House Republicans have proposed a $1.5 trillion debt limit hike as a part of their “Limit, Save, Grow Act.” The bill seeks to cut domestic programs, such as student loan forgiveness and green energy tax credits, and introduce new work requirements for the Medicaid program, while sparing the Pentagon’s budget. It also gives Congress the power to halt regulations from the executive branch and calls for the rescinding of Covid-19 pandemic related funding. Though the bill would save $4.5 trillion, it has yet to be officially estimated.

The proposal is cause for a test of Speaker McCarthy’s young speakership as the White House has pushed for raising the borrowing limit without any precondition, which the House GOP has rejected. By pushing the bill in the House, McCarthy hopes to force Biden to negotiate a package resulting in spending cuts before a default occurs this summer.

The bill has faced some criticism from lawmakers who worry about the risk of a year-long debt limit hike, and the possibility of it reigniting a major fiscal battle during a presidential election year. Despite this, the proposal stands strong amongst House Republicans and could prove an effective tool for Speaker McCarthy.



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