WASHINGTON (Reuters) – U.S. House of Representatives Speaker Kevin McCarthy unveiled a bill on Wednesday that would pair $4.5 trillion in spending cuts with a $1.5 trillion increase in the federal debt limit, laying out an opening position in what is likely to be a tense partisan debate over government borrowing.
Here is a summary of his plan:
DEBT-CEILING INCREASE
McCarthy’s bill would suspend the nation’s borrowing limit, currently $31.4 trillion, through March 31, 2024 or until it increases by another $1.5 trillion — whichever comes first. At that point, Congress would have to address the issue again, as the 2024 presidential campaign heats up.
SPENDING RESTRAINTS
The plan would dial back the amount of spending that Congress approves annually to the $1.47 trillion approved in the fiscal year ended Sept. 30 and cap growth to 1% annually over the next 10 years. Those caps would effectively serve as spending cuts, as they would not keep up with projected inflation and population growth.
Within that figure, lawmakers would still have to sort out how much to devote to the Pentagon and how much to domestic agencies like the Environmental Protection Agency, a perennial partisan flashpoint.
Congress agreed to similar spending caps in 2011 during another debt-ceiling standoff, though it often did not adhere to them in the following years.
The caps would not apply to benefit programs like Social Security and Medicare, which are projected to grow dramatically as the population ages.
CLAW BACK UNSPENT COVID-19 FUNDS
The plan would cancel the remaining pots of money from the $5.2 trillion Congress approved between 2020 and 2022 to fight COVID-19. According to the White House, the remaining money amounted to less than $80 billion in January and is likely lower now.
Most of that money is earmarked for troubled union pension funds, veterans’ health care and medical research.
CANCEL STUDENT DEBT RELIEF
It would cancel Democratic President Joe Biden’s effort to cancel roughly $400 billion in student debt, which Republicans have portrayed as unfair to those who did not go to college or already paid off their debts. The Supreme Court is expected to rule before July whether that plan is legal.
IRS BUDGET
The plan targets an $80 billion investment plan for the Internal Revenue Service, which the tax-collecting agency will use to hire more employees and deploy new technology. The nonpartisan Congressional Budget Office projects the new funding will generate about $204 billion through increased enforcement.
REPEAL GREEN TAX INCENTIVES
It would repeal incentives for renewable energy, electric vehicles and other climate-friendly technology that Democrats passed last year as part of the Inflation Reduction Act.
TIGHTEN WORK REQUIREMENTS
The plan would stiffen work requirements for participants in the SNAP program which provides grocery money for low-income people.
INCREASED AUTHORITY OVER REGULATIONS
It would give Congress greater power to review new rules put forward by the executive branch, potentially giving Republicans more power to block environmental, workplace and other regulations that they see as harmful.
MORE INCENTIVES FOR OIL AND GAS
McCarthy’s package includes a sweeping fossil-fuel bill that passed the Republican-controlled House in March but has stalled in the Democratic-controlled Senate.
The bill aims to bolster oil and gas production by reducing relations, promoting energy development on federal lands and eliminating Democratic-backed climate incentives.
(Reporting by Andy Sullivan; Editing by Alistair Bell)
