President Joe Biden is already set to veto a bill favored by House Speaker Kevin McCarthy (R-Calif.) to pair spending cuts with an increase to the federal debt limit.
Last week, House Republicans released their plan for a debt limit increase—the Limit, Save, Grow Act of 2023. The Republican bill allows the United States to add up to $1.5 trillion in additional debt until March 31, 2024. In exchange, Republicans say the legislation would provide more than $4.5 trillion in savings to American taxpayers.
On Tuesday the White House Office of Management and Budget (OMB) released a Statement of Administrative Policy, rejecting the legislation and vowing a veto from the president’s office if the bill passes in both the Republican-majority House and the Democrat-majority Senate. The Biden administration has repeatedly insisted on a “clean” debt limit increase, refusing any proposals to cut spending or reform government programs even as the United States has racked up approximately $30.5 trillion in debt.
The OMB statement compared the debt negotiations to a hostage situation, saying, “The President has been clear that he will not accept such attempts at hostage-taking.”
“House Republicans must take default off the table and address the debt limit without demands and conditions, just as the Congress did three times during the prior Administration,” the statement added.
The Republican proposal would achieve much of its spending reductions by cutting funding from Biden’s budget priorities. The bill would specifically set annual discretionary spending at Fiscal Year 2022 levels and would regulate discretionary spending growth to 1 percent annually over the next decade. The bill would also rescind any unspent pandemic-era relief funds, and prohibit executive actions Biden has taken to cancel student loans.
Clean energy tax credit expansions in the Biden-backed 2022 Inflation Reduction Act (IRA) would also go away. The Republican bill would also rescind funding increases for the Internal Revenue Service (IRS).
The OMB said the Republican debt proposal would require “hard-working Americans, the middle-class, seniors, children, and people with disabilities to shoulder the burden of devastating cuts, while doing nothing to ensure that wealthy or large corporations pay their fair share.”
By Ryan Morgan
