Speaker of the House Kevin McCarthy (C) walks inside the US Capitol, April 19 2023. House Republicans released a bill named the Limit, Save, Grow Act that outlines Republican plans to manage the US debt ceiling. Image: WILL OLIVER/EPA-EFE/Shutterstock
By: FEDweek StaffUpdated: Republicans have moved through the House a bill to raise the federal debt ceiling while squeezing “discretionary” budgets for federal agencies that pay for day-to-day operations including salaries for employees, limits that would tighten even further in future years.
The bill passed on virtually a party-line vote, with four Republicans joining all Democrats in voting against it. It stands virtually no chance of passage in the Democratic-led Senate and President Biden has said he would veto the bill if it did pass there.
That leaves uncertain the path forward regarding the debt ceiling, which could be reached as soon as late June once the money freed up by financial maneuvers taken early this year runs out. Biden has said he is open to discussions on the budget but has insisted that the ceiling should be raised with no strings attached.
Even so, the measure represents the first written proposal from the House GOP leadership regarding the federal budget in general and their starting position for any negotiations. It also provides a blueprint for their positions ahead of the need to renew agency spending authority for the fiscal year starting in October.
While the bill would raise the debt limit until potentially early 2024, it also would cap discretionary spending for fiscal 2024 at fiscal 2022 levels, which the White House says would result in a 22 percent cut at agencies other than the Defense Department, since that department’s budget would not be subject to the cap. Overall spending could then increase by only 1 percent per year through 2033 — potentially putting an even heavier burden on non-defense agencies, assuming that the DoD budget would grow more than 1 percent per year.
Exactly how agencies would manage to stay within those limits is not defined in the bill, however. For example, in response to Democrats on the House Appropriations Committee who asked about the potential impact:
* The VA said that a 22 percent cut would result in the reduction of more than 80,000 jobs in its health care branch that would undermine health care for veterans, along with a loss of some 6,000 jobs in its benefits branch resulting in longer waiting time for benefits decisions, among other impacts.
* Law enforcement components of the Justice Department said they would have to freeze hiring and impose furloughs, while the FBI further said it would have to cut its workforce by 29 percent and the U.S. Attorneys’ Offices would have to cut 20 percent of employees.
* The SSA said that even just returning to its 2022 spending level, it would have to impose a hiring freeze, furlough employees for four weeks, eliminate overtime, close field offices and lay off a tenth of its workforce — while a cut below that level “would be catastrophic for the agency and for the people depending on Social Security programs supporting their daily needs.”
The bill does specify certain spending cuts, including heading off or revoking many Biden administration initiatives. The latter includes the authority enacted last year to boost the IRS budget by $80 billion over 10 years above baseline spending assumptions. The House GOP earlier passed a separate bill to do that, despite the CBO’s projection that it would actually increase future deficits through weakened enforcement of tax laws.
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