Global Courant 2023-04-20 01:56:07
WASHINGTON— Speaker of the House Kevin McCarthy unveiled a Republican debt ceiling plan Wednesday that includes $4.5 trillion in spending cuts, drawing immediate resistance President Joe Biden while their deadlock rather intensified possible government bankruptcy this summer.
McCarthy’s “Limit, Save, Grow Act” would return discretionary spending to fiscal year 2022 levels, limit spending growth to 1% per year, reallocate unused COVID funds and limit other government spending, the Republican speaker said. The cuts would be linked to a $1.5 trillion increase in the debt ceiling.
“President Biden has a choice,” McCarthy said in a speech from the House of Representatives. “Come to the table and stop playing partisan political games, or cover his ears, refuse to negotiate and risk working his way into the first default in our nation’s history.”
More: Speaker McCarthy and House GOP race to unveil and unite behind debt ceiling proposal
U.S. House Speaker Kevin McCarthy (R-CA) addresses reporters on Capitol Hill in Washington, DC, on April 19, 2023. (Photo by Stefani Reynolds/AFP) (Photo by STEFANI REYNOLDS/AFP via Getty Images) ORIG FILE ID: AFP_33DH46U .jpg
Biden: The McCarthy plan would hurt “hard-working” people the most
The debt ceiling is the maximum amount the U.S. government can spend on its existing obligations, including Social Security and military salaries. Treasury Secretary Janet Yellen informed Congress earlier this year that the US could default as early as June.
Biden responded to McCarthy by reaffirming that he will not negotiate the debt ceiling, which he says should be raised by Congress without parameters, as it has under previous presidents, including Donald Trump.
“Guess what? He’s trying to make it happen now,” Biden said in remarks at a union building in Accokeek, Maryland, minutes after McCarthy revealed his plan. “Massive cutbacks on programs you count on. Massive benefits protected for those at the top.”
US President Joe Biden speaks about the economy at the International Union of Operating Engineers Local 77 facility in Accokeek, Maryland, on April 19, 2023. (Photo by Jim WATSON/AFP) (Photo by JIM WATSON/AFP via Getty Images) ORIGINAL FILE ID: AFP_33DH63D.jpg
Biden said a government bankruptcy, if the debt ceiling is not raised, would “destroy this economy. And who do you think it will hurt the most? You. Hard-working people.”
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McCarthy’s proposed cuts
McCarthy said the legislation would revoke funding for 87,000 IRS agents outlined in Biden’s Inflation Reduction Act, end tax incentives for companies investing in green energy and eliminate Biden’s student loan forgiveness plan.
Other proposed cuts include raising the age limit for work requirements to receive federal food aid from the Supplemental Nutrition Assistance Program, or SNAP, from 50 to 56 years old. The bill would also prevent the Biden administration from restricting consumers’ access to gas stoves or ovens — another rallying cry for Republicans.
More: Why Joe Biden refuses to negotiate with Republicans amid debt ceiling deadlock
Why McCarthy has now released a debt ceiling plan
For weeks, the White House has been challenging Republicans to release their spending plan after Biden proposed a $6.9 trillion budget in March, including billions in new taxes aimed at the wealthy and businesses to grow the government’s social safety net.
“Now that we have introduced a clear plan for a responsible increase in the debt limit, they have no excuse and are refusing to negotiate,” McCarthy said. “The president is ignoring the debt crisis.”
It’s unclear whether McCarthy’s bill has the votes to pass the Republican-controlled House, and it has virtually no chance of passing in the Democrat-controlled Senate. But McCarthy’s ultimate goal is not to pass, but to force Biden to start with entertaining cuts.
Biden denounced McCarthy’s plan as a “MAGA economic agenda” that cuts taxes for the rich and benefits for the middle class.
“It’s not about fiscal discipline,” Biden said. “It’s about cutting benefits for people they don’t seem to care much about. It’s about finding ways to squeeze more of America’s middle class.”
If the federal government defaults on its payments, Americans could see consequences such as a stock market crash, a recession and a rise in unemployment. experts told USA TODAY.
But neither side is blinking for now.
Reach Joey Garrison on Twitter @joeygarrison.
This article originally appeared on USA TODAY: McCarthy, GOP debt limit plan proposes $4.5 trillion in cuts
