McCarthy unveils debt ceiling bill that targets Biden agenda

WASHINGTON — House Speaker Kevin McCarthy, R-Calif., on Wednesday released his plan to raise the debt ceiling by $1.5 trillion for about a year while attempting to repeal major components of President Joe Biden’s agenda.

McCarthy said the bill, called the Limit, Save, Grow Act of 2023, would save American taxpayers more than $4.5 trillion by limiting discretionary spending, retrieving unspent pandemic-related funds, eliminating Biden’s student loan forgiveness plan and cutting funds earmarked for the Internal Revenue Service.

The cuts would be in exchange for a one-year debt ceiling increase. McCarthy called on Biden and Senate Majority Leader Chuck Schumer, D-N.Y., to “sit down, negotiate and address this crisis” but he did not mention whether the bill has enough support to pass. Biden has refused to negotiate over the debt limit. Extraordinary measures to avoid the first-ever U.S. sovereign debt default are on track to run out this summer.

“Now that we’ve introduced a clear plan for a responsible debt limit increase, they have no more excuse and refuse to negotiate,” McCarthy said.

McCarthy did not say when he would bring the bill to a vote in the House. It still wasn’t clear whether he had support within his own caucus to pass the bill. “I never give up, we’ll get them,” he told NBC News on Wednesday.

Even if the House GOP passes it, the Democratic-controlled Senate would likely kill the measure.

McCarthy’s announcement comes after days of speculation about the GOP proposal to temporarily raise the debt limit for certain cutbacks, such as a stall on non-defense discretionary spending.

The House speaker also doubled down on proposals for stricter work requirements for adults without dependents, the repeal of “Biden’s army of 87,000 IRS agents” and the president’s student loan forgiveness program, which could be killed by the Supreme Court. Justices are expected to rule on the student loan program by early summer.

McCarthy also argued the measures will protect Social Security and Medicare by driving more people into the workforce to pay for it. Yet Democrats say it will hurt millions.

“Speaker McCarthy’s proposal is not about jobs,” Rep. Frank Pallone, D-N.J., ranking member of the House Energy and Commerce Committee, said after McCarthy’s announcement. “It is a Trojan Horse intended to use red tape and onerous paperwork to kick millions of people off their health insurance because Republicans do not believe in our nation’s social safety net. Republicans are creating a debt crisis to justify these cruel plans.”

Republicans’ narrow majority in the House means McCarthy can only afford to lose a handful of GOP votes given Democrats’ opposition.

“Let me be clear, this proposal is dead on arrival,” Pallone said on Wednesday.

The White House has maintained it will not negotiate on the debt ceiling and that Congress should pass a clean increase and address any budgetary concerns separately. White House press secretary Karine Jean-Pierre on Wednesday said the administration was aware of McCarthy’s plans to release a proposal but condemned it as playing politics around something that is Congress’s “duty.”

Biden also took on McCarthy’s strategy Wednesday. “MAGA Republicans in Congress are threatening to default on the national debt, the debt that took 230 years to accumulate overall, unless we do what they say,” the president said in a speech in Maryland.

–CNBC’s Emma Kinery contributed to this report.