Speaker Kevin McCarthy (R-Calif.) on Monday took his case for spending cuts to Wall Street, going after President Biden and detailing the House Republican Conference’s plan to move forward with its own measure “in the coming weeks” to stave off a national default.
“In the coming weeks, the House will vote on a bill to lift the debt ceiling into the next year,” McCarthy said in remarks at the New York Stock Exchange on Monday, the same day Congress is set to return after a two-week recess.
The Speaker said the forthcoming plan will seek to limit federal spending, with proposals to return discretionary funding levels to 2022 levels “and then limit the growth of spending over the next 10 years to 1 percent of annual growth,” without “touching Social Security and Medicare.”
McCarthy reiterated calls for tougher work requirements, as more Republicans set their sights on potential changes to the Supplemental Nutrition Assistance Program (SNAP), previously known as the food stamps program.
“Assistance programs are supposed to be temporary, not permanent,” McCarthy sounded off. “A hand up, not a handout.”
Negotiations between the White House and House Republicans over how to act on the debt limit, which caps how much money the Treasury can owe to cover the country’s bills, remain at a standstill.
Democrats have pushed for a clean bill to raise the debt ceiling, insisting negotiations over government spending be carried out separately from debt limit talks.
But Republicans see the debt ceiling as a leverage point to secure concessions from Democrats that could help curb spending. The party has vowed to increase fiscal discipline and carry out significant spending reforms upon reclaiming control of the House earlier this year.
House GOP leaders say the conference is largely unified behind calls to pair action on the debt limit with fiscal reform. But the party faces a tall challenge in winning the 218 Republican votes necessary for passage in the lower chamber, if Democrats withhold support.
During an appearance on CNBC later on Monday, McCarthy was asked if he had the support of his party for his proposals.
“I think I have the support of America,” McCarthy said in response, “because I’ll get the party behind it.”
A GOP-backed debt ceiling plan that passes along partisan lines in the House would likely face tough odds in the Democratic-led Senate. But the plan comes Republicans are looking to dial up pressure on Biden for refusing to come to the table in talks to raise the debt limit.
“For 75 days, the president has ignored the debt ceiling,” McCarthy said. “As Speaker of the House, I have a responsibility to tell the nation that has got to stop.”
In his pitch to Wall Street to cut spending, McCarthy said he had “full confidence” that reducing federal spending would help “grow our economy” and “end the dependence on China.”
“We will curb inflation and we will protect Social Security and Medicare for the next generation, and America will be stronger for it,” he said. “If you agree, don’t sit back, join us.”
Democrats were quick to return fire over McCarthy’s comments.
Senate Majority Leader Charles Schumer (D-N.Y.) knocked McCarthy’s proposal to only raise the debt ceiling for one year, potentially laying the groundwork for another partisan fight over the nation’s borrowing limit ahead of the 2024 presidential election. He warned, “If Speaker McCarthy continues in this direction, we are headed to default.”
“Amazingly, one of the few specifics [Speaker] McCarthy has presented is his terrible idea to kick the can down the road for just one year and undergo the same crisis again,” he said. “Why would anyone want to undergo this crisis again, again and again?”
“President Biden and I are happy to meet with the Speaker when he has something to talk about — a plan,” he added. “I’m sure most Democratic leaders are willing to meet with him. But we first need to see his plan so we can start there and work to avoid catastrophic default.”
The Treasury Department said in January that it began to implement what it called “extraordinary measures” to prevent a default, after the national debt came up on the roughly $31.4 trillion cap set by Congress more than a year ago.
It’s unclear when the nation will reach the so-called “X-Date,” or when the Treasury will exhaust those measures, but Congress is expected to have until sometime in the summer to raise the debt limit or risk a default.
Experts have warned a default could yield catastrophic effects for the economy, including raising the risks of recession and potentially a global financial crisis. And Democrats have pointed to those concerns to argue the need to raise the debt limit without conditions.
But in his comments on early Monday, McCarthy sought to put the onus on Biden for the potential threat of a default.
“Make no mistake, the longer President Biden waits to be sensible to find an agreement, the more likely it becomes that this administration will bumble into the first default in our nation’s history,” he said, as Congress braces for yet another partisan battle over the debt limit later this year.
The debt limit was last raised by Congress in late 2021, but not without a months-long game of chicken that ensnared both sides of the Senate until not long before the deadline.
Updated at 3:45 p.m.