The House of Representatives will vote to lift the nation’s debt ceiling until sometime in 2024, according to Speaker Kevin McCarthy (R-Calif.), relieving anxiety about a potential default on U.S. financial obligations.
The speaker made the announcement in a speech at the New York Stock Exchange on April 17, during which he also outlined the broad strokes of a Republican plan to reduce federal spending, which will also be voted on by the House in upcoming weeks.
The announcement seemed to be aimed at increasing pressure on President Joe Biden to enter into negotiations over raising the debt ceiling, which have been at an impasse since Biden announced his 2024 budget proposal on March 9.
Republicans have refused to pass an increase in the federal debt ceiling until the president agrees to negotiate on future spending cuts. Biden has refused to enter talks until the GOP releases the specifics of their plan to limit spending, something it has not done until today.
Other than the statement that the House would vote on a bill to “lift the debt ceiling into the next year,” the speech contained little new information. The Republican demands on spending limitations have been floated by various GOP members for some time.
McCarthy did not further define the mechanism or end date of “lifting” the debt ceiling. However, the extension would create a longer window for negotiations and push a final vote on the debt ceiling into a presidential election year.
Other provisions of the Republican plan include returning discretionary federal spending to 2022 levels, capping spending growth at 1 percent for the next 10 years, taking back unspent money granted to states for COVID-19 relief, and restoring work requirements that “ensure able-bodied adults without dependents earn a paycheck and learn new skills.”
McCarthy cast the plan as a commonsense effort to limit federal spending, save taxpayer money, and grow the American economy.
White House Response
The White House responded quickly to McCarthy’s remarks by repeating their own familiar talking points on the subject of the debt ceiling.
“Speaker McCarthy is breaking with the bipartisan norm he followed under Trump by engaging in dangerous economic hostage taking that threatens hard-working Americans’ jobs and retirement savings. In 2019, Donald Trump himself said, ‘I can’t imagine anybody ever even thinking of using the debt ceiling as a negotiating wedge.’ This morning, Speaker McCarthy did just that,” Andrew Bates, White House deputy press secretary, said in a statement.
“A speech isn’t a plan, but it did showcase House Republicans’ priorities. Rather than ask the super-wealthy to pay their fair share, they propose cutting services for veterans. Rather than cut spending to Big Pharma, they propose sending manufacturing jobs overseas to countries, including China.”
In his speech, McCarthy insisted that the country would strengthen the economy without weakening social supports.
“Don’t believe anyone who says our plans hurt American social safety net. We are a very generous nation. And when people fall on tough times, we’ll help them. That will not change.”
Foreign and Domestic Concerns
In making the case for reduced spending, McCarthy articulated concerns about both the health of the U.S. economy and its position as a global leader.
“This president has embraced a fantasy that debt doesn’t matter, that money can always be created out of thin air, and that the solution to higher prices caused by reckless spending is just higher taxes,” McCarthy said.
“Biden along with the Democrats in Congress have added $6 trillion to our national debt, which created inflation and made us more dependent on China. It has undermined Medicare and Social Security. Today, it’s the American people who are left paying the price,” McCarthy said.
McCarthy cited information from the Congressional Budget Office indicating that interest on the national debt would total $10.5 trillion over the next decade, which he said is more than the total amount paid in interest over the last 85 years.
In a question-and-answer session following the address, the speaker amplified his views on U.S. competitiveness.
“The president of France, Macron, the only foreign leader President Biden has done a state dinner for, went to see President Xi, came back and told Europe we should become less dependent upon America. That’s our ally,” McCarthy said.
“We should not ignore that movement away from the dollar,” McCarthy said, noting that some countries are developing stronger economic ties with China. “But one thing I will tell you: the only way the dollar fails to become the world currency is not what China or other countries do. It’s spending too much. And spending too much money, putting ourselves in $31 trillion of debt, is a greater threat than Brazil using the yuan.”
Breaking the Impasse
Much of McCarthy’s speech attempted to portray the president as being reckless with the U.S. economy by refusing to negotiate, a charge both men have traded in the past.
After an initial meeting between the two on Feb. 1, Biden has routinely accused the GOP of holding the economy hostage by refusing to raise the debt limit.
The debt limit does not authorize new spending, but allows the government to borrow money as needed to pay for spending commitments already authorized by Congress. Failure to raise the limit endangers the “full faith and credit of the United States” by risking a default on the nation’s obligations, the president has said.
McCarthy has made similar charges against the president. “Your partisan political games are provoking the very crisis you claim to avoid,” he said in the speech on April 17.
“The longer President Biden waits to be sensible, to find an agreement, the more likely it becomes that this administration will bumble into the first default in our nation’s history.”
McCarthy said Congress would vote on the plan outlined in his speech sometime in the coming weeks, but did not offer a precise timeframe.
From The Epoch Times