McCarthy makes case for pairing spending cuts with debt ceiling fix in NYSE address
Emily Jacobs
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House Speaker Kevin McCarthy (R-CA) called on President Joe Biden and congressional Democrats to negotiate federal spending cuts in exchange for a debt ceiling increase in an economic address Monday at the New York Stock Exchange.
McCarthy used his address to dispute Democratic assertions that House Republicans are imperiling the economy by placing conditions on their support for raising the debt ceiling. Allies of the House speaker had likened this speech to the address then-President Ronald Reagan delivered before the NYSE in 1985, where he warned against debt ceiling politicking while laying out a vision for growing the economy.
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While noting that “defaulting on our debt is not an option,” McCarthy told the Wall Street crowd that “reckless government spending” was causing “hardships” that also required immediate action. The House speaker proposed a one-year debt limit extension in exchange for Biden and Democratic leadership having a “reasonable negotiation” on spending cuts.
The debt ceiling, or the top amount the federal government can borrow, will either need to be raised or abolished sometime this summer in order to avert a debt default. Economists have long warned that such a default would wreak havoc on the economy. Biden has not budged in three months on his refusal to negotiate over the debt limit, and White House officials have criticized McCarthy and House Republicans for demanding spending negotiations be tied to the debt ceiling increase.
“Debt limit negotiations are an opportunity to examine our nation’s finances. Now, in the past 35 years, there have been eight major deficit reduction laws enacted by Congress,” McCarthy said, defending his party’s demands. “Every single one of them was attached to legislation that raised the debt limit and every one of them was bipartisan. Why? Because the problem gets solved only when both parties come together.”
The White House has accused McCarthy of failing to provide detailed budget cut requests, which he pushed back on by proposing a 1% cap on spending growth, returning the federal government to 2022 levels, and suggesting work requirements for federal food assistance programs. He also said the proposal would “claw back tens of billions of dollars in COVID-related money.” McCarthy has vowed that cuts to Medicare and Social Security would be off the table, something he reiterated Monday.
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“Right now, there are more job openings than people looking for jobs, in part because the Biden administration weakened work requirements,” McCarthy said while defending the work requirements change, going on to add that the GOP “proposal will examine wasteful Washington spending and executive overreach in all forms.”
“Mr. President, with all due respect, enough is enough. This is not how the leader of the free world should act,” he added while pushing back on White House assertions that he was putting the health of the U.S. economy at risk. “Your partisan political games are provoking the very crisis you claim you want to avoid: greater dependency on China, increasing inflation, and threatening Medicare and Social Security.”