Congress

House to vote on debt limit plan as country's first default looms

House Speaker Kevin McCarthy wants to raise the nation's borrowing limit by $1.5 trillion, and he pairs it with $4.5 trillion in spending cuts.

House to vote on debt limit plan as country's first default looms
J. Scott Applewhite / AP

House Speaker Kevin McCarthy may not have the votes within the Republican Party to advance his debt ceiling package, and he wants to have a vote as soon as Wednesday.

A lack of support would prove politically devastating for the newly elected speaker and risks diminishing his leverage in negotiating with President Joe Biden. 

McCarthy unveiled the proposal during a high-profile speech at the New York Stock Exchange last week. 

"The House will vote on a bill to lift the debt ceiling into the next year, save taxpayers trillions of dollars, make us less dependent upon China, curve our high inflation — all without touching Social Security and Medicare," Speaker McCarthy said.

McCarthy wants to raise the nation's borrowing limit by $1.5 trillion, and he pairs it with $4.5 trillion in spending cuts — cuts that Democrats say are a non-starter.

A photo collage shows money next to the Capitol building.

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Conservatives in the Freedom Caucus argued the plan doesn't make enough cuts to spending, and moderates fear that the proposal would go nowhere with Democrats. Senior Democratic aides say the bill has virtually no chance of passing the Senate. And the White House has said President Biden would veto the bill if it got to his desk. 

"We learned Speaker McCarthy's bill would cut the American economy off at the knees," said White House Press Secretary Karine Jean-Pierre. "In a new analysis, Moody's Analytics finds that the speaker's legislation would increase the odds of a recession, cost 780,000 jobs, weaken the economy and increase the unemployment rate."

It all comes as Washington races toward the brink of defaulting on its debt for the first time in history, which economists warn will happen sometime later this summer.

A default on the nation's $31.4 trillion debt would rattle the global economy at a time of already economic uncertainty. But so far, a breakthrough in negotiations remains elusive.