What to Know in Washington: McCarthy Tweaks Debt Limit Measure

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Speaker Kevin McCarthy (R-Calif.) decided overnight to make changes to his debt limit bill, bowing to the demands of a small number of Republican lawmakers who had threatened to tank the measure when it comes up for a House floor vote this week.

The move came just hours after McCarthy declared to reporters he was not entertaining any changes to the measure, which would raise the debt limit by $1.5 trillion.

The House Rules Committee amended the bill to restore three tax breaks for biofuels and for two others allows them to be claimed for investments made between August 2022 and April 19, 2023, a key demand of six or more Midwestern lawmakers who had declared opposition to the measure.

Alex Wong/Getty Images
Speaker Kevin McCarthy (R-Calif.) at the Capitol on Tuesday.

In order to balance the loss of savings from the new compromise, the bill makes certain cancellations of unspent Covid-19 funding permanent.

The amendment also accelerates new work requirements in Medicaid so that they take effect in 2024 rather than 2025, a key demand of Rep. Matt Gaetz (R-Fla.) and other conservatives who had threatened to vote “no.” The amendment also contains language clarifying that one of the goals of the food stamps program is to increase work by participants.

While House leaders had hoped to vote on the bill today, it does not appear on the day’s calendar, making a Thursday vote more likely. It is not yet clear if McCarthy has the votes for the bill even with the changes. Some lawmakers like Reps. Nancy Mace (R-S.C.), Andy Biggs (R-Ariz.), and Tim Burchett (R-Tenn.) had been opposed because the level of cuts was too small.

Overall, the bill aims to trim $4.8 trillion in spending over a decade in part by cutting discretionary spending by $130 billion next year and capping its growth at 1%. The bill, a grab bag of conservative measures, would ease energy regulations, end clean-energy tax breaks, rescind unspent Covid-19 funds and impose new work requirements on adults without children who receive Medicaid and food stamps.

McCarthy has said he hopes passage of the bill will pressure President Joe Biden into talks over raising the debt ceiling as a possible payment default looms as soon as June without congressional agreement to raise it. Read more from Eric Wasson.

More on the Debt Limit

GOP Debt Bill Would Cut US Deficit by About $4.8 Trillion: CBO

The Congressional Budget Office says it estimates the House Republicans’ debt limit bill would result in $4.8 trillion in deficit reduction over the 2023-2033 period.

Biden Must Join McCarthy at ‘Grown Ups Table,’ McConnell Says

Senate Republican leader Mitch McConnell (R-Ky.) calls on Biden to start talks on the debt-limit with Speaker McCarthy.

Cruz Says ‘Under No Circumstances’ Should US Default on Debt

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Business Groups Offer Muted Response to GOP’s Debt Ceiling Bill

The nation’s top business groups are taking a wait-and-see public response to House Republicans’ effort this week to move a debt ceiling increase that’s tied to spending cuts.

Biden To Meet With South Korean President


  • Biden will hold a bilateral meeting with South Korean President Yoon Suk Yeol before 11 a.m. Yoon and Biden hold a joint press conference at 12:30 p.m. Biden and the First Lady Jill Biden host Yoon for a state dinner at 8:30 p.m

The US will strengthen the deterrence it provides South Korea against nuclear threats, securing a pledge from Seoul to honor commitments to not pursue its own atomic arsenal. Biden and South Korean President Yoon Suk Yeol will announce the agreement when they meet Wednesday at the White House, according to senior American administration officials who spoke on condition of anonymity.

The security package comes after months of North Korean ballistic missile launches laced with threats of further nuclear tests. The US has flown bombers and deployed submarines in a show of force against North Korea and to soothe anxiety in South Korea over aggression by the regime of Kim Jong Un. Read more


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  • The Supreme Court responded to mounting ethics controversies with a three-page statement signed by all nine justices vowing to follow “foundational ethics principles and practices,” but suggesting they see no need for a formal code of conduct. Read more

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To contact the reporter on this story: Kayla Sharpe at ksharpe@bloombergindustry.com

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