Kevin McCarthy proposes raising the debt limit by $1.5T to save $4.5T

House Republicans are proposing to raise the debt ceiling by $1.5 trillion or extend borrowing until March 31, 2024, and Chairman Kevin McCarthy plans to vote on the package as early as next week.

McCarthy said on the House floor that the plan, led by R-Texas budget chairman Jodey Arrington, will save $4.5 trillion by limiting spending in 2024 to fiscal year 2022 levels and then limiting growth to 1 percent per year.

President Biden almost immediately knocked off the “Limit Save Grow” act after McCarthy announced it in a floor speech.

Just two days ago, Speaker of the House Kevin McCarthy took to Wall Street to spell out MAGA’s economic vision: massive cuts in programs you count on, massive benefits protected for those at the top. Folks, it’s the same old trickle-down dressed in MAGA attire,” Biden tweeted.

“America is not a dead-end nation,” Biden told a crowd in a speech in Maryland on Wednesday. “Take default off the table,” Biden said in a remark addressed to McCarthy.

Biden told McCarthy to pass a “clean” debt ceiling without giving in to the “crazy” demands of his caucus.

The Limit Save Grow proposal covers a wide range of priorities – it would withdraw unused Covid-19 funds and reverse some Biden priorities – ban student loan forgiveness and scrap some green tax credits, set stricter employment requirements for social programs. Republicans also want to include their sprawling energy package, the House-approved HR 1, and the rule-cutting REINS bill.

After cutting spending to FY 2022 levels, which would be a $131 billion reduction from current levels, Invoice of 320 pages also limits on total discretionary spending or non-defense discretionary spending.

The speaker also slammed Senate Majority Leader Chuck Schumer for staying out of the budget deadlock and instead beating Republicans at bay for pushing for spending cuts when they had previously accepted a clean increase in the debt limit.

“Senator Schumer, he’s just missing an action,” McCarthy said, noting that the Senate has spent its time voting on nonbinding resolutions such as “designating March as Maine’s maple syrup month.”

“I think the Senate can honor maple syrup and basketball teams and negotiate a debt ceiling at the same time.”

The bill would need 218 votes to pass the House, meaning it should walk a line that satisfies moderates and hardliners alike.

McCarthy guaranteed DailyMail.com on Monday that he had his entire conference on board.

“Folks, it’s the same old trickle-down dressed in MAGA attire,” Biden tweeted

McCarthy dissenters had forced the speaker to say he would bring back this Congress’ regular order and single-issue bills in exchange for their vote in the speaker’s race, but the sprawling package goes against that priority as of January.

House Republicans still need to draft a 2024 budget, a condition for meeting President Biden on a debt ceiling deal. McCarthy insists that the budget and debt ceiling are separate.

The GOP’s deal is unlikely to get approval from the Senate or Biden, but McCarthy hopes passing a deal will incite the president to agree to meet with him.

The pair are deadlocked and have not had a meeting on the debt ceiling in more than two months. The country hit its $31.4 trillion loan limit in January and “extraordinary measures” by the Treasury Department bought the country until mid-June to work out a deal.

“Our position is still not to negotiate a default,” White House press secretary Karine Jean-Pierre said again Wednesday.

McCarthy said, “Biden is skipping town to give a speech in Maryland instead of sitting down to address the debt ceiling. He blames the US for the southern border treatment: ignore it and hope it goes away.”

Meanwhile, a bipartisan group of House centrists has released their own framework of a proposal to avoid government default as Congress continues to dole out its 2024 budget.

The Problem Solvers, made up of 31 Democrats and 31 Republicans, outlined four steps to avoid default: suspension of the debt ceiling until December 31, 2023, creation of an independent commission, similar to the Pentagon’s, to determine which bases should be closed, to recommend legislation to stabilize and reduce the deficit, and adopt controls in the 2024 budget to reduce the deficit in the short term.

If all conditions are met, the plan proposes to suspend the debt limit until February 28, 2025.

The caucus is unlikely to convince either party’s leadership to come together for such a plan — Democrats like to blame the Republicans and watch the other side of the aisle squirm to come together for a unified budget .