Yesterday, the House of Representatives passed a debt ceiling bill, largely along partisan lines, that reflects a common-sense approach to addressing the federal government’s spending and our nation’s financial future.
The Limit, Save, Grow Act pairs an increase to the debt ceiling by $1.5 with needed spending cuts as well as other policies that would undo some of the radical Biden climate-change agenda, stave off an IRS hiring bonanza, and promote work rather than government dependency in America.
The bill passed 217-215, with four Republicans joining every Democrat in voting “No” on the legislation. The ball now swings to President Biden’s court as calls increase for him to negotiate with conservatives to raise the debt ceiling in a responsible way.
- Raises the debt ceiling by $1.5 trillion to prevent the U.S. from defaulting on its debt sometime this summer. The next borrowing limit would be reached on March 31, 2024.
- Cuts $130 billion in federal spending this fiscal year and caps any spending increase at 1% per year for the next decade
- Saves $4.8 trillion through FY 2033 according to the Congressional Budget Office (CBO) with about $4.3 trillion of policy savings and $545 billion of interest savings.
- Reduces debt by about $4.8 trillion
- Rescinds $50-$60 billion unspent COVID relief funds
- Repeals most of the misleadingly-named Inflation Reduction Act’s (IRA) energy and climate tax credit expansions saving $271 billion – $1.2 trillion
- Rescinds about $71 billion IRS funding in the IRA to hire 87,000 new agents
- Changes to energy, regulatory, and permitting policies
- Cancels President Biden’s student debt cancellation and Income-Driven Repayment (IDR) expansion saving $465 billion
- Imposes or expands work requirements in several federal safety net programs: Medicaid, the Supplemental Nutrition Assistance Program (SNAP), and Temporary Assistance for Needy Families (TANF) beneficiaries.
According to a CBS News/YouGov poll from last week, Americans support raising the debt ceiling, especially if it means the U.S. would default without doing so.
The President and his advisors refuse to negotiate demanding a “clean” debt ceiling bill, meaning no spending cuts. The folly of this position for the American people is that raising the debt ceiling with no spending cuts will only accelerate hardship from our burgeoning $31 trillion debt.
President Biden’s position is akin to a person recklessly racking up substantial credit card debt and then asking the bank to raise his credit card limit even higher but with no plan or intention to pay down his credit card balance or slow down on spending. It’s irresponsible.
Limit, Save, Grow is a plan to cut down on spending now and in the future.
The intention behind work requirements is to get more Americans back to work given that nearly 6 million people are unemployed despite 9.9 million open jobs so that companies can boost production and increase economic growth.
President Biden faces calls from his own party to negotiate with conservatives now that this bill has been passed.
The missing element from all of these discussions is entitlement reform. If Congress fails to enact any reform to the political “third rail” programs, seniors will experience cuts.
As my colleague May Mailmen wrote in Real Clear Policy,
Social Security taxes workers to pay retirement benefits to seniors 67 and older. In 2022, we spent $1.2 trillion on a senior population of 49 million and another $9 million on disabled workers. (Lest the word “trillion” sound trite, if you go back 1 trillion seconds, you’d be in 30,000 B.C.) The program currently runs in the red and will run out of money in roughly 10 years, at which point the average retiree will face an approximate $5,000 annual cut in benefits.
Medicare provides health insurance for people aged 65 and older. In 2022, the United States spent $767 billion on the program, which covers around 80 million elderly and disabled people. Medicare will be insolvent in 2028.
Raising the nation’s ability to borrow with no plans to curb out-of-control spending is a no-go. The debt ceiling offers an opportunity to enact restraint in spending that both parties have lacked in the past.
We’ll continue to follow these debt ceiling negotiations.