House Speaker Kevin McCarthy has unveiled his plan to address the nation’s looming debt ceiling drama, offering to raise the borrowing cap by $1.5 trillion to prevent a default.
But the proposal comes with a long list of demands from House Republicans that Senate Democrats and the White House strongly oppose. So there’s virtually no chance this bill becomes law, even though McCarthy is pushing for the House to pass it by next week.
Still, it serves as the next move in the drawn-out saga of dealing with the debt limit, which the US hit in January. The Treasury Department is temporarily using cash on hand and “extraordinary measures” to pay the federal government’s bills on time and in full until Congress grants it the authority to resume borrowing. Once those are exhausted, the US would start to default on its obligations, which would unleash economic upheaval globally.
The legislation would save $4.5 trillion over a decade, according to McCarthy, though official cost estimates have not yet been released.
Here’s what House Republicans want in exchange for raising the debt ceiling:
The proposal would return funding for federal agencies to fiscal 2022 levels, while aiming to limit the growth in spending to 1% per year. The Pentagon budget would be spared any reduction.
The package does not list any specific cuts. However, House Appropriations Committee Ranking Member Rosa DeLauro, a Democrat from Connecticut, asked government agencies earlier this year about the potential impact of reducing fiscal 2024 discretionary, non-defense spending (with the exception of veterans’ medical care) to fiscal 2022 levels.
Examples the agencies gave included shutting down 125 air traffic control towers, slashing nutrition services for 1 million senior citizens and eliminating affordable housing assistance for close to 1.1 million…
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