“We are introducing the Limit, Save, Grow Act of 2023,” McCarthy, R-Calif., said on the House floor, adding that it would “responsibly raise the debt limit into next year” and save trillions of dollars.
The proposal to avert default would be tied to conservative policies, including cutting federal spending to 2022 levels, limiting growth to 1% per year, repealing enhanced IRS enforcement funding, undoing President Joe Biden's federal student debt forgiveness and rescinding unspent pandemic relief funds, McCarthy said.
McCarthy told reporters it would lift the debt ceiling by $1.5 trillion or extend it through March 31, “whichever comes first.” The 320-page bill, published moments after his speech, will be led by House Budget Committee Chair Jodey Arrington, R-Texas, he said.
It's not clear that the plan, it is the biggest test for McCarthy since his long battle to become speaker, will get the votes to pass the House.
Republicans have a narrow majority and can afford only four defections before the legislation collapses, with Democrats expected to vote against it en masse. McCarthy said he hopes to put the bill to a House vote next week and expressed confidence it will pass.
“We’re going to work through it, but yeah, we’re going to get there,” he said. “I never give up. We’ll get them.”
McCarthy’s move is an attempt to pressure Biden to make policy concessions to avert a calamitous debt default as early as June. Biden has refused to negotiate, and he has said Congress should allow the U.S. to pay its bills without conditions, a position McCarthy has blasted as irresponsible.
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.”
But if the House passes a measure, it could raise the pressure on Senate Democrats to craft their own competing bill.
Biden, Schumer and House Minority Leader Hakeem Jeffries, D-N.Y., spoke by phone Tuesday, and they “agree that we won’t negotiate over default and Republicans should pass a clean bill like they did three times in the previous administration,” the White House said.
A memo Tuesday by Goldman Sachs’ economic research team said the debt limit deadline could come earlier than it had expected.
“While the data are still very preliminary, weak tax collections so far in April suggest an increased probability that the debt limit deadline will be reached in the first half of June,” the memo read. “We have been projecting that Treasury could operate without a debt limit increase until early August.”
The Treasury Department has set a June 5 deadline for Congress to extend the debt limit or risk default for the first time in U.S. history.