Republicans push through on their $1.5 trillion debt limit and the House GOP leadership insists they have the votes to pass it this week, but Wall Street is starting to worry about the possibility of default.
By passing the Limit, Save, Grow Act, Speaker McCarthy hopes to throw the ball in President Biden’s court, even as the White House claims it will not negotiate the debt ceiling.
The bill is not expected to make it anywhere in the Senate.
With the possibility of a deadline that could lead to devastating defaults that could rattle fast-approaching markets around the world, neither McCarthy nor Biden are showing any sign of blinking with their demands — for Republicans, they’re austerity in exchange for allowing that the nation is borrowing an additional $31.4 trillion. For the Democrats, it is a pure increase in the debt ceiling.
“What they’ve done is they’ve brought those two things together: debt ceiling and austerity and we’ve been very, very clear that we’re not going to negotiate when it comes to the full trust and honor of this nation,” said press secretary Karine van the White House. Jean-Pierre told reporters that on Monday.
They are currently holding the economy hostage. We don’t negotiate about that and they have to prevent non-payment.’
The deadline to hit the country’s $31.4 trillion borrowing limit is still unknown, and is expected to land sometime between June and September.
By passing the Limit, Save, Grow Act, Speaker McCarthy hopes to throw the ball in President Biden’s court even as the White House insists it won’t negotiate the debt ceiling
McCarthy said last week 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. year.
But the debt ceiling bill is not a budget proposal — which the White House has demanded to allow McCarthy to meet with Biden to negotiate. Republicans still don’t have a date to release an actual budget.
The proposal spans a wide range of priorities — it would withdraw unused Covid-19 funds and undo some Biden priorities — ban student loan forgiveness and scrap some green tax credits, institute stricter job requirements for social programs. Republicans also want to include their sprawling energy package, the House-approved HR 1, and the rule-cutting REINS bill.
Some conservative hardliners have raised complaints that the work requirements for benefits like SNAP aren’t strict enough — some want recipients to work 30 hours instead of 20 to receive benefits.
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.
Leading sources say the package could be tabled as early as Wednesday — likely wishful thinking with a hard-to-arguable caucus and a slim four-seat majority.
The GOP house whipping team spent the weekend calling to convince holdouts to get behind their package — but some holdouts remain.
The House GOP whip team spent the weekend calling Republican holdouts to convince them to vote for their debt ceiling
Rep. Andy Biggs, R-Ariz., a former chairman of the Freedom Caucus who ran against McCarthy in the speaker’s race, says he still hasn’t decided how to vote on the bill. Rep. Nancy Mace, RS.C., told CNN Monday morning she is voting “against” the bill because of concerns about the green energy facilities it repeals — her state is home to many solar parks, she says.
Rep. Tim Burchett, R-Tenn., also leans toward no, his office told DailyMail.com that he opposes a broad increase in the debt limit and struggles with waiting until 2025 for job requirements to take effect.
Mace insisted the threat of default was a “fear tactic from the left” – saying the country is raking in about 11 times the tax revenue it needs to pay interest on its debts.
But financial executives say the concerns are greater than ever before.
“There’s a perception in DC that the market isn’t panicking enough, and that may be true to some extent,” Alec Phillips, CEO of Goldman Sachs, told Politico. “But I’ve been dealing almost exclusively with this issue for the past few weeks, and there’s even more concern now than there was in 2011,” referring to the latest standoff over the debt ceiling between President Obama and then-GOP Chairman John Boehner.