Republicans’ Debt Ceiling Bill Clears the House

House Republicans, in a partisan vote of 217 to 215 on Wednesday, approved what amounts to their opening bid in the high-stakes upcoming budget negotiations with Senate Democrats and President Joe Biden. Republicans want to reduce federal spending in return for agreeing to raise the nation’s debt limit and avoid a default.

But to get more conservatives to support what House Speaker Kevin McCarthy is calling the Limit, Save and Grow Act, he agreed to include several cuts to the Biden administration’s signature climate legislation, the Inflation Reduction Act.

Among McCarthy’s proposals is one that would claw back $3 billion in funding to reconnect disadvantaged communities split apart by highways. The Transportation Department has not yet sent out the Neighborhood Access and Equity Grants to state and local governments, but expects to release the rules for applying for the grants in the coming months, a spokesman said.

The Republican proposal also seeks to reduce $5 billion—allocated under the Infrastructure Investment and Jobs Act—to help state and local governments reduce greenhouse gas air pollution. Of that money, $250 million would go to at least one entity in each state to come up with a plan for reducing greenhouse gas. All 50 states have reported to the Environmental Protection Agency that they plan to apply for the grants, which are expected to be sent out this summer. The other $4.75 trillion targeted by Republicans is money that was slated to carry out those plans.

In addition, the measure includes toughening work requirements for Medicaid and food stamp recipients. It would raise the work requirement age from 49 to 55 and would begin next year (an earlier version of the measure had the requirements going into effect in 2025).

The U.S. Department of Health and Human Services, in an analysis, estimated that the change could put 21 million people at risk of losing Medicaid coverage. The department released data showing how many low-income people could lose coverage in each county. 

The Center on Budget and Policy Priorities, a left-of-center think tank, estimated that requiring older people to meet the work requirements would put 900,000 of them at risk of no longer being able to receive food stamps. The proposal would still allow states to waive up to 12% of able-bodied people from the requirement to work in order to receive Supplemental Nutrition Assistance Program benefits for more than three months. However, it would no longer let them continue to grant the waivers for more than a year.

Republicans object to how much spending for the two programs has grown and believe that those who are able-bodied should be required to work. The work requirements, Rep. Jason Smith, a Missouri Republican, said on the floor, would push more people to find the “dignity of work.”

Not all Republicans supported the measure, though. Rep. Tim Burchett, the former mayor of Knox County, Tennessee, was among four Republicans who voted against it, saying it didn’t cut spending enough. Burchett said he will not vote to raise the debt ceiling without deeper cuts. “I’m from a very conservative area of the country that wants to restore fiscal responsibility,” he told reporters.

"I did not seek out all that federal money because there's always strings attached to it," he told Route Fifty.

Reflecting the strong Democratic opposition to the proposal, Rep. Jim McGovern of Massachusetts said on the House floor that the cuts were added to win over those on the right who thought the Republican proposal “didn’t screw people fast enough.”

Democratic Senate Majority Leader Chuck Schumer of New York declared the Republican proposal “dead on arrival” at a press conference on Wednesday. He reiterated that the Senate will vote on a “clean bill” that would raise the debt ceiling without “hostage-taking and brinkmanship.”

Republican Senate Minority Leader Mitch McConnell of Kentucky, however, said that for a budget to pass Biden and McCarthy will have to reach a bipartisan agreement. McConnell noted that a budget plan would need some Republican support to reach the 60-vote threshold to pass the Senate.

On the House floor, Rep. Tom Cole, an Oklahoma Republican, acknowledged that Democrats are unlikely to go along with all that Republicans want. However, he said, Republicans are pushing to find agreement during the upcoming negotiations to prioritize spending in a “reasonable and responsible way.”

“Let's sit down and talk things through,” he said. “This is our opening position.”

Clarence Anthony, CEO and executive director of the National League of Cities, said in an interview that his organization is “very concerned” about proposals to claw back climate and energy funds. “The [Inflation Reduction Act] is critical to our nation’s transition to a clean energy economy,” he said, “as it provides funding and incentives to support local climate action.”

NLC has also urged Congress, in recent days, to not risk a default by tying a deal to budget cuts. Financial experts and local leaders, like Clearfield City, Utah, Mayor Mark Shepherd, worry that among other things, a default on the nation’s debt would stall local projects by discouraging investors from buying municipal bonds.

The U.S. Conference of Mayors blasted the bill. “The House’s proposal would be devastating for the people who live in American cities. It would wipe out the enormous progress we made to rebound from the pandemic,” said Tom Cochran, the group’s CEO and executive director. “It’s time to end this charade and pass a debt limit bill that does not threaten our entire economy.”

The vote was the opening salvo in a high stakes game of chicken as the nation faces defaulting on its loans as early as June—unless Republicans agree to raise the debt limit or Democrats agree to steep spending cuts.

Democrats on the House Committee on Appropriations said during a conference call with reporters Tuesday night that in order for Republicans to reach their stated goal of reducing spending to what it was two years ago, spending for federal agencies would need to be reduced by nearly a fourth. That could result in a range of “devastating” cuts, said Rep. Rosa McAuliffe, the top Democrat on the committee. 

“The default bill takes food off of people's plates, … it denies them health care, and it takes away their homes,” she said.

Rep. Mike Quigley, an Illinois Democrat, estimated that the scale of the proposed cuts could lead to 640,000 families losing rental assistance and 430,000 low-income families “being evicted” from Section 8 housing. 

Quigley also said that proposed cuts to the Federal Aviation Administration could lead to a reduction of air traffic towers in a third of the airports in the nation and result in more flight delays. He further warned that the cuts would reduce safety inspections for railroads in the wake of the derailment in Palestine, Ohio. The Transportation Department estimates that 30,000 fewer miles of tracks would be inspected a year under the GOP proposal.