SCOTT DETRAW, HOST:

Today in Washington, back and forth with large global financial stakes. Republicans in the House of Representatives have said they won’t vote to raise the debt limit without corresponding cuts, and now they’ve finally put forward their plan. It includes significant spending cuts and policy changes. And House Speaker Kevin McCarthy argues that the time has come to address the country’s growing financial problem.

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KEVIN McCARTHY: If Washington wants to spend more, it will have to unite, find savings elsewhere, like any family in America.

DETROW: President Biden and other Democrats are already saying these ideas don’t work. Deirdre Walsh of NPR joins us with the latest on this high-stakes battle. hey deirdre

DAIRDRE WALSH, SIGNED Hi Scott.

DETROW: So what’s in McCarthy’s proposal?

WALSH: There are many provisions, but the key one to avoid a default this summer is that the bill would increase the country’s lending power by $1.5 trillion or until next March, whichever comes first. It is worth noting that 2024 will be the middle of the election year. The Republican bill in the House of Representatives would return federal spending levels to two years ago and limit future spending growth to 1% per year. House Republicans also want to return federal COVID money that was not spent and cancel President Biden’s student loan write-off program, which is now tied to litigation. Another thing he’ll do is repeal key parts of the Inflation Reduction Act. This is a bill signed by President Biden that funds energy and climate change programs. Instead, Republicans in the House of Representatives are introducing provisions that would expedite the issuance of permits for new energy projects. The bill also reinstates some work requirements for adults without dependents who receive federal assistance for things like food stamps.

DETROW: So President Biden also gave a speech around the same time as McCarthy. What did he say?

WALSH: Well, he was speaking from a union hall in Maryland, and he actually countered his message with McCarthy’s visit to Wall Street on Monday to discuss the matter. The president argued that the threat of default was hurting the economy and said both sides had contributed to $31 trillion in current debt.

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PRESIDENT JOE BIDEN: A debt that has taken 230 years to accumulate in total – in total – if we don’t do what they say. They say they will default if I don’t go along with all these stupid ideas they have.

WALSH: The President said he was open to talking about economic growth, but he insisted that a default should not be discussed.

DETROW: The eternal question about things like this, what’s next?

WALSH: Right. McCarthy plans to vote on his bill next week. He told me as he left the room after his speech that he was sure his members would support him to pass it. But the law could face some defections within the House Republican Conference. As you know, Scott, the speaker can only afford to lose a handful of votes. McCarthy has been involved in debt ceiling battles in the past, but most Republicans in the House of Representatives have not been involved in the latest major debt ceiling battle, which effectively led to a downgrade of the country’s credit rating. Democrats, as we said earlier, have embraced the idea immediately, and they’re talking about the impact of spending cuts on a number of these federal programs.

But McCarthy’s real purpose in making this proposal is to show that Republicans in the House of Representatives have their own agenda. He wants to get President Biden to the negotiating table. The two have not met to discuss the debt ceiling in detail since Feb. 1. And Treasury Secretary Janet Yellen said the country will run out of money this summer to pay its bills. So we don’t really have much time to come up with a proposal that can be approved by both the House of Representatives and the Senate and signed by the President.

DETROW: This is Deirdre Walsh from NPR. Thanks Deirdre.

WALSH: Thank you, Scott.

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