House Speaker Kevin McCarthy outlined a proposal to lift the nation's credit limit for one year in exchange for significant spending cuts and GOP policy changes to federal assistance programs, as negotiations between McCarthy and President Biden on the issue remain stalled.
"Without exaggeration, American debt is a ticking time bomb that will detonate unless we take serious, responsible action," McCarthy warned in a speech at the New York Stock Exchange on Monday.
McCarthy and Biden have had only one major discussion about the debt limit, on Feb. 1. The president and Democratic leaders on Capitol Hill insist that Congress should pass a clean bill to raise the debt ceiling without demands that they warn could lead to a catastrophic and historic default. The Treasury Department has said the country will run out of money to pay its bills sometime this summer.
Biden for weeks has said House Republicans should present a budget proposal before he agrees to another meeting with McCarthy to negotiate any compromise. He also says any debate on federal spending should take place around the debate this fall on spending bills, not around a measure to increase the debt ceiling.
The speaker complained about the president's posture, saying "enough is enough" and vowing House Republicans would act on their own. He added, "This is not how the leader of the free world should act. Your partisan political games are provoking the very crisis you claim you want to avoid: greater dependency on China, increasing inflation, and threatening Medicare and Social Security."
But it's unclear McCarthy can maneuver a debt bill through the House with such a thin majority. Some moderates may be reluctant to back provisions that add work requirements to federal assistance programs like food stamps. McCarthy acknowledged his rough path to obtaining the votes to be elected speaker 100 days ago in his speech on Monday. One of the demands from conservatives who initially withheld their support from McCarthy was that the House would not vote on a stand-alone measure to lift the debt limit. Fiscal conservatives also wanted a plan to balance the budget within 10 years, but House Republicans are still negotiating amongst themselves on a budget blueprint, and McCarthy has decided to instead roll out a debt proposal in the hopes he can force the president to the negotiating table.
The speaker repeated a claim he makes often: that Democrats are to blame for the trillions in federal debt. But spending policies and tax proposals from both Republican and Democratic administrations over decades contributed to the current national debt level.
House GOP debt limit proposal
The speaker said Monday that a "no-strings-attached debt limit cannot pass" and noted that as a senator, Biden backed attaching spending reforms to legislation to lift the debt ceiling.
McCarthy, R-Calif., said the House would vote "in the coming weeks" on a bill that would raise the debt limit into an unspecified date in 2024, reduce federal spending levels to those in place in 2022, and limit the growth of spending over the next 10 years to 1% annually. He pledged the GOP bill would do this "without touching Social Security and Medicare" and ensured that veterans would be taken care of.
McCarthy also said the bill would claw back unspent federal funds earmarked to respond to the pandemic, now that the president signed Republican legislation ending the federal emergency to the public health crisis.
House Republicans also plan to add work requirements for those adults without dependents who are enrolled in federal assistance programs like food stamps. "Incentives matter. And the incentives today are out of whack," McCarthy said.
Democrats have decried plans to change the rules for current federal benefits, warning it would mean more Americans will experience poverty.
Democrats label proposal extreme
Christie Stephenson, spokeswoman for House Minority Leader Hakeem Jeffries, D-N.Y., said Democrats will evaluate the bill "if House Republicans can ever agree with themselves about how much they want to devastate American families in order to finance tax cuts for the wealthy, well-off and well-connected."
Even if McCarthy can get support from the House GOP conference, the measure is not expected to advance in the Democratic-controlled Senate. Senate Majority Leader Chuck Schumer, D-N.Y., has backed the president's position that there should be no negotiations tied to the debt ceiling.
After McCarthy's speech, Schumer dismissed the proposal as unserious, telling reporters on Capitol Hill, "What we got today was not a plan, it was a recycled pile of the same things he's been saying for months. None of which has moved the ball forward an inch."
White House Deputy Press Secretary Andrew Bates said in a written statement Monday that McCarthy "failed to clearly outline what House Republicans are proposing and will vote on, even as he referenced a vague, extreme MAGA wish list that will increase costs for hard-working families, take food assistance and health care away from millions of Americans, and yet would enlarge the deficit."
Analysts at the Peterson Institute for International Economics warn that there are national security implications if Congress fails to increase the credit limit to pay the bills it has already incurred. A fact sheet circulated by the group says it could boost China and Russia while "sowing irreparable doubt among even our closest allies not just about US financial commitments, but about any promises we have made to other countries."
NPR's Scott Horsley contributed to this story.
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