House Republicans Pass Legislation To Increase Debt Ceiling But Also Cut Future Spending

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  • Source: Wayne Dupree
  • 04/27/2023
In a triumph for Speaker Kevin McCarthy (R-Calif.), House Republicans on Wednesday backed a package to increase the borrowing ceiling and enact significant spending cuts. This came after days of difficult talks that exposed the stark divides within the GOP caucus.

The Limit, Save, Grow Act passed the chamber by a vote of 217 to 175 votes. Reps. Ken Buck of Colorado, Matt Gaetz of Florida, Andy Biggs of Arizona, and Tim Burchett of Tennessee all voted against the measure.

The package underwent a number of last-minute, late-night changes before the vote to win over a number of GOP legislators whose opposition had threatened to torpedo the bill in the slim majority.

The head of the Republican Study Committee, Rep. Kevin Hern (R-Oklahoma), said that having a smaller majority requires a lot of effort. "You have to manage the questions and the expectations of members who may be concerned about how that will affect them back home or what they have a problem with personally," the speaker said.

The plan has little chance of passing in the Democratic-controlled Senate, where Majority Leader Chuck Schumer (D-NY) on Wednesday referred to it as "an extremist hard-right agenda." However, House Republicans regard the proposal as their opening counterproposal in discussions with President Biden over raising the country's borrowing cap.

The White House has been clear that it wants a "clean" debt ceiling hike while criticizing the GOP plan, indicating the difficulty that both parties would have in reaching an agreement to avert a default.

After the vote, McCarthy told reporters that the president could no longer ignore by refusing to negotiate. "Sen. Schumer, if he believes he has a proposal, put it on the table and see if you can pass it; after that, we can have a conference. However, the president is no longer able to jeopardize the economy.

After the vote on Wednesday, White House press secretary Karine Jean-Pierre reiterated the administration's desire for a debt ceiling increase "without conditions," saying that Biden "has made clear this bill has no chance of becoming law."

The measure would increase the debt limit by $1.5 trillion or until the end of March 2019, whichever occurs first, in return for a number of Republican proposals to cut federal spending that, according to the Congressional Budget Office (CBO), total $4.8 trillion.

The proposed legislation would set a fiscal 2022 budget ceiling for government expenditure and curb yearly spending growth at 1% for the next ten years. 

Other proposals inserted inside the package would stop the popular Biden administration student loan policies, strengthen the job requirements for assistance programs like the Supplemental Nutrition Assistance Program (SNAP), and recoup funding for the coronavirus that have already been authorized but not used.

Even as late as Tuesday night, it looked that the package was in jeopardy because a number of lawmakers either promised to vote against it or indicated that they were inclined to do so. 

Rep. Nancy Mace (R-S.C.), a moderate Republican, expressed concern that the bill would eliminate green tax credits and would not reduce the deficit enough. Midwestern Republicans, including all four Iowa lawmakers, wanted to have those provisions removed. Conservatives also pushed for tougher work requirements.

In spite of the worries of his colleagues, McCarthy said on Tuesday that he would not amend the measure.  However, it was finally successful when the Speaker and GOP leaders gave in to Republican holdouts and amended key provisions over night in order to maintain support despite growing intra-party resistance.

Top Republicans agreed to establish TANF and SNAP work requirements in fiscal 2024 rather than fiscal 2025, and they eliminated measures that would have eliminated tax incentives for biofuels. A part of the law that removes tax credits for alternative fuels and sustainable aviation fields for people who had previously been qualified for them received a grandfather provision as a result of the conference.

Rep. George Santos (R-NY), who said last week that he was a "hard no" because he wanted stricter work requirements, and the Iowa delegation were among the GOP holdouts for whom those changes were sufficient to change their minds.

Wednesday afternoon, Mace changed her mind and informed reporters that she would vote in favor of the plan, giving Republican leaders another boost. McCarthy promised to collaborate with her on future measures to cut the nation's estimated $31.4 trillion debt.

In the Speaker's office, Mace met with McCarthy. "I feel heard by the Speaker, and I will support the debt-ceiling vote today because he listened to my concerns, he's willing to work with us on our concerns about balancing the budget, and that was meaningful, it was productive, and I believe it's going to be fruitful in the near future," Mace said as she left the meeting.

However, bringing Biden and Senate Democrats to the bargaining table is perhaps the biggest obstacle facing Republicans.

Democrats have referred to the legislation as the "Default on America (DOA) Act," while Biden administration officials have attempted to highlight the potential consequences the planned cutbacks may have on both government operations and the American people.

"The Default on America Act does that. Not only that, but it would also remove almost 142,000 additional jobs that have been added since the Inflation Reduction Act was implemented, including 18,000 manufacturing jobs, Schumer stated on Wednesday.

"If you're a parent struggling to pay for child care, the Default on America Act will eliminate more than 105,000 child care slots across the country — making it harder for parents to find work, finish their education, or even provide for their families," he said.

Following the national debt exceeding the nearly $31.4 trillion ceiling in January, Republicans who supported the law hailed the cutbacks as a way to restore order to the nation's finances. The law may contribute nearly $4.8 trillion toward deficit reduction over the next ten years, according to a Tuesday CBO projection. 

Republicans regard the legislation as a beginning point in debt ceiling talks with Democrats, who have so far refused to negotiate, even though it faces steep odds in the upper chamber. 

Rep. Garret Graves (R-La. ), a close McCarthy friend, said, "Look, the president said that I want to see your plan," stressing that the measure contains "much more specificity" than more general ideas unveiled by House GOP leaders that Democrats have criticized. 

He had previously told The Hill, "I believe that this is definitely a start in the right way, and we need to get it going and have genuine conversations.

"It's long past time that President Biden gets off the sidelines and does his job and gets to the negotiating table with Speaker McCarthy," said House Majority Leader Steve Scalise (R-La. ), adding that "we can solve this problem and put America on a stronger financial footing that will benefit all Americans."

Democrats may not feel pressured to discuss budgetary changes with Republicans after the bill's approval since some have already overstated its potential influence on bipartisan debt limit negotiations. 

"I mean, if there'd been the slightest effort to accommodate Democrats, if they tried to get one Democrat vote, if the proposals weren't on their face preposterous, then perhaps we might feel that way," said Sen. Sheldon Whitehouse (D-R.I.), head of the Senate Budget Committee.

Others claim that the work required to push the partisan measure through the lower chamber highlights the challenges Republican leaders may face in the coming months in passing a bipartisan plan.

"I'm not sure what lies ahead. Rep. James McGovern (D-Mass. ), the leading Democrat on the House Rule Committee, stated on Wednesday that they had spent a lot of time trying to convince their own colleagues to take this course. They worsened the bill, in my opinion, yesterday night.

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