Debt ceiling negotiations continue ahead of June 1 default date
President Biden and House Republicans have not yet reached an agreement on legislation to increase the debt ceiling. Biden held negotiations with congressional leaders this week but press reports indicate that he and House Speaker Kevin McCarthy (R-CA) remain at an impasse. The President and congressional Democrats continue to advocate for a bill that only increases the debt ceiling. House Republicans and a handful of Senate Republicans have said that any debt ceiling increase must be combined with a set of annual spending cuts or some form of budget control.
The debt limit is a ceiling imposed by Congress on the amount of debt that the U.S. government can have outstanding. The U.S. officially hit its debt limit in January, and a default date could come as soon as June 1, according to Treasury Secretary Janet Yellen. If Congress does not raise the debt limit, the federal government cannot increase the amount of outstanding debt, in turn causing the treasury to only draw from cash on hand and spend only its incoming revenues.
On April 26, House Republicans passed the Limit, Save, Grow Act of 2023. This partisan legislation would raise the debt ceiling by $1.5 trillion or through March 2024, whichever occurs first. It would also limit U.S. budget growth to 1% annually for the next decade, cap FY24 discretionary spending at $1.47 trillion ($131 billion below FY23 levels), and rescind the Biden administration’s student loan forgiveness and loan repayment plan proposals.
Following the House vote on the debt ceiling package, House Appropriations Chairwoman Kay Granger (R-TX) released a formal statement saying, “The Limit, Save, Grow Act is key in our efforts to address the debt ceiling and, most importantly, get our fiscal house in order. Using this framework, we will begin marking up our bills for Fiscal Year 2024.”
The Office of Federal Affairs continues to closely monitor the debt-ceiling debate and will provide updates.