White House: Biden Would Veto House Republicans’ Debt Ceiling Bill

On Tuesday, the White House said it “strongly opposes” the House GOP bill that would increase the debt ceiling into 2024 but cut federal spending and warned that President Joe Biden would veto the proposal if it makes it to his desk. 

The White House’s Office of Management and Budget (OMB) called the lengthy legislation, which is known as the Limit, Save, Grow Act of 2023, a “reckless attempt to extract extreme concessions as a condition for the United States simply paying the bills it has already incurred.”

“Altogether, this legislation would not only risk default, recession, widespread job loss, and years of higher of higher interest rates, but also make devastating cuts to programs that hard-working Americans and the middle-class count on,” said OMB in a statement of administration policy.

The White House budget office said the House Republican’s plan “stands in stark contrast to the president’s vision for the economy” and his 2024 fiscal year budget proposal sent to Congress last month.

“Therefore, if the president were presented with the Limit, Save, Grow Act of 2023, he would veto it,” read the statement. 

GOP House members could vote this week on the legislation that pairs $4.5 trillion in spending cuts with an increase in the debt ceiling through March 2024. 

The proposal was unveiled by Speaker of the House Kevin McCarthy last week and represented the GOP’s opening bid to Biden in negotiations over dealing with the debt limit. 

Republicans insist any plan to suspend or raise the debt limit must be combined with cuts to federal spending. However, Biden and the Democrats say they will only accept legislation that addresses the debt limit with no attached conditions. 

The differing positions have left McCarthy and the president at an impasse as the threat of default continues to grow. 

The United States hit its borrowing limit of almost $31.4 trillion in mid-January, which forced the Treasury to use “extraordinary measures” to avoid a debt default. 

The Congressional Budget Office estimates that the extraordinary measures could be exhausted as early as June unless legislators take action to avoid what would be a historic default and would have a catastrophic effect on the U.S. economy.

GOP plan would raise debt limit, freeze spending levels

The Republican plan would increase the debt limit by $1.5 trillion through March 2024, whichever occurs first. It also puts a freeze on spending levels adopted in the 2022 fiscal year and caps any future federal spending increases at 1% per year over the next decade.

The legislation would claw back any unspent Covid-19 federal funds and rescind some of the $80 billion approved for the Internal Revenue Service (IRS) through the Inflation Reduction Act. It would additionally impose stricter work requirements on recipients of Medicaid and food stamps.

The GOP legislation also targets Biden’s key policies, including revoking his plans to forgive as much as $20,000 in student loan debt for up to 40 million Americans, along with the Democrats’ tax, climate, and health care bill and climate provisions.

The slim majority for Republicans in the House complicates the proposal’s passage. Speaker McCarthy can only afford four defections from his GOP colleagues for the debt limit bill to pass the lower chamber. However, the legislation is considered dead on arrival in the Senate, where Democrats hold a 51-seat majority and 60 votes are required for measures to advance. 

As Republican lawmakers argue their plan attacks out-of-control federal spending, the White House warned it would hurt middle-class Americans while risking the default on the nation’s debt.