Kevin McCarthy's proposal for the looming debt limit would slash federal spending
MICHEL MARTIN, HOST:
You may have been hearing a lot recently about the debt ceiling.
A MARTÍNEZ, HOST:
Yeah, that's the limit on the total amount of government borrowing. The U.S. hit its limit in January. The Treasury Department is using extraordinary measures to avoid the first ever U.S. debt default, but those are on track to run out this summer. There's growing anxiety on Capitol Hill with the looming deadline, and House Speaker Kevin McCarthy and President Biden have been at an impasse on the issue for several months.
MARTIN: Yesterday, McCarthy laid out the House Republicans' legislative demands to stop a default from happening. NPR congressional reporter Barbara Sprunt is with us now to tell us more about it. Good morning, Barbara.
BARBARA SPRUNT, BYLINE: Good morning.
MARTIN: All right. So let's start with the bill itself. What's in it?
SPRUNT: The bill does what McCarthy has long signaled he wants to see happen, increasing the debt limit done in tandem with federal spending cuts. The bill would increase the country's borrowing limit by 1.5 trillion or through March of next year, whichever comes first. It would roll back federal spending levels to those from two years ago, limit the growth of spending going forward to 1% annually, and it would try to unwind some of Democrats' signature legislative accomplishments repealing parts of the Inflation Reduction Act, which funded energy and climate change programs, and prevent the administration from enacting its student loan forgiveness plan, which I should note is still tied up in the courts. And another thing that's getting a lot of attention about this bill are work requirements for adults without dependents who are enrolled in federal assistance programs.
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KEVIN MCCARTHY: By restoring these commonsense measures, we can help more Americans earn a paycheck, learn new skills, reduce childhood poverty and rebuild the workforce.
SPRUNT: The bill would also target the $80 billion aimed at improving the Internal Revenue Service, which Democrats approved last year as part of the Inflation Reduction Act. And that's aimed at easing up the agency's backlog. And it's worth noting that the nonpartisan Congressional Budget Office has estimated that that 80 billion allocated over 10 years for the IRS would increase revenues and that repealing the measure would actually contribute to the deficit.
MARTIN: Now, Barbara, you know, Democrats have been calling on McCarthy to release the details of this proposal that he's been promising for some time now. What are they saying now that he's finally done it?
SPRUNT: Democrats say a lot of these ideas, particularly the work requirement provision we just discussed, are nonstarters. Yesterday, Biden cast McCarthy's plan as something that benefits Wall Street and the wealthy. He said the threat of defaulting on the nation's debt would destroy the economy.
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PRESIDENT JOE BIDEN: Instead of making threats of default if I don't go along with what they want, which should be catastrophic to the country - if we don't do what they say, they're going to let default take place - take default off the table, and let's have a real serious, detailed conversation about how to grow the economy, lower costs and reduce the deficit.
MARTIN: Barbara, before we let you go, it doesn't sound like the president is eager to engage with McCarthy on this. So can you just tell us what's the thinking from the speaker's side? It doesn't seem like this bill is going to go very far in the Democratic-controlled Senate. So what's the logic of this here?
SPRUNT: That's exactly right. The first hurdle for McCarthy is making sure he has the votes in his own conference. He has a very narrow majority in the House. He can only afford to lose a few Republican members and still pass this thing without any Democratic support. Yesterday, as he was leaving the floor after the speech, he told our colleague Deirdre Walsh he feels confident he does have the votes he needs. But as you said, yes, this would be dead on arrival in the Senate. But the thinking is that if Republicans can pass this in the House, it could put some political pressure on Biden to come back to the negotiating table.
MARTIN: That's NPR congressional reporter Barbara Sprunt. Barbara, thank you.
SPRUNT: Thank you. Transcript provided by NPR, Copyright NPR.