When Congress returns this week, House Republicans will try to reach an agreement on a proposal to raise the federal debt ceiling and cut government spending, after being blocked for months by Democratic President Joe Biden’s insistence that they do so without restrictions.
House Speaker Kevin McCarthy will spell out the criteria Republicans want Democrats to agree to in exchange for action on the debt ceiling in a speech at the New York Stock Exchange on Monday.
He has offered few specific details ahead of the talk, but Republicans have proposed holding annual spending growth to 1% for a decade, reducing regulation and boosting energy production.
Members of McCarthy’s sometimes-fractious caucus, who hold a narrow 222-213 majority, have yet to agree on actual legislation. Any proposal Republicans introduce would need to be negotiated with Biden’s Democrats, who control the Senate, before it could become law.
The White House, which is leading the Democrats’ approach to the debt ceiling, has dismissed the Republican proposals as unrealistic.
Nonpartisan forecasters have warned the federal government could face a historic default this summer if Congress fails to act. A default could cripple the U.S. and world economies and force a downgrade of the U.S. credit rating, as occurred in a 2011 standoff over the debt.
But McCarthy’s speech, which Republicans say is intended to draw Wall Street’s support for negotiations on spending, could spark movement after months of inaction. Biden has insisted that Congress pass a “clean” debt hike without conditions, noting that it did so three times under his predecessor, Republican Donald Trump.
“At this point, I think there’s no choice for Republicans and the speaker but to bring forward some type of proposal,” Representative Tom Emmer, the No. 3 House Republican, told Reuters.
The prospective legislation, which conservatives hope to pass by the end of April, could lift the borrowing limit until May 2024, according to a source familiar with the matter. That would set the stage for another debt ceiling debate in the closing months of the 2024 presidential campaign.
But first, Republicans must agree on a proposal that can win the support of at least 218 of their 222 members.
“Getting us all on the same page is a challenge. But it’s not impossible and I’m optimistic that we’ll get there. This is an issue we’ve been talking about for some time,” said Republican Representative Ben Cline.
Cline, a member of the hardline House Freedom Caucus, sits on both the House Budget and Appropriations Committees and is helping to craft a budget plan for the conservative Republican Study Committee, the biggest caucus in Congress.