SCOTT DETROW, HOST:
A back and forth in Washington today with major global financial stakes. House Republicans have said they will not vote to raise the debt limit without corresponding cuts, and now they've finally put forward their plan. It includes major spending cuts and policy changes. And House Speaker Kevin McCarthy argues it's time to fix the country's growing fiscal problem.
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KEVIN MCCARTHY: If Washington wants to spend more, it will have to come together, find savings elsewhere, just like every single household in America.
DETROW: President Biden and other Democrats are already saying these ideas are non-starters. NPR's Deirdre Walsh joins us now with the latest on this high stakes fight. Hey, Deirdre.
DEIRDRE WALSH, BYLINE: Hey, Scott.
DETROW: So what is in McCarthy's proposal?
WALSH: There are a lot of provisions, but the key one to avoid a default later this summer - the bill would increase the country's borrowing authority by $1.5 trillion or through March of next year, whichever comes first. It's worth noting that 2024 - that would be the middle of an election year. The House Republican bill would roll back federal spending levels to those from two years ago and limit the growth of spending going forward to 1% annually. House Republicans also want to claw back federal COVID money that hasn't been spent and roll back the student loan forgiveness program that President Biden put into place that's tied up in legal fights right now. The other thing it would do is repeal key parts of the Inflation Reduction Act. That's President Biden's signature legislative bill that funded energy and climate change programs. Instead, House Republicans are adding provisions that would speed permitting of new energy projects. The bill also restores some work requirements for adults without dependents who receive federal assistance for things like food stamps.
DETROW: So President Biden also gave a speech right around the same time as McCarthy. What did he say?
WALSH: Well, he spoke from a union hall in Maryland, and he really contrasted his message with McCarthy's visit up to Wall Street on Monday to talk about this issue. The president argued that the threat of default hurts the economy, and he said both parties contributed to the current $31 trillion in debt.
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PRESIDENT JOE BIDEN: The debt that took 230 years to accumulate overall - overall - unless we do what they say. They say they're going to default unless I agree to all these wacko notions they have.
WALSH: The president said he's open to a conversation about growing the economy, but insists default has to be off the table.
DETROW: So perpetual question on stuff like this, what happens next?
WALSH: Right. McCarthy is planning for a House vote on his bill next week. He told me, leaving the House floor after his speech, he was confident he has the support from his members to pass it. But the legislation could face some defections from inside the House Republican Conference. As you know, Scott, the speaker can only afford to lose a handful of votes. McCarthy's been around for fights over the debt ceiling in the past, but the majority of House Republicans didn't serve in Congress for the last major fight over the debt ceiling that actually resulted in a downgrade of the country's credit rating. Democrats, as we talked about earlier, immediately pan the idea, and they're talking about the impact of rolling back spending levels for a bunch of these federal programs.
But McCarthy's real goal with putting this proposal forward is to show that House Republicans have their own plan. He wants to force President Biden to come to the negotiating table. The two have not met to talk about the debt ceiling in length since February 1. And Treasury Secretary Janet Yellen has said the country is going to run out of money to pay its bills sometime this summer. So there's really not a lot of time to hammer out a proposal that can clear both the House and the Senate and get signed by the president.
DETROW: That's NPR's Deirdre Walsh. Thanks, Deirdre.
WALSH: Thanks, Scott. Transcript provided by NPR, Copyright NPR.
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