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Speaker McCarthy announces Limit., Save, Grow Act on Capitol Hill

Source: Kent Nishimura / Getty

U.S. House Speaker Kevin McCarthy on Wednesday unveiled Republicans’ plan to raise the debt limit by $1.5 trillion and cut government spending before the United States defaults on its debt this summer.

The 320-page limit, Save, Grow Act would increase the debt limit by $1.5 trillion through March of 2024. It also would free up $4.5 trillion in savings by reversing discretionary spending for non-defense programs to fiscal year 2022 levels, while limiting programs to 1 percent growth annually.

President Joe Biden and the Democratic-controlled Senate are likely to reject the proposals, but McCarthy said they would serve as the basis for negotiations between the two parties over raising the federal government’s $31.4 trillion debt limit in the coming weeks. Failure to raise the debt ceiling would lead to default that would shake U.S. and world economies.

McCarthy’s plan would also repeal green-energy incentives signed into law by Biden last year, boost domestic oil and gas production and scrap his $400 billion student-loan forgiveness effort.

“President Biden has a choice: Come to the table and stop playing partisan political games, or cover his ears, refuse to negotiate and risk bumbling his way into the first default in our nation’s history,” McCarthy said on the House Floor.

It was unclear whether McCarthy’s plan would unite House Republicans. A sizeable contingent of hardline members have dismissed the risks of failure to act, while others might balk at its limits on military spending.