WASHINGTON – House Speaker Kevin McCarthy on Wednesday released a bill to limit debt that he hopes will pass, with Republican support. This triggered a frantic rush to collect the votes within his narrow majority.
McCarthy, R.-Calif., announced on the House Floor that he would introduce the Limit, Save, Grow Act 2023. McCarthy added that the act “would responsibly raise the debt ceiling into next year,” and save trillions.
McCarthy stated that the proposal to avoid default would be linked to conservative policies. These include cutting federal spending levels to 2022, limiting annual growth to 1%, repealing increased IRS enforcement funding, undoing Joe Biden’s federal student loan forgiveness, and cancelling unspent pandemic aid funds.
McCarthy said that the House Budget Committee chair Jodey Arrington will lead the 320 page bill published shortly after his speech.
McCarthy’s plan is not likely to get enough votes to pass, despite being the most important test since his long struggle to become Speaker.
Republicans are on a very narrow majority, and they can only afford four votes against the bill before it falls apart. Democrats will vote en masse to stop this legislation. McCarthy expressed his confidence that the bill will pass if it is put to a vote in the House next week.
He said, “We will work through this, but we are going to make it.” “I never give up. “We’ll get them.”
McCarthy’s action is an attempt to press Biden into making policy concessions in order to avoid a calamitous default as soon as June . McCarthy slammed Biden’s refusal to negotiate and his statement that Congress should allow U.S. bills to be paid without conditions.
Even if McCarthy’s bill were to pass the House, Senate Majority Leader Chuck Schumer, D-N.Y., has said it’s dead on arrival in the Democratic-controlled Senate, telling reporters Tuesday that a “clean debt ceiling is the way to go.”
If the House passes the measure, this could increase the pressure on Senate Democrats in order to create their own competing legislation.
Biden, Schumer, and House Minority leader Hakeem Jeffreys, D-N.Y. spoke by telephone Tuesday. They “agreed that we will not negotiate over default, and Republicans should pass an unambiguous bill, like they did three time in the previous administration,” according to the White House.
In a memo released on Tuesday, Goldman Sachs’ economic research team stated that the deadline for debt ceiling could be sooner than expected.
The memo stated that “while the data is still very preliminary,” weak tax collections in April indicate an increased likelihood that the debt ceiling deadline will be met in the first half June. We have projected that Treasury can operate without an increase in the debt limit until early August.
The Treasury Department set a deadline of June 5, for Congress to either extend the debt ceiling or risk a default, the first in U.S. History.
Garrett Haake, Alexandra Bacallao and others contributed.