(Bloomberg) — House Republicans are considering a proposal that would kick the market-rattling debate over the U.S. debt limit to 2024 — placing it right in the middle of a presidential election year.
GOP lawmakers are readying legislation they could unveil next week that would suspend the debt ceiling until May 2024, a person familiar with the matter said. Extraordinary accounting measures deployed by the Treasury Department could push the final deadline until after the November 2024 election, Bipartisan Policy Center expert Bill Hoagland said.
But the GOP plan would make the debt ceiling debate part of the campaign. Treasury has used these extraordinary measures to stave off a default since the debt limit was technically reached in January. Speaker Kevin McCarthy is set to address the New York Stock Exchange on Monday. A person familiar says his speech will hit on the debt limit fight.
The bill the GOP is preparing would be a party wish-list of spending cuts and regulations changes with little chance of being enacted, but could form the basis of separate, future budget talks and end the debt limit standoff that threatens a US payments default this summer. President Joe Biden has called for an unconditional increase of the $31.4 trillion US debt limit, but has said he would discuss a separate budget agreement with Speaker Kevin McCarthy.
"If today's reports are true, Speaker McCarthy is adopting the extreme MAGA House Republican position: threatening our economic recovery, hardworking Americans' retirement, and catastrophic default in order to force devastating cuts to veterans health care, education, and other programs that lower costs for working families," Andrew Bates, deputy White House press secretary, said in a statement.
Before the current two-week House recess, McCarthy told reporters that his party was "close" to finalizing a debt ceiling bill that could pass if Biden continues to refuse to negotiate on the issue. He said that the bill would be based on four topics he had outlined to Biden in a letter: discretionary spending cuts to fiscal 2022 levels, tougher work requirements for some anti-poverty programs, clawing back unspent Covid-19 funds and easing energy permits.
The proposal is separate from a more far-reaching GOP non-binding budget proposal that the party intends to use to demonstrate that the U.S. federal budget could be balanced in 10 years. The timing of the bill being shared with rank-and-file lawmakers next week was first reported by Punchbowl News.
Among the proposals being considered is cutting domestic annual appropriations by $130 billion and then capping the growth of appropriations at 1% per year for a decade, GOP lawmakers have said. The GOP is also eyeing savings achieved by blocking Biden's proposed student loan forgiveness program, lawmakers have said. A proposal to impose new work requirements on those between 50 and 65 years old, as well as those with school-aged children, appears to be losing favor for the bill, according to a senior House GOP aide.
McCarthy is coming under increased pressure from his party members to put up a debt proposal, given the summer deadline and realization that it could take months to agree on a GOP budget outline given party divisions over levels of cuts to popular programs. On Wednesday, Oklahoma Representative Kevin Hern, the leader of the large Republican Study Committee caucus, publicly demanded that the House vote on a debt bill by the end of April.
The conservative group FreedomWorks said it supports the latest effort."We are encouraged by the progress House Republicans are making to find a compromise in the debt-ceiling debate," said Adam Brandon, FreedomWorks President. "House Republicans' common-sense approach would help ease the burden placed on hardworking American families and help return fiscal responsibility to our nation's capital."
