Last week, House Republicans passed the Limit, Save, Grow Act of 2023 in what they are calling a “sensible solution to raise the debt ceiling into next year and avoid defaulting on our debt for the first time in U.S. history.”
The bill, which is 320 pages, addresses the ongoing ‘extraordinary measures’ being taken by Congress to meet financial obligations without raising the debt ceiling. Still, the bill would cut federal spending to no more than fiscal year 2022 levels.
CBO estimates, if the bill is enacted and if appropriations that would be subject to caps on discretionary funding in the next 10 years are equal to those limits as specified, CBO’s projection of budget deficits would be reduced by about $4.8 trillion over the 2023–2033 period, relative to CBO’s baseline (see Table 1).
- Reductions in discretionary outlays would amount to $3.2 trillion
- Mandatory spending would, on net, decrease by $0.7 trillion, and revenues would, on net, increase by $0.4 trillion.
- As a consequence, interest on the public debt would decline by $0.5 trillion.
Among other things, the measures in the bill would also:
- block Biden’s student debt relief program, which provides $20,000 of relief to qualified borrowers if they received a Pell Grant and $10,000 if they did not.
- take back funding the IRA designated to improve customer service at the Internal Revenue Service (IRS) and allow the agency to pursue tax evaders
- According to the Congressional Budget Office (CBO), this IRS funding would increase government revenues by $207 billion and decrease the deficit by $127 billion through 2031.
- rescinds pandemic relief funding that remains unspent, including funding earmarked for future research and vaccine distribution
- eliminate certain energy tax credits that encourage clean energy adoption
OPPOSITION TO THE BILL
In March, Biden Administration officials sent letters to House Appropriations Committee Ranking Member Rosa DeLauro. The letter stated the impacts would be broad, ranging from public health and safety, to education, transportation, and housing. Those impacts include, but are not limited to:
- 350,000 families losing housing vouchers and 87,000 families losing affordable housing under HUD’s Project-Based Rental Assistance program, prompting mass evictions.
- Nearly 250,000 families losing Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) benefits.
- Specifically, the bill would subject older SNAP recipients (up to age 56) to work requirements, which currently only apply to adults without dependents up to age 49
- The bill also requires Medicaid beneficiaries aged 19-56 to meet income or work criteria, including participating in 80 hours of employment or community service per month to receive health care.
- At least 170,000 children from low-income families being kicked off Head Start programs, and another 105,000 children losing child care, affecting childrens’ future academic prospects and making it harder for their parents to work or attend school.
The National Education Association opposes the bill saying, among other things, that the measure will “hurt students and worsen educator shortages with devastating cuts of 22 percent or more in essential government programs.”
If the debt ceiling is not raised, opponents of the bill say the government will be short of cash and forced to make choices among competing priorities like Treasury bondholders and Social Security beneficiaries.
ALLEN ON THE BILL
After supporting the measure on the House floor, Congressman Rick W. Allen (GA-12) issued the following statement:
“This Administration and Washington Democrats’ excessive spending spree has increased our national debt to unsustainable levels, and we owe it to the American people to act immediately. Today’s passage of the Limit, Save, Grow Act shows the American people that House Republicans are working to avoid a default on our debt while President Biden continues to do nothing.
“Our sensible approach would rein in reckless federal spending that has caused inflation to skyrocket, save taxpayers nearly five trillion dollars over the next ten years, and strengthen the U.S. economy and workforce. While President Biden remains on the sidelines—despite Members of his own party encouraging him to return to the negotiating table—House Republicans are hard at work on behalf of the American people. Our national debt is one of the greatest threats facing future generations, and I thank Speaker McCarthy for bringing a fiscally responsible bill to the House floor that addresses the root of the problem: Democrats’ wasteful spending.”
You can read the measure here.
