McCarthy proposes to pair a one-year debt ceiling increase with spending cuts

WASHINGTON – Speaker Kevin McCarthy proposed a one-year debt ceiling increase on Monday, combining spending cuts and policy changes, backing away significantly from earlier demands, but made clear that Republicans would not raise the debt ceiling to avoid a catastrophic debt tranche. conditions.

In a speech from the New York Stock Exchange, Mr. McCarthy said House Republicans will vote “in the coming weeks” on a measure to raise the debt ceiling into next year. Work requirements and multiple regulatory withdrawals for community programs. Just as the presidential campaign reached a critical juncture, a plan that would die on its way to the Senate would set the stage for another funding tussle.

“I don’t prejudge what’s going to happen,” said Mr. McCarthy said in a speech that he had repeatedly called for President Biden to raise the debt limit, and that he was the man standing in the way. “I want a responsible, sensible debt ceiling that puts us on an economic path to make America stronger. It works for every American. But that won’t happen if the president continues to ignore the issue,” he said.

“A debt limit increase without loans will not pass,” he said.

The debt ceiling is expected to be breached in early July unless Congress acts to raise the debt ceiling.

The speech came as divisive Republicans worked to agree on a fiscal plan to meet their demand that such increases be paired with substantial spending cuts. Mr. McCarthy’s outline was considerably narrower.

On Monday Mr. It’s unclear whether the ideas McCarthy has talked about can garner enough support to pass with his party’s slim House majority. When asked in an interview on CNBC minutes after his speech if he had the support of his conference for the plan, Mr. McCarthy stopped short of saying so.

“I think I have the support of America,” he said. “I’ll get the party behind it.”

Given Democratic opposition to spending cuts, Mr. Some GOP lawmakers have traditionally voted against raising the cap no matter which party is in power.

Democrats are trying to line up votes for such a measure. They said McCarthy’s impotence effectively shut down budget discussions because it was unclear what the party’s opening bid would be in any negotiations.

Mr. McCarthy’s decision suggested he was under growing pressure to develop a plan to calm jitters among investors about the grim outlook for a deal to avoid a catastrophic default this summer. Yet he shrugged off such concerns during a question-and-answer session after his speech on Monday, saying “markets go up and down.”

Mr. McCarthy says he plans to freeze spending at last fiscal year’s level, cancel billions of dollars in unspent pandemic relief funds, enact stricter work requirements for food stamp and Medicare recipients, and expand domestic mining and fossil fuel use. Manufacturing, and rolling back federal regulations Republicans consider too burdensome.

In a speech sprinkled with misleading statements and false claims, Mr. McCarthy tried to defend the Republicans’ position on the debt ceiling and Mr. He portrays Biden’s assertion as irresponsible.

Mr. McCarthy said it’s time to get Americans “back to work,” implying that aid approved early in the Covid-19 pandemic has discouraged adults from working. But Labor Department figures show a larger share of Americans aged 25 to 54 — so-called prime-age workers — were in the labor force in March, before the pandemic, than in February 2020.

This is Mr. It’s a move that leaves lawmakers in McCarthy’s conference facing tough re-election battles in swing districts, some of whom have been rattled by calls to cut access to safety net programs.

Mr Trump has been tight-lipped about raising the debt ceiling, saying “I haven’t heard from the White House” since the initial meeting in February. Mr. Biden refused to talk to him. McCarthy suggested strongly. But according to White House and congressional officials, his aides and Mr.

Mr. Biden and his aides insist that Congress raise the debt ceiling without conditions, but say they are open to separate discussions on the president’s federal budget — Mr. While they wait for McCarthy to make an offer once McCarthy prepares a formal budget proposal, White House officials have criticized Republicans’ budget cuts, including proposed limits on job requirements and domestic spending.

“A speech is not a plan, but it’s clear that radical MAGA Republicans’ wish lists will impose devastating cuts on hardworking families, send manufacturing overseas, take health and food assistance away from millions of people, and increase energy costs. Trillions in tax cuts for the super-rich and corporations.” added to the debt,” White House spokesman Andrew Bates said Monday.

At a news conference in Washington, Senator Chuck Schumer, Democrat of New York and the majority leader, was even more blunt.

“If Speaker McCarthy continues in this direction, we’re going to default,” he said.