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Spending Cuts Should Be Part of Debt Ceiling Increase, Say Conservatives Who Now Back McCarthy -- WSJ

The Wall Street Journal · 01/06/2023 17:26

By Lindsay Wise

House Republicans who agreed to drop their opposition to Rep. Kevin McCarthy as speaker on Friday said the framework they've negotiated with him will address their demand that spending cuts must be part of any debt ceiling increase, but they declined to give details.

"We don't want clean debt ceilings to just go through and just keep paying the bills without some counteracting effort to control spending," said Rep. Scott Perry (R., Pa.).

"I'm not gonna get specific about it yet, because we're still having the conversations here in the last few hours," said Rep. Chip Roy (R., Tex.). "But what I'll say is, it's safe to say that we believe there ought to be specific concrete limits on spending attached to a debt ceiling increase...The debt ceiling is going to require some specific spending constraints."

Raising the nation's borrowing limit (https://www.wsj.com/articles/debt-ceiling-looms-as-central-challenge-for-divided-congress-11671858671) is shaping up to be one of the most consequential fights of the newly divided Congress. Conservatives have long abhorred raising the debt limit, which authorizes the Treasury to borrow money to pay for government expenditures Congress has previously approved.

They have viewed it as an opportunity to try to force spending cuts, an effort that has largely failed under both Republican and Democratic administrations. Democrats, meanwhile, have in recent years refused to discuss spending cuts in return for raising the debt limit.

House Republicans' difficulty in negotiations among themselves has left some market watchers concerned that Congress's typical game of chicken over the issue could at last spill into an economic disaster. Exactly when Congress will face a deadline for action on the issue this year is unclear.

Last June, the Bipartisan Policy Center estimated that the U.S. wouldn't exceed its roughly $31.4 trillion in authorized borrowing until July 2023 at least.

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January 06, 2023 17:26 ET (22:26 GMT)

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