House Republicans voted to raise the debt ceiling in exchange for steep spending cuts, in an effort to up the pressure on President Joe Biden to negotiate over raising the nation’s borrowing limit.
The House voted 217-215 along party lines to raise the debt ceiling by $1.5 trillion, which would allow the United States to not default on its debt until the end March 2024. Only four Republicans – Representatives Tim Burchett of Tennesseee, Andy Biggs of Florida, Ken Buck of Colorado and Matt Gaetz of Florida – voted against the legislation.
The nonpartisan Congressional Budget Office estimated that the legislation would reduce budgt deficits by $4.8 trillion in the next decade. But Moody’s Analytics warned that the legislation “would cut into near-term economic growth if passed into law” and compared to a clean debt limit increase, would likely reduce growth in Gross Domestic Product.
The vote is a victory for House Speaker Kevin McCarthy as only a handful of Republicans defected and voted against the legislation while every Democrat voted against it.
“Today’s vote also sends a clear message to President Biden – continuing to ignore the problem is not an option,” House Republican leadership said in a statement. “The President must come to the table to negotiate.”
The bill, however, is dead on arrival in the US Senate, where Democrats hold a majority, as it would also roll back major parts of the Inflation Reduction Act, the major climate legislation that they passed last year when they controlled both Houses of Congress.
“This bill is DOA,” Senator Jeff Merkley of Oregon said. “And what they’re really trying to do is spend two-thirds of the bill trying to put more fossil fuel, climate warming gases into the air. They’re hellbent on destroying the planet instead of making America thrive.”
The bill serves as a symbolic GOP victory meant to put pressure on Mr Biden to negotiate with Republicans before the US actually hits the debt ceiling sometime this summer or early fall.
Mr Biden, for his part, has said he is “happy” to meet with Mr McCarthy.
“But not on whether or not the debt limit gets extended. That’s not negotiable,” Mr Biden added, during a White House press conference with South Korean President Yoon Suk Yeol. Rather, Mr Biden has said he wants a “clean” debt limit increase where the debt ceiling is raised without any stipulations. Republicans have argued that spending must be cut and that the debt limit offers such an opportunity to do so.
Along with rolling back the Inflation Reduction Act, the legislation would impose work requirements for welfare programs and rescind Mr Biden’s student debt forgiveness for up $10,000 in student loans and up to $20,000 for Pell Grant recipients.
Senate Majority Leader Chuck Schumer criticised the efforts to stop student debt relief, which Republicans call a giveaway to the wealthy.
“President Biden’s plan is not a giveaway to high earners,” he said on Wednesday. “In fact, it’s a lot of very, very wealthy people who never want to see the government help anybody except themselves who seem to push this idea of getting rid of the President’s plan. President Biden’s plan is a ladder up to the middle class for millions of Americans who need it most.”
It would also curtail funding for the IRS that was passed in the Inflation Reduction Act, which Republicans have said would add 87,000 new IRS agents.
But Senate Minority Leader Mitch McConnell urged Mr Biden to negotiate.
“House Republicans just passed a plan to rein in Democrats' reckless spending. President Biden's last phony excuse for not doing his job has run out,” he said in a statement. “It’s way past time for the President to sit down with Speaker McCarthy and negotiate a bipartisan path forward on the debt ceiling.”
