House passes GOP’s debt limit plan

McCarthy speaks to the media on April 26, after the US House voted and passed a bill raising the nation's debt ceiling.

The clock is ticking faster on the nation’s debt ceiling drama.

House Speaker Kevin McCarthy pushed his package to raise the debt ceiling by $1.5 trillion through the House in a close vote on Wednesday. But the White House continues to say that it will not negotiate on the issue.

The federal government could default as soon as early June.

That wouldn’t give House Republicans and the White House a lot of time to work out a deal to avoid a default, especially since negotiations have been at a standstill for several months.

The US hit its debt ceiling in January, triggering the Treasury Department to start taking extraordinary measures to prevent a default.

Here’s what the debt ceiling is and what defaulting would mean.

What is the debt ceiling? Established by Congress, the debt ceiling is the maximum amount the federal government is able to borrow to finance obligations that lawmakers and presidents have already approved — since the government runs budget deficits and the revenue it collects is not sufficient. Increasing the cap does not authorize new spending commitments.

The debt ceiling, which currently stands at $31.4 trillion, was created more than a century ago and has been modified more than 100 times since World War II.

Though it was originally designed to make it easier for the federal government to borrow, the limit has become a way for Congress to restrict the growth of borrowing — turning it into a political football in recent decades.

What happens if the US does default on its debt? Once the extraordinary measures and cash on hand are exhausted, the debt ceiling crisis would start having very real impacts.

The Treasury Department would likely have to temporarily delay payments or default on some of its commitments, potentially affecting interest and principal payments on US debt, Social Security payments, veterans’ benefits and federal employees’ salaries, among other obligations.

But no one knows exactly how the Treasury would handle the situation since it has never happened.

A default would also wreak havoc on the US economy and the global financial markets, as well as shake confidence in the safety of the Treasury market and raise borrowing costs.

Even the threat of one in 2011 caused the only credit rating downgrade in the nation’s history.

Read more about the debt ceiling here.

The Biden administration reiterated its stance that House Republicans must raise the debt limit without conditions, hours after the House passed a debt limit plan Wednesday in a symbolic win for Republican leadership.

She said the United States has never defaulted on its debt or not paid bills.

“Congressional Republicans must act immediately and without conditions to avoid default and ensure that the full faith and credit of the United States is not put at risk,” the statement said.

The GOP measure is dead on arrival in the Democratic-led Senate but is primarily aimed at boosting Republicans’ efforts to negotiate with Democrats as the country approaches its default deadline as soon as this summer.

Republican Rep. Tim Burchett talks with CNN's Manu Raju on Wednesday, April 26.

Republican Rep. Tim Burchett, one of four members who voted “no” on Speaker Kevin McCarthy’s debt limit package, said that he had made the GOP leadership aware early on that he would not support the bill.

He said he was told about the last-minute changes to the debt bill package Wednesday morning. Burchett said he feels like he should have been notified about any additions at the meeting Tuesday.

“I hated going against my friends. I love Kevin McCarthy. I think he’s a great leader. He’s kept his word, you know, but I didn’t get asked,” he said.

Ken Buck, Andy Biggs and Matt Gaetz were the others that voted against the bill. McCarthy could only afford to lose four votes and prevail on the vote. 

Mitch Landrieu, senior adviser to Biden, appears on CNN on Wednesday, April 26.

President Joe Biden will not negotiate with House Speaker Kevin McCarthy on the debt limit because it would hold the American economy hostage, a senior advisor said Wednesday.

The president was willing to talk to McCarthy about his vision for America, to discuss the budget and spending, Mitch Landrieu told CNN’s Wolf Blitzer.

But he added:

“What the speaker of the House did today, with a very slim majority, is really risky and really terrible,” Landrieu said.

Speaker Kevin McCarthy holds a press conference on Wednesday, April 26.

House Speaker Kevin McCarthy called on the Senate and President Joe Biden to take action of their own after GOP lawmakers in his chamber passed a debt limit measure Wednesday evening.

“The president can no longer put this economy in jeopardy. We lifted the debt limit. We’ve sent it to the Senate. We’ve done our job — the only body in here that has done theirs,” he added.

McCarthy urged Majority Leader Sen. Chuck Schumer to put their own plan on the floor and said that the president could no longer ignore it by not negotiating.

Some context: Biden reiterated Wednesday that he would not meet with McCarthy on extending the debt limit, saying it’s “not negotiable.”

“They haven’t figured out the debt limit yet,” Biden told reporters in the Rose Garden, referring to House Republicans. “I’m happy to meet with McCarthy, but not on whether or not the debt limit gets extended. That’s not negotiable.”

In this screengrab from video, the House passes a bill to raise the debt ceiling.

The House has voted to pass a debt ceiling bill after days of wrangling wayward Republican members from both ends of the conference.

Throughout the day, House Republicans rallied around their proposal to raise the nation’s borrowing limit and slash federal spending after leadership made a flurry of last-minute changes designed to win over key GOP holdouts – a major reversal after leadership insisted they would not alter the bill text.

The final vote was 217-215, with four Republicans – Ken Buck, Andy Biggs, Tim Burchett and Matt Gaetz — voting against the bill. McCarthy could only lose four votes and prevail on the vote. 

The bill is dead on arrival in the Senate, where Senate Majority Leader Chuck Schumer has said on multiple occasions that he will not consider the bill.

What’s in the bill: The package raises the nation’s $31.4 trillion debt limit by an additional $1.5 trillion. But the plan also states that if the new debt limit is not breached by March 31, 2024, then Congress must again increase the borrowing authority by that date, proposing to reignite a major fiscal battle in the middle of a presidential election year.

The “Limit, Save, Grow Act” implements sizable cuts to domestic programs and intends to spare the Pentagon’s budget, returning funding for federal agencies to 2022 levels while aiming to limit the growth in spending to 1% per year. The nonpartisan Congressional Budget Office said that the bill would trim government deficits by $4.8 trillion over 10 years.

The 320-page bill also blocks Biden’s plan to grant student loan forgiveness, repeal green energy tax credits and kill new Internal Revenue Service funding enacted as part of the Inflation Reduction Act.

CNN’s Melanie Zanona, Kristin Wilson, Lauren Fox, Manu Raju and Haley Talbot contributed reporting to this post.

The House is now voting on final passage of the GOP debt limit measure.

Democratic Rep. Raja Krishnamoorthi said that the GOP debt limit bill is “not a serious bill. It’s not a bipartisan bill in any way, shape, or form.”

The lawmaker from Illinois, speaking to CNN’s Wolf Blitzer ahead of the House vote, said that a clean increase should be passed instead.

Rep. Jared Moskowitz reviews notes during a House Oversight Committee hearing on the “border crisis” on Capitol Hill in Washington, DC, in February.

Some Democrats are calling on President Joe Biden to change his tune and agree to negotiate on the debt ceiling.

“Even if those talks are not productive, they’ve got to start finding areas that they might agree on,” he added. “So I’m hoping to see that the Speaker is going to send this bill to the Senate, it’s going to be dead, and then we’re going to have to start over and figure out how we are going to make sure we don’t go off the cliff.”

House Republicans are expected to vote Wednesday evening on their proposal to raise the nation’s borrowing limit and slash federal spending.

Biden has urged the House to pass a clean debt-limit bill, without conditions, to avert a financial crisis. He has so far refused to negotiate with Speaker Kevin McCarthy about the debt limit.

One centrist Democrat, Abigail Spanberger of Virginia, would not say whether the White House should negotiate with McCarthy, but she made clear she was uneasy.

“I think it’s important that we do everything that we can do to avoid defaulting,” she said. “I’ll let the White House speak for the conversations that they’ve had with the Speaker. The gamesmanship, the brinksmanship with the very health and stability and unwillingness to pay our debts, that’s just not what we should be doing.”

Rep. Nancy Mace arrives for a meeting with fellow House Republicans as Speaker of the House Kevin McCarthy continues to push his sweeping debt ceiling package to win over holdouts like Mace, at the Capitol in Washington, DC, on April 26.

One Republican lawmaker who was initially holding out on the GOP bill to raise the debt limit said she changed her vote after House Speaker Kevin McCarthy agreed to work with her on separate legislation to balance the budget.

Rep. Nancy Mace, for days, has said she would likely vote against the budget package because it would rescind green energy tax credits important in her swing South Carolina district. The plan is scheduled to be up for a vote Wednesday evening.

She said she met with McCarthy ahead of the vote. The speaker has been working to lock in enough Republican votes to pass the measure in the House — something that is important to McCarthy when it comes to negotiating with President Joe Biden and other Democrats on the debt limit.

Mace said she would begin drafting that new balanced budget measure Wednesday.

She didn’t say if McCarthy explicitly said it would come to the floor, noting it had to go through the committee process first.

Mace also got some other concessions from the speaker, including a floor vote on a bill “related to women’s access to reproductive health and childcare services” and a floor vote on a bill dealing with active shooter alerts, which hasn’t been drafted yet, according to a source with knowledge of the discussions between Mace and McCarthy.

Senate Majority Leader Chuck Schumer speaks to the press after their weekly luncheons at the US Capitol on April 26 in Washington, DC.

Senate Majority Leader Chuck Schumer maintained Democrats’ position that they will not negotiate over the debt ceiling with House Speaker Kevin McCarthy — despite calls from Sen. Joe Manchin to do so. 

Schumer also briefly defended the Inflation Reduction Act, after Manchin, one of the main authors of the law, threatened to repeal it.

“The bottom line is our caucus is overwhelmingly for the Inflation Reduction Act,” Schumer told reporters.

The vote on the House GOP’s debt limit plan is currently scheduled to occur between 4:45 p.m. and 5 p.m. ET, according to three sources familiar with the timing.

Senate Minority Leader Sen. Mitch McConnell (R-KY) walks through a hallway at the U.S. Capitol on April 25 in Washington, DC. 

Republican leaders in the Senate are urging President Joe Biden to come to the negotiating table on the debt limit, even if House Speaker Kevin McCarthy’s budget package does not pass on Wednesday.

Republican Whip John Thune echoed McConnell, noting that it has been 83 days since the president and speaker met. 

He said he hopes the conversations between the two leaders deal with both solving the issue of the looming debt limit deadline, “but also with spending reforms hopefully that address the fundamental issue of spending and debt.”

Biden said Wednesday that he will not meet with McCarthy about the debt limit, calling the issue “not negotiable.” Biden has urged the House to pass a clean debt-limit bill, without conditions, to avert a financial crisis.

Remember: If House Republicans pass the measure Wednesday, the bill will be dead-on-arrival in the Democratic-led Senate. Passing the budget package is primarily aimed at boosting McCarthy’s negotiating stance with Democrats and was a key part of the GOP leadership’s pitch to skeptical members.

If McCarthy can unite his conference and force a bill through the chamber, it would be a symbolic win for GOP leadership. The country approaches its default deadline as soon as this summer.

CNN’s Melanie Zanona, Kristin Wilson, Lauren Fox, Manu Raju and Haley Talbot contributed reporting to this post.

President Joe Biden speaks during a news conference with South Korea's President Yoon Suk Yeol in the Rose Garden of the White House on Wednesday in Washington, DC.

President Joe Biden reiterated Wednesday that he would not meet with House Speaker Kevin McCarthy on extending the debt limit, saying it’s “not negotiable.”

“They haven’t figured out the debt limit yet,” Biden told reporters in the Rose Garden, referring to House Republicans. 

He continued, “They quote Reagan all the time and they quote Trump, both of which said it’s — I’m paraphrasing — it would be an absolute crime to not extend the debt limit.” 

The president’s comments come as Republican leadership scrambles to get their conference behind a package to raise the national debt limit, with a vote on the bill possibly coming later today. 

Key McCarthy allies said the bill must pass in order to strengthen their argument against the Democrats’ inaction on the issue so far, and put more pressure on Biden.

Rep. Nancy Mace speaks during a committee hearing on Capitol Hill in Washington, DC, on April 19.

GOP Rep. Nancy Mace told CNN that she had a “very productive” conversation with House Speaker Kevin McCarthy and has decided to switch her vote on his debt limit bill from “no” to “yes.”

With the South Carolina lawmaker’s support, House Republican leaders are one step closer to securing passage of their bill. 

Other members who are still undecided or opposed: Reps. Andy Biggs, Tim Burchett, Eli Crane, Victoria Spartz, Matt Gaetz and Ken Buck. 

McCarthy can only lose four votes in the narrowly divided House for the bill to pass.

GOP Rep. Tim Burchett said he is still a no vote on the debt limit plan after leaving a meeting in House Speaker Kevin McCarthy’s office Wednesday afternoon.

The lawmaker from Tennessee said that McCarthy “asked me what I needed. I said, ‘$32 trillion in debt.’” 

Burchett also shrugged off being stood up by McCarthy yesterday. “It doesn’t matter,” he said. “Yeah, it hurt my ego, but that didn’t affect my vote.”

The House could vote on the legislation Wednesday, and House GOP leaders have expressed confidence that it will pass. McCarthy can only lose four votes in the narrowly divided House. 

House Speaker Kevin McCarthy emerges from a closed-door meeting with fellow Republicans as he tries to round up the votes for his sweeping debt ceiling package at the Capitol on Wednesday.

House Speaker Kevin McCarthy will put his control of the thin Republican majority on the line this week with a bid to pass a bill slashing spending that is designed to jam President Joe Biden over the looming government debt crisis.

The standoff is deepening between the Republican speaker and the Democratic president, which could be fateful for the country and both their political careers. And the ability of each side to unify their parties and shape public opinion will be crucial.

McCarthy’s authority: The speaker has been meeting with small groups of lawmakers, seeking to pressure members to fall in line in a quest for 218 votes to pass the bill and create new political heat on Biden.

Leadership insisted it would not change the measure, but then it did just that in an overnight cave that saw two major adjustments designed to piece together a majority to pass it. The move again raised questions about the speaker and his team’s authority and will fuel fears that when the crisis peaks later in the summer, McCarthy will find it impossible to get his conference in line.

McCarthy — who has already had to make huge concessions to his conference’s most extreme members to win his job — has yet to show he can manage his majority in a way that advances GOP goals and avoids harming the national interest.

This is not only potentially ruinous for McCarthy’s hopes for having a profitable speakership. It is a potentially grave situation for the United States since the possible fallout from failing to raise the debt ceiling would have massively damaging consequences. 

What’s on the line for Biden: The president, after making his reelection campaign officialTuesday, has been saying the GOP must not hold the nation hostage to what he says is an extreme agenda. The debt ceiling showdown is important to Biden as he seeks to protect the legislative achievements of his term so far and to portray an image of strength and purpose.

Now officially in the ring for 2024, Biden can hardly afford the political blowback of climbing down to Republicans. And if he caved into Republican efforts to block his already enacted green energy policies, for example, Biden would be effectively cratering his own domestic legacy in a way that could further create doubts among some Democratic voters who are unsure about his candidacy.

Another part of his election pitch is portraying House Republicans as the epitome of the chaos and disruption of ex-President Donald Trump, who leads polls of the GOP primary.

High economic stakes: Unless Congress raises the federal borrowing limit this summer, the government will run out of money, the US will be unable to pay its obligations and the economy could tumble into a recession, causing job losses and possibly halting payment of some benefits. The long-term impact of America’s reputation as a safe financial haven could be eviscerated.

House Speaker Kevin McCarthy walks towards a news conference on Capitol Hill in Washington, DC, on April 20.

House Republicans are using the debt ceiling standoff to advocate for one of their longstanding goals – requiring more low-income Americans to work in order to receive government benefits, particularly food stamps and Medicaid.

They see work requirements as a twofer, allowing them to reduce government spending, while bolstering the nation’s labor force at a time when many businesses are still struggling to staff up.

Still, the controversial policy, included in House Speaker Kevin McCarthy’s package to increase the debt ceiling, is causing some consternation within the Republican conference, with hardliners wanting to include even stricter requirements and with moderate members in swing districts concerned they could face blow back over the issue.

Here’s what is in the plan:

Childless, able-bodied adults ages 18 to 55 could get food stamps for only three months out of every three years unless they are employed at least 20 hours a week or meet other criteria. Currently, that mandate applies to those ages 18 to 49, though it has been suspended during the Covid-19 public health emergency, which expires next month.

Estimates on how many people this would affect vary. In an analysis released Monday, the Congressional Budget Office said that 275,000 folks, on average, would lose benefits each month because they fail to meet the requirement and are not otherwise exempt. Another 19,000 people would receive small benefits because of the new income they earn.

Others project a potentially larger impact. The provision would put about 900,000 folks between the ages of 50 and 55 at risk of losing their food assistance unless they work sufficient hours and record that employment with their state agencies, receive an exemption or live in an area where the mandate is waived, according to the left-leaning Center on Budget and Policy Priorities.

The debt ceiling package would also require certain adult Medicaid recipients to work, perform community service or participate in an employment program for at least 80 hours a month or earn a certain minimum monthly income. It would apply to those ages 19 to 55, but not those who are pregnant, parents of dependent children, physically or mentally unfit for employment or enrolled in education or in substance abuse programs, among others.

This largely targets low-income adults who qualify under Medicaid expansion, an Affordable Care Act provision. Medicaid has never had a work requirement, but the Trump administration granted waivers to several states to impose such a mandate on certain enrollees. Litigation stopped or chilled states’ implementation of the effort, and the Biden administration subsequently withdrew the permissions – though a federal district court judge allowed the initiative to proceed in Georgia.

The provision would result in about 1.5 million adults, on average, losing federal funding for their Medicaid coverage, according to the CBO. But states would pick up the full tab for about 900,000 of them, leaving around 600,000 uninsured.

Plus, the debt ceiling bill would make changes to the work requirement provisions of the Temporary Assistance for Needy Families program, which was created out of the 1996 welfare reform package.

House Speaker Kevin McCarthy is meeting now with conservative holdouts — Rep. Matt Gaetz from Florida, Rep. Tim Burchett from Tennessee and Rep. Ken Buck of Colorado — as leadership prepares to head to the floor for a rule vote at 1:30 p.m. ET.

Yesterday, Burchett was stood up by McCarthy, instead meeting briefly with Rep. Garret Graves from Louisiana — a key ally of McCarthy’s in the debt ceiling negotiations.

The members wouldn’t comment on the way into the meeting, but Burchett looked especially dejected and threw his hands up in the air when asked by CNN if he would get his meeting. 

House Majority Leader Steve Scalise speaks during a news conference in Washington, DC, on Wednesday.

House GOP leaders, speaking at a news conference after their closed-door meeting, expressed confidence about the prospects for their debt ceiling bill and said a floor vote could come as soon as today.

“We want to get this done as soon as possible,” he added. “But more importantly, we want President Biden to finally start getting engaged in this process.”

The GOP leadership also defended their decision to make last-minute changes to the bill, after repeatedly insisting they would not re-open the bill.

“The bill was closed. You just heard that there were technical changes. There’s nothing of substance that was changed in the bill,” said House GOP Whip Tom Emmer. “So the bill was closed, and we will pass it.”

The changes were not, in fact, technical and actually made key changes to the bill that won over key holdouts.