House Speaker Kevin McCarthy (R-CA) announced on Monday that lawmakers would soon vote to raise the debt ceiling for one year and seek to slow spending increases for federal agencies.
The debt ceiling, a measure established by Congress that disallows the federal government from spending beyond the predetermined debt limit of $31.4 trillion, surpassed the threshold earlier this year. Treasury Secretary Janet Yellen warned lawmakers that she was forced to implement “extraordinary measures” to fund the government until early June, after which the government will default on obligations unless lawmakers suspend or raise the debt limit.
McCarthy said in remarks delivered before the New York Stock Exchange that House Republicans would “vote on a bill to lift the debt ceiling into next year” in the “coming weeks.” The legislation would return expenditures to fiscal year 2022 levels and limit annual spending growth to 1% over the next decade.
“Don’t believe anyone who says these are draconian limits. They’re the same spending levels we operated under just last October,” McCarthy told Wall Street executives. “But the bloated, overgrown bureaucracy that has expanded under President Biden needs to be pruned, and that’s exactly what we’ll do. If Washington wants to spend more, it will have to come together to find savings elsewhere, just like every household in America does.”
McCarthy repeatedly slammed Biden for refusing to continue negotiations on possible spending cuts over the past several weeks. “The longer President Biden waits to be sensible, to find agreement, the more likely it becomes that his administration will bumble into the first default in our nation’s history,” he continued. “Let me be clear: a no-strings-attached debt limit increase cannot pass. But since the President continues to hide, House Republicans will take action.”
The federal spending plan McCarthy offered largely matches a framework issued by members of the House Freedom Caucus, a bloc of conservative Republican lawmakers who said they would consider voting to raise the debt ceiling contingent upon acceptance of their framework. The lawmakers previously forced McCarthy to accept various concessions, such as adopting budgets that did not allow the debt limit to increase and only voting on single-subject bills before they cast affirmative votes as he sought control of the gavel.
Biden unveiled a budget proposal last month that would increase expenditures from $5.8 trillion to $6.9 trillion over the next fiscal year while reducing cumulative deficits by $3 trillion over the next decade through several tax hikes on businesses and wealthy individuals.
“In his unserious budget proposal, President Biden wants to spend more this year than the government did during the height of the pandemic,” McCarthy commented. “Just think about that. House Republicans believe the opposite should happen: before we borrow another dime, we owe it to our children to save money everywhere.”
Business leaders and government officials have cautioned that a national debt default would likely induce a worldwide financial crisis. Present increases in the national debt, on the other hand, are unsustainable: the federal government’s current outstanding obligations surpass $31.5 trillion, equivalent to roughly 120% of the nation’s gross domestic product, while maintenance costs are increasing due to a recent rise in interest rates.