House GOP’s long-awaited debt limit bill features $1.5T increase

House Republicans’ go-it-alone debt limit bill pairs a debt ceiling increase expected to last into next year with what Speaker Kevin McCarthy (R-Calif.) said would be about $4.5 trillion in savings generated in part by cutting Biden administration priorities.

The bill released on Wednesday — dubbed the Limit, Save, Grow Act — aims to raise the debt limit by $1.5 trillion or through March 31, 2024, whichever comes first. 

It proposes reverting discretionary spending caps to fiscal 2022 levels while limiting growth to 1 percent annually over the next decade. While Republicans have long said the discretionary spending cuts would not target defense spending, nothing in the bill explicitly protects defense spending, leaving that spending up to appropriators.

The move to release a debt limit increase bill comes as President Biden has refused to negotiate with McCarthy on the matter, calling for a “clean” debt limit increase not paired with any other policy points.

“Now that we’ve introduced a clear plan for responsible debt limit increase, they have no more excuse and refuse to negotiate,” McCarthy said in a House floor speech.

The bill is expected to get a floor vote next week. But with just a four-vote majority, McCarthy will have to work to ensure it reaches majority support.

McCarthy told reporters on Wednesday that he’s confident about the bill’s chances of passage. 

While Republicans originally sought to use the debt limit as a way to ensure concessions on spending, leaders added in some policy suggestions after McCarthy detailed the plan to the conference on Tuesday, helping to build support from hardline conservatives who clamored for more cuts. 

“With the discussions that I’ve been in, I think that we can get 218,” said Rep. Bob Good (R-Va.), a member of the House Freedom Caucus who was involved with discussions on Tuesday. “I think we’re going to come up with something good out of the conference that cuts spending, makes significant reforms and puts us a step closer towards fiscal stability as a country.”

Rep. Dusty Johnson (R-S.D.), chair of the Main Street Caucus, expressed confidence in the plan notching “widespread support throughout the conference.” But he also said there are “a few details to be worked out,” while also taking aim at Biden over the current rate of progress in debt limit talks.  

“The stew is not done cooking,” he said shortly before the text of the bill was released. “But I gotta tell you, the Speaker has brought us a long way in the last couple of months, which is remarkable given the fact that the president refuses to negotiate — and that’s normally how you see the contours of a deal come together.”

McCarthy said that the bill will be led by House Budget Chairman Jodey Arrington (R-Texas), whose relationship with the Speaker recently came under scrutiny after The New York Times reported tensions between the two leaders as Arrington’s committee is crafting a long-term budget resolution.

The $4.5 trillion in “savings” for taxpayers that Republicans say are in the bill also come from a slew of proposals that have already been met with opposition from Democrats, including measures clawing back coronavirus funding previously allocated by Congress that they say has gone unspent and targeting the Biden administration’s student loans forgiveness decision and ongoing repayment pause.

The debt limit bill includes the House GOP’s major energy package passed last month, the H.R. 1 Lower Energy Costs Act.

The bill additionally has measures targeting aspects of the Inflation Reduction Act, a signature piece of Biden’s domestic agenda that Democrats passed without GOP support last year. It would pull roughly $70 billion in an IRS funding boost and end that legislation’s “green giveaways,” McCarthy said in an apparent reference to green energy tax credits.

New work requirements on public assistance programs are also in the bill. That includes beefing work requirements for the Supplemental Nutrition Assistance Program (previously known as food stamps) for those between 50 and 56 years old. There are also changes proposed to the Temporary Assistance for Needy Families program.

A portion of the bill also outlines work requirements for Medicaid, though it does not include changes to Social Security and Medicare — as long promised by Republicans.

In a statement shortly after the bill’s release, Energy and Commerce Committee ranking member Frank Pallone Jr. (D-N.J.) said the proposals would amount to millions being kicked off “their health insurance because Republicans do not believe in our nation’s social safety net.”

“Republicans are creating a debt crisis to justify these cruel plans,” he said, adding: “Let me be clear, this proposal is dead on arrival.”

The White House said Tuesday evening that Biden, Senate Majority Leader Chuck Schumer (D-N.Y.) and House Minority Leader Hakeem Jeffries (D-N.Y.) agreed in a discussion they “won’t negotiate over default.” 

“The president told Leader Schumer and Leader Jeffries that he was ready to have a separate negotiation over the budget once Republicans present their plan, as has been done by both parties in Congress and the White House in the past,” the White House said.

Biden has asked that Republicans release a long-term budget plan before meeting with McCarthy, which is not expected any time soon.

Republicans see their black-and-white asks in a bill as a way to draw Biden to the negotiating table, though much of the package amounts to a Republican policy wish list that faces fierce opposition in the Democratic-led Senate.

Congress is expected to act on the debt limit by sometime this summer when the Treasury Department exhausts the “extraordinary measures” being taken to avoid default, an outcome experts say would cause mass economic turmoil.

Estimates vary as to when the nation will reach the so-called “X-Date,” but some projections say the country faces a possible default threat as early as June. Experts expect more precise estimates the closer the nation comes to the deadline. 

Mychael Schnell contributed. Updated at 4:41 p.m.