Republicans pass bill to increase debt limit, curb government spending
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McCarthy's proposal included raising the US debt limit by $1.5 trillion to avert a default in the world's biggest economy.
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US House Republican Leader Kevin McCarthy in the House Chamber at the US Capitol Building on January 07, 2023 in Washington, DC, US. (AFP)
A Republican bill to increase the debt limit and cut down on government spending was passed on Wednesday after a narrow 217-215 vote in the US House of Representatives - a major win for Republican House Speaker Kevin McCarthy.
McCarthy's proposal included raising the US debt limit by $1.5 trillion to avert a default of the world's biggest economy.
McCarthy took to Twitter to break the news: "House Republicans just passed the only plan in Washington that 1. Lifts the debt ceiling 2. Stops wasteful spending and inflation 3. Puts America back on track. Now Democrats should do their job,"
🚨 BREAKING 🚨 House Republicans just passed the only plan in Washington that
— Kevin McCarthy (@SpeakerMcCarthy) April 26, 2023
1. Lifts the debt ceiling
2. Stops wasteful spending and inflation
3. Puts America back on track
Now Democrats should do their job.
Tune in for my press conference soon https://t.co/vmn31INPH5
Read next: US Republican debt ceiling plan would slow growth: Moody's
Treasury Secretary Janet Yellen has been urging Congress to either suspend or raise the debt limit for the same reason as McCarthy, adding that her agency has started discussing "extraordinary measures" to avoid a default, which the US has never done since the debt ceiling has been raised 22 times between the years 1997 and 2022.​​​​​​​
Yellen warned on Tuesday that a US default on its debt would set off an "economic and financial catastrophe," stressing that Congress must not wait until the last minute to make a decision on the matter.
In a statement, White House Press Secretary Karine Jean-Pierre said that the proposed bill would cut "veterans’ healthcare, education, Meals on Wheels and public safety, takes away healthcare from millions of Americans and sends manufacturing jobs overseas.”
Jean-Pierre asserted that "President Biden will never force middle-class and working families to bear the burden of tax cuts for the wealthiest, as this bill does. The President has made clear this bill has no chance of becoming law,"
She urged: "Congressional Republicans must act immediately and without conditions to avoid default and ensure that the full faith and credit of the United States is not put at risk."
In January, after the US maxed out its borrowing limit at $31.46 trillion, the US Treasury announced launching "extraordinary measures" to prevent defaulting on debt. Yellen then decided that the Treasury would temporarily suspend payments that aren't urgent and divert the money for more pressing needs i.e. services needed to keep the government operating.
The Congressional Budget Office (CBO) warned in February that the government could exhaust its funds by July - the final date to decide on the matter - leading to a default on American debt unless Congress raised the debt ceiling.
