The introduction of that plan and Biden’s speech demanding a debt limit hike with no strings attached represented significant steps in a standoff with major financial and political implications. 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 — ensuring Biden has to relitigate the issue with House Republicans before voters pick the next president. It also cuts federal funding by $130 billion in the upcoming fiscal year, turning back discretionary spending totals by about two years.
Actually passing the bill is likely to prove complicated, however — rank-and-file Republicans aired internal frustration about the path forward during a closed-door conference meeting this week. But already, McCarthy is seeking 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, prompting McCarthy’s bill proposal and subsequent planned vote next week. The GOP plan aims to repeal a swath of clean energy tax credits, in addition to yanking back tens of billions of dollars that Democrats included for IRS enforcement in their signature tax, climate and health care bill last year. The proposal would also end Biden’s pause on student loan payments and interest, block his student loan forgiveness plan and increase work requirements for “able-bodied adults without dependents” receiving SNAP benefits.
It would also claw back unspent pandemic aid, ease permitting requirements for energy projects and overhaul other welfare requirements, including for Medicaid.
Biden began speaking just minutes after the plan’s introduction. But in his remarks, he still accused McCarthy of advancing a plan that would benefit only the wealthy and major corporations and vowed to reject GOP attempts to roll back his administration’s accomplishments in exchange for averting a financial catastrophe.
“They’re in Congress threatening to undo all the stuff that you helped me get done,” he said. “You and the American people should know about the competing economic visions of the country that are at stake right now.”
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 — left Biden officials unconvinced there’s any reason to budge off their current hardline stance.
“They say they’re going to default unless I agree to all these wacko notions they have,” Biden said, singling out McCarthy for risking a default that would leave the nation “devastated.”
McCarthy said he would use passage of his proposal, which includes deregulatory and energy moves beyond spending cuts, to keep pushing for a sit down with Biden. The 320-page debt-limit package was strategically sponsored by House Budget Chair Jodey Arrington (R-Texas), who would naturally be the lead sponsor of the traditional budget resolution Democrats have been pressuring House Republicans to unveil and approve.
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, Democrats’ universal panning of the GOP proposal masked growing urgency among lawmakers to make progress toward a resolution. Budget forecasters now predict the nation could hit its borrowing limit earlier than expected. The approaching deadline has motivated a bipartisan group of House moderates to try to craft a potential fallback compromise, while sparking broader speculation across the Hill over the potential for a short-term extension that might buy Congress more time.
McCarthy has vowed to push through his legislation, 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.
But on Wednesday, Biden indicated that the proposal would have no effect on the White House’s own set of demands.
“Take default off the table, and let’s have a real, serious, detailed conversation about how to grow the economy, lower costs and reduce the deficit,” he said.
Olivia Beavers and Caitlin Emma contributed to this report.
