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What’s in the GOP bill to lift debt limit, cut spending

WASHINGTON (AP) — House Republicans are trying to exact a price from Democrats for agreeing to increase the nation’s borrowing authority and prevent the government from defaulting on the obligations it has accrued over decades. They’re arguing for their priorities and going after President Joe Biden’s in a separate bill.

The legislation in question has virtually no chance of becoming law. But Republicans hope passage will force Biden to the negotiating table, where they could seek concessions in return for lifting the nation’s borrowing authority and ensuring that the U.S. Treasury can fully pay its bills.

A look at key aspects of the legislation, which the House is expected to pass this week:


The bill would set federal discretionary spending at $1.47 trillion during the next fiscal year and allow it to increase only 1% annually from there, far below the rate of inflation in most years.

The cap on spending is the big-ticket item in the bill, accounting for about two-thirds of the $4.8 trillion in deficit reduction that the Congressional Budget Office says would occur over 10 years if the bill is enacted.

Discretionary spending includes things like weapons programs, servicemember pay, grants for schools that serve large shares of low-income students, rental assistance to house millions of poor and disabled, and money to fund research on cancer and other life-threatening diseases. It’s the spending that Congress approves through appropriations bills.

The House GOP bill doesn’t affect spending on Social Security and Medicare. Such spending, referred to as mandatory, accounts for about two-thirds of all federal spending.


The bill would rescind all unobligated COVID relief money from six bills enacted from 2020-2022. The changes would reduce spending by about $30 billion over the next decade, according to the CBO. That’s less than 1% of the total cost of the six bills.


House Republicans began their tenure in the majority by passing a bill that would rescind nearly $71 billion that Congress is providing the IRS to upgrade its technology and boost hiring. They have included the same proposal in their debt limit bill.

Democrats approved the higher IRS funding on top of what Congress normally provides the agency annually through the appropriations process. The boost immediately became a magnet for GOP campaign ads in the fall claiming it would lead to an army of IRS agents harassing Americans.

The CBO has said that rescinding the IRS money actually would increase deficits by more about $120 billion over the coming decade due to the impact on the agency’s work. But McCarthy said the step is needed to “protect families and businesses from a weaponized IRS.”


The Republican bill would repeal actions taken by President Biden to waive $10,000 to $20,000 in debt for nearly all borrowers who took out student loans. The bill would also prohibit the administration’s efforts to cut monthly payments in half for undergraduate loans. The CBO projects that the student loan changes House Republicans seek would save about $460 billion over 10 years.

Republicans argue that Biden is unfairly transferring the obligations of people who incurred student loan debts onto millions of American taxpayers who did not go to college or who already paid off their student loans. And the say the policy will do nothing to curb the soaring tuition rates at colleges and universities.

Biden has said the student loan forgiveness would give millions of younger Americans a little breathing room financially. It would improve their ability to plow their resources into a house, car or just basic essentials, which helps power the economy. Nearly 90% of the debt cancellation would go to borrowers who earn less than $75,000.


Republicans are seeking to repeal most of the tax breaks that Democrats passed in party-line votes last year as they sought to boost the production and consumption of clean energy.

McCarthy argues that the tax breaks “distort the market and waste taxpayer money.” The White House says the tax credits are leading to hundreds of billions of dollars in private-sector investments, creating thousands of manufacturing jobs in the U.S.

Citing estimates from the Joint Committee on Taxation, the CBO projected that repealing the clean energy tax breaks would reduce federal deficits by about $570 billion over 10 years. But that estimate was made before GOP leaders agreed to retain tax breaks for biofuels in a bid to win over Republicans from Iowa and other Midwestern states where the production of alternative fuels such as ethanol play a major role in the rural economy.


One of the key elements of the GOP bill is expanded work requirements for recipients of federal cash and food assistance.

Under current law, able-bodied adults under 50 and without dependents risk losing their food stamp, or SNAP benefits, if they don’t spend 20 hours a week in work-related activities. The bill would apply the requirement to those ages 50-55.

In addition, the bill would apply work requirements to able-bodied adults without dependents in Medicaid, the federal-state program that provides health insurance coverage for low-income Americans. Job training and performing community service count toward fulfilling the work requirement.

McCarthy said changes would help those affected learn new job skills and earn a paycheck while helping to fill some of the millions of job openings throughout the country. The White House said millions of people, many already working, would lose their health insurance coverage.

A Congressional Budget Office review last year of work requirements for Medicaid recipients said Arkansas was the only state where a work requirement was imposed for more than a few months. It found many of the targeted adults lost their health insurance and employment did not appear to increase. It said that while evidence was scant, research indicated that many were unaware of the work requirement or found it too onerous to demonstrate compliance.

The CBO estimates that about 15 million people could be subject to the new Medicaid work requirements each year, although many would qualify for an exemption. About 1.5 million, on average, would lose federal funding for their Medicaid coverage, and of that group, about 600,000 would become uninsured.


The debt limit package includes legislation the House passed earlier this year that aims to increase domestic production of oil, natural gas and coal, and to ease permitting restrictions that delay pipelines, refineries and other projects.

Known as HR 1 to signify its importance to House Republicans, the energy bill also seeks to boost production of critical minerals such as lithium, nickel and cobalt that are used in electric vehicles, computers, cellphones and other products. Biden has described the House GOP’s legislation as a “thinly veiled license to pollute.”


The Republican would suspend the debt limit through March 31, or by $1.5 trillion, whichever comes first. That would tee up another debt ceiling fight for early next year, just months before the November election when control of the White House and Congress will be decided.