President Joe Biden will have cut spending over 10 years by an amount equal to any requested increase in the debt ceiling if a Republican proposal becomes law.
Announcement of the bill came on the same day Senate Democrats chided Republicans for their unwillingness to provide details of the spending cuts they insist must be made in exchange for an increase to the nation’s debt ceiling, which will be breached no later than September.
The Dollar-for-Dollar Deficit Reduction Act (pdf), introduced by Rep. Randy Feenstra (R-Iowa) on March 1, would require the president to submit proposed spending cuts along with any formal request for Congress to raise the debt ceiling.
The bill would also require the Secretary of the Treasury to inform the House Ways and Means Committee and the Senate Finance Committee 60 days in advance of an expected breach of the debt ceiling along with the date when extraordinary measures might be needed to avoid doing so.
Sen. John Barrasso (R-Wyo.) is expected to introduce similar legislation in the Senate next week.
“I came to Congress to end wasteful spending and restore fiscal responsibility because the consequences of inaction are too severe,” Feenstra said.
“This is a common-sense solution that will protect the full faith and credit of the United States and strengthen our economy in the process.”
In cases where the debt limit is temporarily suspended, the spending reductions would have to at least equal the estimated debt increase during the period of suspension, as determined by the Congressional Budget Office (CBO).
Feenstra’s proposal comes amid negotiations between Biden and House Speaker Kevin McCarthy (R-Calif.) on increasing the $31.4 trillion debt ceiling. The limit would have been exceeded on Jan. 19 if not for “extraordinary measures” taken by U.S. Treasury Secretary Janet Yellen.
Biden has stated that he wants a “clean” increase to the debt ceiling, unencumbered by future spending cuts.
McCarthy has insisted he will not raise the ceiling without some agreement on spending cuts, but has declined to give specifics.
So far Republicans have said only that they will set the 2024 budget at 2022 levels, in part by eliminating wasteful spending, and that they will protect defense spending and not touch Medicare or Social Security.
Meanwhile, Democrats have ridiculed Republicans for their reticence to give specifics.
On Feb. 15, Senate Democrats issued a report titled “House Republican Radical Cuts Will Hurt Americans, Make Our Country Less Safe,” (pdf). In a couple of press conferences, Democrat senators detailed the spending cuts they say would be needed to achieve the Republicans’ goal.
“When you add up the cuts they want to make, they’re so extreme that they don’t want to show them to you,” Sen. Sheldon Whitehouse (D-R.I.) said on Feb. 15. “So they use non-arithmetic terms like ‘2022 levels.’”
“If Republicans do as many promise and protect defense spending, again a non-arithmetic term, the cuts elsewhere could surge as high as 30 percent. So they won’t tell you that. The arithmetic is devastating for them.”
Senate Majority Leader Chuck Schumer (D-N.Y.) claimed the Republican spending objectives would result in the loss of 21,000 law enforcement officers, deny 1 million babies access to formula, and cut $582 million from the opioid epidemic fund, among other things.
“This is not some abstract exercise. This is real pain,” he said.
The Republican budget director is expected to model his budget on one created by President Donald Trump’s former budget director Russ Vought, Whitehouse said on March 2.
The draft uses the word “woke” 77 times, according to Whitehouse, which he said is a tactic to distract the public from the true effect of Republican spending plans.
“The woke screen is a smoke screen,” Whitehouse said.
The United States will again approach the debt ceiling sometime between July and September, the CBO estimated. By then, the extraordinary measures available to the Treasury will have been exhausted.
At that point, the government will have no choice but to delay paying some of the nation’s bills, unless the debt ceiling is raised.
Biden and McCarthy met on Feb. 1 for an initial discussion on raising the debt ceiling.
“I thought it was a very good discussion,” McCarthy told reporters shortly after the one-hour conversation. “We walked out saying we will continue that discussion. And I think there is an opportunity to come to an agreement, and I think that’s the best thing.”
At the National Prayer Breakfast the following day, Biden said, “Let’s just sort of, kind of, join hands again a little bit. Let’s start treating each other with respect.”
“That’s what Kevin and I are going to do. Not a joke. We had a good meeting yesterday. I think we’ve got to do it across the board. It doesn’t mean we’re going to agree and [not] fight like hell. But let’s treat each other with respect.”
Despite their disagreement over future spending, both leaders have stated that they will not allow the United States to default on its current financial obligations.