McCarthy Says House GOP Plans to Vote on Debt Limit, Spending Cuts

“Let me be clear: A no-strings-attached debt limit increase will not pass,” Mr. McCarthy said. “This will restore discipline to Washington.”

Democrats, who control the Senate, lambasted Mr. McCarthy’s demands. Mr. Biden has argued that Congress should raise the debt limit without broader changes to fiscal policy. 

“Speaker McCarthy is holding the full faith and credit of the United States hostage, threatening our economy and hardworking Americans’ retirement,” deputy White House press secretary Andrew Bates said. 

At stake in the impasse between the Republican-controlled House and Mr. Biden is the U.S. government’s ability to make payments on time—including on interest on its debts to bondholders. 

The Treasury Department started relying on special accounting measures earlier this year to keep paying the government’s bills after running up against the roughly $31.4 trillion borrowing limit. How long those measures will last is uncertain, with forecasters expecting them to be exhausted sometime between July and September. 

Photo illustration: Madeline Marshall

If lawmakers don’t raise the debt limit before Treasury’s accounting maneuvers run out, the federal government could miss payments, destabilizing global financial markets and the economy. 

Mr. Biden has said raising the debt ceiling should be separate from talks about government spending, but he has said he is open to negotiations about reducing deficits. Mr. Biden released a budget last month that reduces the deficit primarily by raising taxes—an approach that Mr. McCarthy rejected.

The White House and Democrats have called on Republicans to put out their own detailed plan for federal spending. But Republicans, who have a very slim majority in the House, have struggled to craft legislation for reducing spending and raising the debt limit that enjoys the near-unanimous support it would need to pass. 

Conservative Republicans have pushed for deep spending cuts, a prospect that some moderate House Republicans oppose. The House Republican leading the chamber’s budget committee recently said it could be months before the caucus tries to pass a broad budget plan. House Democrats are expected to unanimously oppose the GOP plans.  

While the pair met in February and discussed the debt limit, Mr. McCarthy repeatedly called on Mr. Biden to hold further talks on the topic. Mr. McCarthy on Monday blamed the Biden administration’s spending for inflation.

“The longer President Biden waits to be sensible to find an agreement, the more likely it becomes that this administration will bumble into the first default in our nation’s history,” Mr. McCarthy said.

Mr. McCarthy said House Republicans would try to revert federal spending on programs such as the military to last year’s levels. Going forward, growth on spending on so-called discretionary programs, which excludes Social Security and Medicare, would be limited to 1% a year, Mr. McCarthy said. 

Many Republicans support increases in spending on the Pentagon. An overall limit on federal spending would require far slower growth in military spending or cuts to nonmilitary programs—or a combination of both. A routine compromise in spending negotiations has been to increase military spending, a GOP priority, and nonmilitary spending, a Democratic priority, at similar rates.

Mr. McCarthy also said the House Republican plan would require the federal government to rescind money approved for responding to the Covid-19 pandemic that hasn’t been spent. And he said that able-bodied Americans without children or other dependents should have to work to receive government benefits. 

While House Republicans broadly support work requirements for programs such as Medicaid, which offers health insurance to low-income Americans, and food stamps, other cuts are expected to face opposition from more moderate Republicans. House Republican leaders held a call on Sunday with members to emphasize the importance of sticking together in the fiscal talks.

—Siobhan Hughes contributed to this article.

Write to Andrew Duehren at [email protected]