Republican McCarthy Unveils Plan to Lift US Debt Ceiling, Cut Spending

Reuters | By Andy Sullivan
 
WASHINGTON, April 19 (Reuters) - Republican U.S. House Speaker Kevin McCarthy on [last] Wednesday unveiled a plan to raise the nation's debt ceiling by $1.5 trillion and cut federal spending by three times that amount, laying out an opening position in what is likely to be a tense partisan debate over government borrowing.
 
McCarthy's proposal, which he unveiled on the floor of the House of Representatives, would cut the total amount of domestic and military spending to 2022 levels and cap growth at 1% annually in years to come. It would not touch retirement and health programs that are projected to expand dramatically as the population ages.
 
President Joe Biden and the Democratic-controlled Senate are likely to reject the proposals, but McCarthy said they would serve as the basis for negotiations between the two parties over raising the federal government's $31.4 trillion debt limit in the coming weeks. Failure to raise the debt ceiling would lead to default that would shake the U.S. and world economies.
 
McCarthy's plan would also repeal green-energy incentives signed into law by Biden last year, boost domestic oil and gas production and scrap his $400 billion student-loan forgiveness effort.
 
It would claw back unspent COVID-19 relief money, cancel a recent budget increase for the Internal Revenue Service and impose stiffer work requirements for some benefit programs.
 
Congress would gain greater power to block Biden administration regulations under the proposal as well.
 
McCarthy said the package would lower spending by $4.5 trillion over the coming 10 years. That would not be enough to eliminate budget deficits that are projected to add more than $20 trillion to the national debt over that time period.

Read Full Article