McCarthy set to propose 1-year debt limit extension tied to spending reforms

House Speaker Kevin McCarthy is set to propose next week a 1-year debt limit extension tied to spending concessions from President Biden and the Democrats.

According to a source familiar with the ongoing negotiations, concessions extracted in exchange for a debt limit increase would yield approximately $4 trillion in savings for taxpayers over a 10-year period.

The spending reforms sought by the House GOP include recovering unspent COVID stimulus funds, capping domestic spending at FY2022 levels and only allowing it to grow 1% over the next 10 years as well as enforcing a work requirement for recipients of Medicaid who are under 60 years of age and do not have children.

In February, House Republicans proposed many of these spending reforms, including halting federal spending on Biden's student loan forgiveness plan as well as Democrat climate-related spending such as billions on electric vehicles for the U.S. Postal Service. It is unclear whether these proposals will be part of the debt limit plan McCarthy is set to roll out next week.

Biden, Senate Majority Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries have been pushing for a clean debt limit increase without any strings attached. McCarthy has met with Biden at the White House to discuss the debt ceiling, but no agreement has been reached.

Biden is blaming House Republicans for the lack of an agreement on raising the debt ceiling.

"MAGA Republicans in Congress are putting our economy in jeopardy by threatening to refuse to pay America's bills," Biden tweeted on Monday. "Bills that took 200 years to accumulate. That would mean for the first time, America would default on its debt. Not on my watch."

The statutory debt limit has been reached, and the Treasury Department is currently taking "extraordinary measures" as Congress and the White House hash out an agreement.

The statutory deadline for Congress to adopt an annual budget is April 15. The last time Congress met that deadline was 2004, according to the Congressional Research Service. 

McCarthy's office was not available for comment before press time.