House Republicans unveiled legislation Wednesday to pair their favored spending cuts and energy and regulatory policies with a debt limit increase lasting through early next year.

In a floor speech shortly before the bill text was released, Speaker Kevin McCarthy said the measure would “responsibly raise the debt limit into next year and provide more than $4.5 trillion in savings to the American taxpayer.” 

The California Republican told reporters before his speech he is planning to bring the bill to the floor next week and is confident it will pass. 

The measure would provide two options for lifting the debt limit — increasing the current $31.4 trillion statutory borrowing limit by $1.5 trillion or suspending it through March 31, 2024 — and specify the limit should be reinstated at whichever threshold is reached first. 

The bill would cap topline fiscal 2024 discretionary spending at $1.47 trillion, which is the fiscal 2022 level, or $131 billion below the comparable level appropriated for the current fiscal year.

There aren’t separate caps for defense and nondefense programs, but it’s commonly understood among Republicans that the cuts will be concentrated among domestic and foreign aid accounts and that defense and veterans programs could see increases.

The measure would also cap spending for the remainder of the decade, allowing for 1 percent annual growth; appropriations wouldn’t return to the $1.6 trillion fiscal 2023 enacted level for a decade under the plan.

After a push from conservatives, the bill would repeal unobligated IRS enforcement funding and a raft of clean energy tax credits from Democrats’ 2022 climate, tax and health law that leadership initially wanted to leave out. 

Repealing the climate credits is estimated to save several hundred billion dollars. McCarthy cited an analysis from Goldman Sachs Group Inc. that said the cost of the credits could be as much as $1.2 trillion. 

McCarthy said clawing back the enforcement funding would save taxpayers $70 billion, but the Congressional Budget Office has estimated that on net it would cost $114 billion over 10 years because anticipated tax receipts lost would be higher than the cost of the enforcement funding. 

On Tuesday, McCarthy told his conference he was concerned about sending the Senate a revenue measure that they could strip and load up with Democratic priorities. But after negotiations with his members he admitted he would likely have to add the tax credits repeal.

Other spending cuts in the bill would come from rescinding roughly $70 billion in unobligated pandemic aid and canceling President Joe Biden’s student loan forgiveness plan, which is expected to save roughly $400 billion over 10 years. 

Work requirements

Republicans would expand existing work requirements for the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families and institute new rules for Medicaid beneficiaries. “Our plan ensures adults without dependents earn a paycheck and learn new skills,” McCarthy said. 

Supporters say the new benefit requirements would help shore up the solvency of Social Security and Medicare by pushing more people into the labor force whose income will be taxed. “We will also protect and preserve Medicare and Social Security because more people will be paying into it,” McCarthy said.

Drafting the work requirement provisions in a way that could unify centrists and conservatives in the conference posed a challenge for GOP leaders.

The bill would tighten existing exemptions in the TANF and SNAP programs, but the new rules wouldn’t take effect until 2025.

Under SNAP, formerly known as food stamps, currently beneficiaries ages 18 to 49 are subject to a requirement that they spend at least 20 hours a week working, looking for a job, in training or similar work-related activities. A Rep. Dusty Johnson, R-S.D.-led bill would subject those up to age 64 to the rule; ultimately, GOP leaders settled on a cap at age 55.

New York GOP Rep. Marc Molinaro said the compromise represents “progress.” But Molinaro, who grew up on food stamps and has been vocal about his support for the program, declined to say whether he would support the bill, noting he’s still reviewing it.

From the opposite perspective, conservative Rep. Tim Burchett, R-Tenn., said the 20 hours per week requirement should be upped to 30 hours. Burchett said he’s still reading the 320-page bill, however, and hadn’t taken a position yet.

Johnson said the measure preserves the “big enchilada” on work rules, which is clamping down on states’ ability to carry over unused exemptions from year to year, and he was confident the work requirement provisions wouldn’t derail the bill.

“I have every confidence Kevin McCarthy is going to get 218 votes by next week,” Johnson said.

The package will also include much of a recently passed House energy bill and a measure to require congressional authorization for major administration regulatory initiatives. McCarthy described the latter as an effort to “prevent Biden’s executive orders to spend money outside the normal process.”

Republicans have not yet secured the 218 votes they’ll need to pass the bill without Democratic support, but leaders are confident they’ll get enough members on board. 

The measure is meant to pressure Biden and congressional Democrats, who have insisted on a clean debt limit measure free of policy conditions, to come to the negotiating table and compromise.

“Now that we’ve introduced a clear plan for a responsible debt limit increase, they have no excuse to refuse to negotiate,” McCarthy said.

McCarthy conveniently planned his speech to overlap with remarks Biden delivered Wednesday afternoon in Maryland. 

Biden blasted McCarthy’s proposed spending cuts, saying they would hit the working class the hardest, and said Republicans should not threaten a debt limit breach if they don’t get what they want.

“Folks, that’s the MAGA economic agenda: spending cuts for working- and middle-class folks, Americans, and tax cuts for those at the top of the pile,” he said. “It’s not about fiscal discipline, it’s about cutting benefits for folks they don’t seem to care much about.”

The president also reiterated his long-standing call for Republicans to release their budget to better detail what spending programs they intend to cut, “what tax giveaways [they] plan to extend to the super wealthy, what it means for the deficit.”

Problem Solvers plan

Earlier Wednesday, the bipartisan House Problem Solvers Caucus released its own debt limit framework. The group’s plan is designed to show a middle ground between Democrats’ preference for a clean bill and Republicans’ desire for deep spending cuts that could pass through both chambers and become law. They say it’s just a backup plan, in case Biden and congressional leaders can’t reach agreement on their own. 

The four-part Problem Solvers proposal, endorsed by a supermajority of the group’s 64 members, calls for suspending the debt limit initially through the end of this year to allow lawmakers time to complete the fiscal 2024 budget and appropriations process. 

In the interim, the proposal calls for creating an external fiscal commission, modeled after the base realignment and closure, or BRAC, commission lawmakers set up to evaluate military bases. The fiscal commission would be charged with recommending measures to stabilize long-term deficits and debt by the end of 2024, and Congress provided it with expedited authority to act on the recommendations by Feb. 28, 2025.

Under the plan, if Congress both sets up the fiscal commission and adopts controls to reduce the deficit through the fiscal 2024 budget and appropriations process, then the temporary debt limit suspension would automatically convert to a debt limit increase, “the amount of which will be guided by the established interim deficit stabilization controls.”

The Problem Solvers do not specify what controls they are seeking but said the amount should be enough to increase the debt limit through February 2025, to align with implementation of the fiscal commission’s recommendations. 

Problem Solvers Caucus co-chair Brian Fitzpatrick, R-Pa., said his group’s framework is much more likely to become law than the GOP bill, which he hadn’t yet reviewed in detail to determine whether he would support it. 

He said he’s more comfortable with the GOP bill including elements he might not otherwise support because it isn’t a final product. “This should be viewed as an initial volley and a conversation starter,” Fitzpatrick said.

The Problem Solvers presented their framework to centrist senators on Wednesday morning, Fitzpatrick said.  

Sen. Susan Collins, R-Maine, said she participated in a Zoom call on the proposal but she hasn’t reviewed the plan in detail enough yet to take a position on it. 

“But I’m glad they’re working on it,” she said. 

Collins added now that House Republicans have laid out their plan, Biden “has run out of excuses” for not negotiating. 

Sen. Joe Manchin III, D-W.Va., who has been more open than other Democrats to a bipartisan solution, was spotted leaving McCarthy’s office Wednesday afternoon. He declined to say whether he was talking to the speaker about the debt limit. 

“I was just passing through,” Manchin said.

Aidan Quigley and Laura Weiss contributed to this report.