Republicans’ plan on a pathway to lift the debt ceiling is taking shape ahead of lawmakers’ return to Congress next week.
Under the current proposals, the GOP is planning to extend the debt limit until roughly May 2024 so long as it is paired with dramatic rollbacks in spending, such as a limit in budgetary growth to 1% a year over the next decade, Puck News reported. Such an offer is almost certainly dead on arrival.
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The plan being crafted also appears to take aim at some of Biden’s gains, including slashing certain green tax credits, barring student loan forgiveness, imposing work requirements for government benefits, scrapping unspent COVID-19 funds, and enacting the GOP’s energy plan, per the report.
Another measure reportedly being considered is a $584 billion cap on nondefense discretionary expenses. Rep. Garret Graves (R-LA) has been spearheading efforts to hash out the details of the proposal.
Since being sworn in earlier this year, Congress has been deadlocked over how to address the debt ceiling impasse, which has the potential to trigger a national default. Biden and the Democrats have demanded a clean package without poison pills, while House Speaker Kevin McCarthy (R-CA) and the GOP have demanded spending cuts.
Neither side has shown signs of blinking. Biden unveiled a $6.9 trillion spending package last month and has chided GOP leadership for not producing a plan of their own. The White House has also latched on to the House Freedom Caucus over its principles for budgetary reforms released last month.
McCarthy is set to deliver a speech on the state of the economy at the New York Stock Exchange next Monday.
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In January, the United States reached its $31.4 trillion debt limit, preventing the government from borrowing additional money. Last year, Congress greenlit a budget package with massive deficit spending.
To keep programs going, the Treasury has been undertaking “extraordinary” measures by shuffling funds from various accounts. However, those measures are projected to run dry sometime between June and September, according to various estimates. If that were to happen, funding for various programs will be in jeopardy, possibly including interest payments on the debt.
