Skip to main content
Best News Website or Mobile Service
WAN-IFRA Digital Media Awards Worldwide 2022
Best News Website or Mobile Service
Digital Media Awards Worldwide 2022
Hamburger Menu




US House gets update on nation's US$31 trillion debt ahead of Biden budget proposal

US House gets update on nation's US$31 trillion debt ahead of Biden budget proposal

President Joe Biden at the Capitol in Washington, Mar 2, 2023. (Photo: AP/J. Scott Applewhite)

WASHINGTON: US House Republicans and Democrats showed no sign of surrendering their partisan positions after a briefing on the nation's US$31 trillion debt on Wednesday (Mar 8), the day before President Joe Biden is due to unveil his 2024 spending plan.

Biden said his proposal will cut the nation's deficit by nearly US$3 trillion over 10 years, though it relies on tax increases to do so while Republicans are pushing for sharp cuts to domestic spending.

The closed-door meeting for House of Representatives members was meant to establish a common set of facts for the debate from the director of the nonpartisan Congressional Budget Office, Phillip Swagel, who has warned the federal debt will surpass the size of the US economy within the next decade if no steps are taken.

"It's important for members of both parties to get the information and be able to process it together," said Republican Representative Mike Lawler. "We're not always going to agree, obviously. But frankly, I think that's part of the problem in Washington. There's not enough opportunity to do these things together."

Republicans hold a majority in the House while Democrats control the Senate.

The White House said Biden's budget plan is expected to extend the life of the Medicare healthcare plan for Americans age 65 and older, while raising taxes on billionaires and other high-income individuals.

Republicans are expected to follow up by Apr 15, and have been eying US$150 billion in cuts to nondefense discretionary programs for 2024 that would reset spending to fiscal 2022 levels and save US$1.5 trillion over a decade by holding spending increases to an annual 1 per cent.

"It’s my hope that Republicans will release their budget sooner rather than later, so we can have a thoughtful discussion about alternatives," the top House Democrat, Hakeem Jeffries, said as he emerged from the meeting.

The emergence of the two budgets is seen as the starting gun for negotiations between House Speaker Kevin McCarthy and Biden over spending for fiscal 2024, which begins on Sep 1.

The stakes of those talks are elevated this year as the federal government is expected to hit the US$31.4 trillion debt ceiling by summer. Failure to act by that time could trigger a potentially disastrous default.

McCarthy wants Biden to agree to spending cuts before his narrow Republican House majority would agree to raise the debt ceiling. Biden insists that Republicans must agree to a "clean" debt ceiling increase without a preliminary deal on spending.

"We're at a tipping point," McCarthy said of the nation's fiscal position. "Very seldom do we ever get together as members outside the chambers. We do that in classified briefings and ... I think this is just as important as any security issue."


Each party blames the other for the country's fiscal position. Republicans say spending under Biden has added to the national debt, while Democrats point to tax cuts for businesses and wealthy individuals that were passed under former president Donald Trump and cost the budget US$2 trillion in revenue.

On Wednesday, the conservative Republican Study Committee circulated a seven-page memo containing scores of ideas for spending cuts and reforms that would cap discretionary spending, deregulate the energy sector, prioritize debt payments and make the Trump tax cuts permanent.

The influential House caucus, which represents nearly 80 per cent of the House Republican conference, is expected to produce its own budget plan in April, independently of House Budget Committee Chair Jodey Arrington's proposal.

The White House accused Republicans of planning to add US$3 trillion to the deficit, citing its own compilation of Republican legislation that did not take the party's cost-cutting proposals into account.

Biden and McCarthy last met over a month ago at the White House, and the speaker said he hoped Wednesday's meeting with Democrats would spur the president to move forward on talks.

Neither Biden's proposal nor the one Arrington's committee is preparing would result in a balanced budget.

In a blog post this week, Swagel said Congress could "nearly stabilize" the growth of federal debt by reducing deficits by an average of $500 billion a year for a decade-long savings of US$5 trillion, a sum that dwarfs the combined 10-year savings proposed by Biden and Arrington.

Overall, CBO projects that annual deficits will average US$2 trillion between 2024 and 2033, approaching pandemic-era records by the end of the decade.

"Republicans and Democrats alike know that we have to do something about the deficit," said Democratic Representative Veronica Escobar. "The difference in approach is the issue here."

Source: Reuters/fh


Also worth reading