The GOP ’s Modest Debt Limit Proposal

Romina BocciaHouse Republicans expect to vote on a plan to raise the debt ceiling this week. TheLimit, Save, Grow Act put forth by Speaker McCarthy would raise the debt limit by $1.5 trillion or suspend it until March 31, 2024 —whichever comes first. This is a modest proposal that would begin to put a dent in the fiscal challenge. The plan allows fiscal conservatives to assert themselves by clawing back spending driven by the Biden administration ’s priorities and reining in the regulatory power of Washington bureaucrats. It would neither stabilize the debt nor address the main drivers of future spending growth. Importantly, legislators should strengthen new discretionary spending limits by closing commonly abused loopholes to secure the $ 3.6 trillion in 10‐​year savings as intended.Shaves five percent off projected 10 ‐​year spendingThe Limit, Save, Grow Act is moderate in terms of its fiscal impact because federal debt would still grow as a share of the economy. At $4.5 trillion in projected savings, the plan is similar in size to the Budget Control Act of 2011 in terms of its impact on projected 10 ‐​year spending. McCarthy’s debt limit plan would shave a little more than five percent off the 10 ‐​year federal spending total, estimated at $80 trillion between fiscal years 2024 and 2033.If legislators instead aimed to stop the growth in the debt at no more than 100 percent of gross domestic product (GDP), they would need ...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs