US House Speaker Kevin McCarthy recommended extending the nation’s debt limit by $1.5 trillion on Wednesday in order to avert a default in the world’s largest economy.
His proposal, dubbed the Limit, Save, Grow Act of 2023, would lift the debt limit by $1.5 trillion or until March 31, 2024, whichever comes first, restore discretionary expenditure to 2022 levels, and limit annual spending growth to 1%.
The United States’ debt ceiling is currently set at $31.4 trillion.
McCarthy slammed President Joe Biden on Monday for refusing to negotiate debt-limit issues, saying “without exaggeration, American debt is a ticking time bomb that will detonate unless we take serious, responsible action.”
In recent months, US Treasury Secretary Janet Yellen has encouraged Congress to suspend or raise the debt ceiling in order to avert a default on federal commitments.
The United States’ debt ceiling was reached on January 19, and Yellen stated that her agency has begun taking “extraordinary measures” to avoid a default.
Between 1997 and 2022, the US never defaulted on its debt, and the debt ceiling was increased 22 times.