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Senate Democrats Blast House GOP Debt Bill

Jeff Carlson  

· 5 minute read

Jeff Carlson  

· 5 minute read

Senate Democrats pressed Republicans on the debt ceiling stalemate May 4 in a Senate Budget hearing on what they say will be unreasonable cuts in government spending if the debt limit bill (H.R. 2811) passed by the House becomes law.

The House bill is not expected to pass in the Democrat controlled Senate, but Republicans view it more as a cudgel to get Democrats to the bargaining table over a debt limit bill with significant reductions in spending.

Senate Majority Leader Charles Schumer, Democrat of New York, called the hearing, the “Default on America Act: Blackmail, Brinkmanship, and Billionaire Backroom Deals”, in order to raise public awareness of what’s in the GOP bill.

“If Republicans won’t level with the American people about their terrible bill, Senate Democrats are going to do it for them,” Schumer said.

The House bill would reduce deficits over 10 years by clawing back $80 billion in surplus funds allotted to the IRS, unspent COVID aid, eliminating clean energy tax credits in the Inflation Reduction Act (P.L.117-169), and setting spending at 2022 levels.

But Democrats claim the spending reductions could come at a cost.

Moody’s Analytics estimated that the Republican bill would cause 790,000 job losses in 2024.

“We need to end this drama as quickly as possible,” Mark Zandi, chief economist at Moody’s Analytics, said of the debt ceiling. “If we don’t, we’re going to go into recession and our fiscal challenges will be made even worse.” Testifying before the Committee, Zandi said the debt limit standoff between Republicans and the White House, and McCarthy’s bill, are coming “at a very inopportune time” for an economy that’s “working hard to keep its head above water.”

Zandi also said that if the if the X-date for the government to run out of funds is as soon as early June, “it seems a stretch for lawmakers to come to terms fast enough, and they instead will decide to pass legislation suspending the limit long enough to line the X-date up with the end of fiscal 2023 at the end of September.”

That possibility is already among discussion with Congressional leaders. Such action would buy time and combine the debt limit decision with the federal government’s fiscal 2024 budget, which is also must-do legislation for lawmakers to ensure the government is funded and avoids a shutdown.

Abigail Ross Hopper, president, and CEO of the Solar Energy Industries Association, urged lawmakers not to cut green energy credits from the Inflation Reduction Act, claiming it has already benefited the industry. “The policies enacted by the Inflation Reduction Act are having a huge impact across the country in the form of new American jobs, new domestic manufacturing capacity and improved U.S. energy security,” she testified. “The IRA is already ushering in significant investments in the clean energy economy, and a domestic manufacturing renaissance is underway.”

Fred Krupp, President of the Environmental Defense Fund told lawmakers that the Inflation Reduction Act is the most comprehensive Congressional action taken to date to address the climate crisis. “This landmark legislation puts the U.S. on a path to achieve the Biden Administration’s goal of cutting greenhouse gas emissions in half by 2030,” he said. “House Republicans’ plan to tie passage of the debt ceiling increase to the repeal critical IRA programs threatens our economy, public health and the clean energy future.”

Republican members on the Committee were quick to discredit the purpose of the meeting.

“It’s showboating to badmouth the fact that the only thing that’s been done on the debt ceiling and on the budget is what Republicans have done,” said Iowa Senator Charles Grassley, the ranking Republican on the committee. “Now the ball is in the court of the president to negotiate, and they want to distract from that.”


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