The US House of Representatives has passed a bill that would raise the debt ceiling by $31.4 trillion, in exchange for slashing government spending, including programs championed by Democratic President Joe Biden. The bill now heads to the Democrat-controlled Senate, where it stands little chance of passing.
The White House has called on House Speaker Kevin McCarthy to instead raise the ceiling "without conditions", while Democrats have largely defended spending on social programs and called for tax increases for the wealthy.
Treasury estimates show that Congress has raised, extended or revised the debt limit in 78 separate instances, including 49 times under Republican presidents and 29 times under Democrats.
House Republicans narrowly passed a bill that would raise the government's legal debt ceiling by $1.5tn in exchange for steep spending restrictions – a tactical victory for House Speaker Kevin McCarthy as he challenges Joe Biden to negotiate and prevent a catastrophic federal default this summer.
President Biden has so far refused to negotiate over the debt ceiling which the White House insists must be lifted with no strings attached to ensure America pays its bills. The House Republican majority hopes to maneuver Biden into a corner with its plan to roll back federal spending to fiscal 2022 levels and cap future spending increases at 1% over the next decade, among other changes.
Democrats derided the Republican plan as a "ransom note" and an "unserious bill" courting financial danger. Representative Steny Hoyer (D-MD) stated: “This is not about responsible budgeting; it’s about playing political games.”
In response, Kevin McCarthy argued that raising taxes on wealthier Americans was not an appropriate solution given current economic circumstances: "We should focus on growing our economy rather than increasing taxes during these challenging times."
As both parties remain entrenched in their positions regarding how best to address the debt ceiling, it remains to be seen whether a compromise can be reached before potential financial consequences come into play.