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House Speaker McCarthy outlines plan to lift the nation's credit limit for a year

LEILA FADEL, HOST:

A top priority for Congress is tackling a looming deadline on the debt ceiling.

A MARTÍNEZ, HOST:

House Speaker Kevin McCarthy addressed the issue yesterday during a speech at the New York Stock Exchange.

(SOUNDBITE OF ARCHIVED RECORDING)

KEVIN MCCARTHY: Debt limit negotiations are an opportunity to examine our nation's finances.

MARTÍNEZ: But actual negotiations between McCarthy and the White House remain stalled.

FADEL: Here to talk us through this is NPR congressional reporter Barbara Sprunt. Hi, Barbara.

BARBARA SPRUNT, BYLINE: Hi. Good morning.

FADEL: Good morning. So for starters, give us some context to the debt limit itself and how we got here.

SPRUNT: So zooming way out, the debt limit isn't about future spending. It's about meeting the cost of existing commitments the federal government has made. And it's something that can feel a bit like Groundhog Day because when the debt ceiling is approached, Congress has to address it in some way. And that's what's happening now. In January, the U.S. hit its debt limit. The Treasury Department employed what it calls extraordinary measures to essentially act as a Band-Aid for a couple of months. But that will run out in early summer. If Congress fails to raise the debt limit before then, it could lead to an unprecedented debt default.

FADEL: So a lot at stake here. McCarthy talked about this during his speech. And he called the debt a, quote, "ticking time bomb." What's his plan?

SPRUNT: Well, McCarthy said the House will vote in the coming weeks on a bill that would reduce federal spending levels to those in 2022, limit the growth of spending over the next 10 years to 1% annually and raise the debt limit into 2024, which I should point out could cause lawmakers to have to negotiate this whole thing again smack dab in the middle of the presidential primary season. McCarthy said House Republicans would also add work requirements for adults without dependents who are enrolled in various federal assistance programs, like food stamps. McCarthy was very careful to add that the bill wouldn't touch Social Security and Medicare, two programs that are very popular.

This speech comes as negotiations between the speaker and the president have stalled. The pair met in February. And McCarthy laid the blame for the impasse at Biden's feet. Biden has remained adamant that he wants to sign a clean debt ceiling bill, so one that's completely separate from any legislation on spending cuts. But it's worth noting that McCarthy is marking his first hundred days as speaker. And if we cast back to earlier this year, you'll remember there was a very long series of votes to secure enough support for him to become speaker. And one of the demands from lawmakers who initially withheld their support was that the House not vote on a standalone measure to lift the debt limit.

FADEL: Yeah. So McCarthy's walking a fine line with various GOP factions here, right?

SPRUNT: Well, it seems like something that could prove to be difficult for McCarthy. His slim majority means he can afford to lose only a handful of Republicans. And even if the bill were passed, it would still be dead on arrival in the Democratic-controlled Senate. But the thinking is if it can pass the House, it might bring Biden back to the negotiating table.

FADEL: OK. So this is troubling, the two parties basically nowhere on what to do about the debt limit. What are Democrats saying?

SPRUNT: Well, Senate Majority Leader Chuck Schumer has repeatedly said that Republicans should work alongside Democrats to avert this crisis, which he points out they did under the Trump administration.

(SOUNDBITE OF ARCHIVED RECORDING)

CHUCK SCHUMER: The discussion about cuts belongs in the discussion about budget, not as a precondition for avoiding default.

SPRUNT: After McCarthy's speech, White House spokesperson Andrew Bates said in a statement that the speaker didn't clearly outline an exact proposal, and said McCarthy is holding the economy hostage.

FADEL: NPR congressional reporter Barbara Sprunt. Barbara, thanks.

SPRUNT: Thank you. Transcript provided by NPR, Copyright NPR.

Leila Fadel is a national correspondent for NPR based in Los Angeles, covering issues of culture, diversity, and race.
Barbara Sprunt is a producer on NPR's Washington desk, where she reports and produces breaking news and feature political content. She formerly produced the NPR Politics Podcast and got her start in radio at as an intern on NPR's Weekend All Things Considered and Tell Me More with Michel Martin. She is an alumnus of the Paul Miller Reporting Fellowship at the National Press Foundation. She is a graduate of American University in Washington, D.C., and a Pennsylvania native.