pay its bills, but only in the short term. Experts have warned of a default this summer that could cripple the U.S. economy without a deal to raise the borrowing limit for the federal government, which the Treasury Department says Congress has acted upon 78 times since 1960.

Republicans Introduce “Limit, Save, Grow Act of 2023”

House Republicans introduced their plan, the “Limit, Save, Grow Act of 2023,” one week ago, with McCarthy saying it would “responsibly raise the debt limit into next year and provide more than $4.5 trillion in savings to American taxpayers.” The Congressional Budget Office assessed the proposal would slash federal deficits by $4.8 trillion over 10 years.

• The 320-page proposal aims to cut spending to 2022 levels and cap spending growth at 1% a year for a decade.
• It included provisions to rescind unobligated COVID relief funds, repeal “green” energy tax credits, crack down on student debt relief, rescind Internal Revenue Service money, and more.

Not everyone on the Republican side immediately supported the plan, threatening its passage as Republicans hold a slim majority in the lower chamber. Although GOP leaders initially signaled that they would not accept changes, over the last 24 hours they have been negotiating with holdouts, hashing out concessions that include cutting sections that would have taken away tax credits for biofuels and agreeing to tighten work requirements for social safety net programs.

Democrats Oppose Republican Plan

Rep. Brendan Boyle (D-PA), the ranking member on the Budget Committee, spoke on the House floor, sharing the view of Democrats that the Republican plan will hurt the economy. “My friends on the other side of the aisle will claim they are being ‘fiscally responsible.’ Let’s be clear: there never has been and never will be anything fiscally responsible about refusing to pay America’s bills. Killing millions of jobs is also not fiscally responsible. Neither is knowingly unleashing a recession,” he said.

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