House Speaker Kevin McCarthy’s legislation to raise the federal debt limit by $1.5 trillion in exchange for $4.5 trillion in spending cuts is getting praise from at least one prominent budget watchdog.
The Committee for a Responsible Federal Budget released an analysis Friday of the House Republicans’ 320-page debt limit bill. The think tank found that upon first look the legislation appears to make good on its promise to improve the nation’s “dreadful fiscal outlook” best summed up by the more than $31 trillion national debt.
“This bill is not sufficient to bring our debt to manageable levels but is a realistic and extremely welcome first step,” said CRFB President Maya MacGuineas. “This is a reasonable proposal, which would generate significant savings at a time when the nation desperately needs them.”
House Republicans are proposing to raise the debt limit until May 31, 2024. In exchange, they want to cut federal spending by $130 billion for the upcoming fiscal year and limit future budget growth to 1% annually over the next decade.
GOP lawmakers also want to rescind at least $90.5 billion unspent COVID-19 relief and cancel President Biden’s student loan forgiveness program. The CRFB estimates the latter would save taxpayers $500 billion over the next decade.
The legislation also repeals major portions of Mr. Biden’s $739 billion climate change law, including $80 billion in IRS funding and more than $200 billion in green-energy tax credits.
“President Biden’s reckless spending created record inflation, made us more dependent on China, and undermined Social Security and Medicare,” Mr. McCarthy said.
Beyond cutting spending and restructuring the social safety net, the legislation imposes work requirements for individuals receiving federal entitlement programs. Recipients of Medicaid and food stamps with no children would have to work at least 20 hours a week to maintain assistance.
The GOP bill also increases the age limit for work requirements from 49 to 55. CRFB estimates the changes will save taxpayers $100 billion over the next decade.
Also in the bill are an overhaul of the nation’s energy-permitting laws and provisions requiring congressional approval for any new regulations with an economic impact of more than $100 million per year.
Not all of the legislation’s provisions would save taxpayer dollars.
The CRFB estimates that rescinding the $80 billion in new IRS funding would add $100 billion to the deficit over the next decade by “allowing more tax cheating.” Likewise, the budget watchdog estimates the bill’s energy provisions will add $430 million to the deficit over the next decade.
Despite those additions, the CRFB notes that the GOP plan cuts spending sufficiently enough to meet its $4.5 trillion goal upon first look.
“Although the Congressional Budget Office has not yet released a score, our rough calculations also find savings of $4.5 trillion, with about $4 trillion of policy savings and $500 billion of interest savings,” the group wrote in its analysis.
Mr. McCarthy is hoping to pass the debt limit bill before Congress leaves town for recess at the end of April. While most Republicans support the plan, lingering divisions between moderates and conservatives could derail the timeline.
Hard-line Republicans in the House Freedom Caucus are opposed to raising the debt limit at all, saying the focus should be explicitly on cutting spending.
“I don’t want to vote for a debt ceiling increase,” said Rep. Bob Good, Virginia Republican. “I don’t think we ought to be spending at a level where we need to increase the debt ceiling.”
Some conservatives also want to increase the work requirements on entitlement programs to 30 hours a week. That presents a potential problem for moderate Republicans running in districts that Mr. Biden won in 2020.
“It’s tough to stick your neck out on the line for some of the stuff in this plan because it’s only an opening bid in the debt limit negotiations,” said one centrist GOP lawmaker. “Everything that we propose now will get watered down so it can pass the Democratic-controlled Senate eventually.”
More than a dozen GOP lawmakers are on the fence about the bill. Mr. McCarthy can lose only four votes on any legislation before having to rely on Democratic votes for passage.
At the moment, Democrats are ruling out backing anything other than a clean-debt ceiling resolution.
“They’ll either produce the votes and pass a bill out of the House next week, or they won’t,” said House Minority Leader Hakeem Jeffries, New York Democrat. “I’m pretty confident that not a single member of the House Democratic Caucus is going to support their extreme proposal.”
The majority of Democrats remain opposed to any spending cuts in exchange for raising the debt limit, even as some implore Mr. Biden to begin negotiations in earnest with Mr. McCarthy.
“I don’t think there’s any harm in the two of them sitting down to talk,” Rep. Greg Landsman, Ohio Democrat, told Politico. “The idea that we’re even coming this close to a potential default is insane.”
Mr. Biden has refused to entertain negotiations with House Republicans. The White House has said it’s not fair for the House GOP to take the government’s finances hostage since both parties contributed to the nation’s $31 trillion debt.
“MAGA House Republicans are holding the American economy hostage in order to take a hatchet to programs Americans rely on every day to make ends meet,” said White House press secretary Karine Jean-Pierre.
At least one Democratic lawmaker said Mr. Biden’s stance was akin to playing “political games” with the debt limit.
“This signals a deficiency of leadership, and it must change,” said Sen. Joe Manchin III, West Virginia Democrat. “For the sake of the country, I urge President Biden to come to the table, propose a plan for real and substantive spending cuts and deficit reduction, and negotiate now.”
Mr. Manchin added that Mr. Biden’s position “may score political points with the extremes of the Democratic Party,” but would only hurt the American public.
• Haris Alic can be reached at halic@washingtontimes.com.
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