House Speaker Rep. Kevin McCarthy, R-Calif., is followed by members of the media as he walks in the U.S. Capitol on April 26.

House Speaker Rep. Kevin McCarthy, R-Calif., is followed by members of the media as he walks in the U.S. Capitol on April 26. Tasos Katopodis/Getty Images

House GOP Passes Debt Ceiling Bill That Puts Tens of Thousands of Federal Jobs At Risk

Biden vows to veto the measure that would avoid a default but is coupled with steep spending cuts.

The House on Wednesday passed a measure to avoid a debt default that would have catastrophic impacts on government operations and the U.S. economy, pairing the move with dramatic cuts to spending at non-defense federal agencies that will make the bill unpalatable to Democrats and the White House. 

The 2023 Limit, Save and Grow Act would slash discretionary spending at domestic agencies to its fiscal 2022 levels, leading to significant reductions of more than 20% in fiscal 2024. It would also cap annual spending growth to just 1% for the next decade. The bill would increase the debt ceiling by $1.5 trillion or suspend it until March 31, 2024 if the government did not hit the new limit by that time. 

The measure passed in a party-line vote after Republican leadership struggled to minimize its defections since it released the bill text last week. In the end, just four Republicans opposed it and the legislation passed in a narrow 217-215 vote. While the bill is not expected to get approval in the Senate and President Biden said he would veto it, its passage marks an attempt to ramp up pressure on the White House to commence negotiations over what the administration will concede to avoid a debt default this summer. To date, Biden and congressional Democrats have refused to negotiate and demanded a “clean” debt limit increase without conditions. 

“We want to get this done as soon as possible, but more importantly, we want President Biden to finally start getting engaged in this process,” House Majority Leader Steve Scalise, R-La., said on Wednesday. “This is not a job where you run and hide when the going gets tough.” 

The two sides remain at a standstill and have not met since Feb. 1, with the White House saying it would only negotiate over spending levels if those conversations were not tied to the debt ceiling.

In announcing its veto threat, the White House said the bill was “a reckless attempt to extract extreme concessions” from the president, but Biden would not “accept such attempts at hostage taking.” It added the bill would impose severe cuts to “education, food safety inspections, rail safety, healthy meals for seniors, research on cancer and other diseases, border security, public safety and veterans’ medical care.” Republicans have vowed to exempt spending at the departments of Defense and Veterans Affairs from the reductions, though Democrats have highlighted that the bill text itself does not provide such protections for VA. 

The measure would also avoid changes to Social Security and Medicare. The bill does include new work requirements for certain individuals receiving federal assistance. The impact of those changes was sped up late Tuesday and early Wednesday morning as leadership negotiated with conservative lawmakers who had threatened to withhold their support for the bill. The legislation would claw back unspent COVID-19 relief money and require Congress to affirmatively sign off on major rules from federal agencies. 

Last week, House Speaker Kevin McCarthy, R-Calif., said his party’s plan would “prune” the “bloated, overgrown bureaucracy.” According to the Biden administration, the legislation would accomplish just that. 

In response to inquiries from congressional Democrats, agency officials have suggested the cuts included in the Limit, Save and Grow Act would force layoffs, furloughs, hiring freezes or other means to trim workforce costs. Customs and Border Protection said, for example, it would be forced to shed 2,400 front-line agents and officers, while the Justice Department said the FBI would lose 11,000 agents. Agencies said tens of thousands of additional jobs would be lost or at risk, including 2,300 at the Food and Drug Administration, 9,400 at the Federal Aviation Administration and 3,200 at the Federal Emergency Management Agency. 

The Republican bill would also claw back much of the $80 billion the Internal Revenue Service is set to receive over the next decade as part of the Inflation Reduction Act, funding that is expected to help IRS hire tens of thousands of new employees. 

Tony Reardon, president of the National Treasury Employees Union, accused Republicans of intentionally trying to sabotage federal agencies. 

“Deep, arbitrary across-the-board spending cuts are from an old, failed playbook: Weaken federal agencies then feign outrage when the hollowed-out agencies cannot meet their missions of serving Americans,” Reardon said. “You can’t inspect more drug manufacturing facilities with fewer FDA inspectors. You can’t screen more international cargo for illicit drugs with fewer CBP officers. You can’t process more tax returns and send out refunds quickly with fewer IRS employees.” 

Rep. Jody Arrington, R-Texas, who chairs the House Budget Committee and introduced the debt ceiling bill, framed the measure as a normal course correction after some anomalous years, saying the bill would “rightsize the bureaucracy coming out of COVID.” 

Senate Majority Leader Chuck Schumer, D-N.Y., said on his chamber’s floor Tuesday the bill was “dead on arrival.” He added the bill represented an "extremist, hard-right agenda" and that Democrats would not allow it to ever become law. 

“The speaker should drop the brinkmanship, drop the hostage taking, come to the table with Democrats [and] pass a clean bill to avoid default,” Schumer said. “Given where the Republican proposal is, that's the only way to go. Time is running out.” 

While economists and lawmakers have speculated about a range of outcomes if an unprecedented default were to occur, most have agreed the most likely scenario would require the Treasury Department to delay all government payments until it had enough money available to meet the demands of a given day. That would require federal employees to either face furloughs or work with only the promise of back pay once the situation was resolved. Agency payments to beneficiaries, states, grantees, contractors and, potentially, their own employees, would be disrupted.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.