On Wednesday, April 19th, 2023, House Republicans unveiled legislation that would pair lifting the debt ceiling with steep budget cuts and budget caps for the next ten years. Speaker McCarthy is expected to call a vote on the measure this week, although it’s not certain that he currently has enough votes to pass it through the House; with such a slim majority, he can only afford to lose four votes, and, according to Politico, there may be more than four House Republicans that are either opposed or undecided about how they will vote on the proposed plan.
Secretary of the Treasury Janet Yellen has estimated that the United States will reach its current debt ceiling sometime this summer, though now that the April 17th tax filing has come and gone, a more precise estimate will be announced soon. Congress will need to raise the debt limit before this deadline to avoid defaulting. The House Republican measure would provide two options for lifting the debt limit — increasing the current $31.4 trillion statutory borrowing limit by $1.5 trillion or suspending it through March 31, 2024 — and specify the limit should be reinstated at whichever threshold is reached first.
As predicted, the bill would cap topline fiscal 2024 discretionary spending at the fiscal 2022 level, or $131 billion below the comparable level appropriated for the current fiscal year. House Appropriations Committee Ranking Member Rosa DeLauro (D-CT) requested and received letters from Department leaders detailing the impact of these cuts on programs serving children and families.
The proposal also includes spending caps for a decade, allowing for 1 percent annual growth; appropriations wouldn’t return to the $1.6 trillion fiscal 2023 enacted level for a decade under the plan. The bill does not specifically exclude defense funding from cuts or caps, but it’s widely expected that the defense budget would not be impacted in the same way as the non-defense discretionary budget.
Some of the specifics of the 300-plus page bill include:
- Work requirements in the Supplemental Nutrition Assistance Program (SNAP) and Medicaid. The Center on Budget Policies and Priorities (CBPP) has published a new report with state-by-state estimates of how many people in Medicaid expansion states would lose their health coverage; nationwide, CBPP estimates that over 10 million Medicaid expansion enrollees — more than 1 in 5 of all Medicaid enrollees in expansion states — would be at risk of losing Medicaid coverage under the policy.
- Student loan forgiveness efforts. The bill would roll back several Biden administration actions on student loans, including the ongoing loan repayment pause and a sweeping plan to provide widespread forgiveness that is awaiting a Supreme Court decision. (CONT.)
- Energy Proposals. The bill includes several energy proposals, including the entirety of the GOP’s signature energy package, the H.R.1 Lower Energy Costs Act, which would undo several of the climate change provisions passed in the Inflation Reduction Act last year.
- Coronavirus Relief Funds. The proposal calls for the rescission of unobligated coronavirus funds approved as part of the American Rescue Plan.
Many Democrats were quick to respond to the House Republican plan, calling it unrealistic and not a viable starting point for discussion. In an op-ed this weekend, Ranking Member DeLauro noted,
“For months, I have heard my Republican colleagues claim that defense, veterans’ health care and border security would be protected. This bill does not keep that pledge. It either puts this funding on the chopping block or forces further cuts to other critical government programs by more than 22%. As much as Republicans want to pretend otherwise, these caps are cuts. They would ensure that resources for critical programs remain below current levels for the next 10 years — all for less than one year of preventing a default.”
The White House called the plan a “blueprint to devastate hardworking families.” President Biden, Senate Majority Leader Chuck Schumer (D-NY) and House Minority Leader Hakeem Jefferies (D-NY) have maintained their commitment to passing a “clean” debt ceiling bill and have vowed to not negotiate about raising the debt limit.
Meanwhile, the bipartisan Problem Solvers Caucus in the House released a proposal on April 19th for avoiding a default on U.S. debt if the White House and congressional leadership fail to reach an agreement. The caucus is made up of 31 Republicans and 32 Democrats in the House. The proposal outlines a number of steps to be taken to reach an agreement on the debt ceiling, though at this point Congressional leadership has not taken an interest in the plan.
Even if the proposal passes the House, it will not pass in the Democrat-led Senate. However, it could force Senate Majority Leader Schumer to put forward a proposal of his own and thereby kickstart negotiations.