Republicans reportedly want to ban student loan forgiveness and make it harder to get food stamps in a debt ceiling deal — and they seem to want to do it all over again next year
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- Republicans are finally reportedly ready to share their debt ceiling demands as a package.
- Those demands will reportedly include banning student loan forgiveness, among other big cuts.
- Their package would only raise the debt ceiling for a year, setting up another fight in the middle of the next election.
After months of back and forth as the country slowly teeters toward a potentially catastrophic debt ceiling crisis, Republicans are reportedly finally ready to start making a deal.
According to Punchbowl News, House Republican leaders are gearing up to present their ideas to the rest of the party as recess comes to a close. Per the report, the lawmakers are starting to to put together a debt ceiling package that would raise the limit until May 2024, and they're aiming to limit budget growth to 1% annually over the next decade by banning student-loan forgiveness, placing work requirements on welfare programs, and rescinding unspent COVID-19 funds, among other things.
These cuts are not entirely new ideas. The GOP House Budget Committee floated blocking student-loan forgiveness, rescinding unspent pandemic funds, and placing work requirements on welfare programs like SNAP in a February memo outlining areas in which they would support cutting spending for a debt ceiling deal.
If a deal to raise the limit through May 2024 goes through, it would bring another debt ceiling fight just before the presidential election — adding another level of chaos to that cycle.
With Congress returning from recess next week, formal details of a debt ceiling plan are expected after months of stalemate and Republican calls for President Joe Biden to sit down with Speaker of the House Kevin McCarthy and negotiate a deal.
The US is potentially mere months away from breaching the debt ceiling, meaning it'll be unable to pay for the spending that Congress has already authorized. The nonpartisan Congressional Budget Office estimates that a breach might come as soon as July; in the meantime, Republicans have been preparing emergency measures to pay off high priority debts — what Treasury Secretary Janet Yellen said would still be "effectively a default."
Speaker of the House Kevin McCarthy has said that defaulting on the debt "is not an option," but neither is "a future of higher taxes, higher interest rates and an economy that doesn't work for working Americans." But the White House continues to insist on a clean raise, with no cuts or deals attached, which leaves them far from Republicans. Congress passed a clean debt ceiling raise three times under former President Donald Trump.
And it looks like lawmakers on both sides of the aisle are getting antsy to reach a deal. Republican Study Committee Chairman Kevin Hern sent a letter to the committee's members on Wednesday urging them to pass a "strong" debt limit deal in April.
"We must work night and day to get it passed to show the American people we can be trusted and force the Senate and White House to answer for their dereliction of duty," Hern wrote.
As Democrats have repeatedly stressed, the consequences of defaulting on the nation's debt would have major financial consequences. Moody's Analytics projected that even a short default could lead to 1 million Americans losing their jobs, and a mild recession. A report from the Joint Economic Committee found that a default could cost Americans $20,000 in retirement savings, private student-loan payments would surge, and a monthly mortgage payment could increase $150 a month. With Republicans' reported package only covering the debt limit until May 2024, the same concerns could be on the table yet again in a year.
Still, Biden has been adamant that he will not meet with McCarthy over raising the debt ceiling. That's a problem for McCarthy, who told Bloomberg TV last week that "the president never wants to meet."
"I'm very concerned about the debt ceiling," he said. "I want to make sure we don't have conflict."
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