The House of Representatives is set today to vote on a spending plan that would raise the debt ceiling another $2.4 trillion but also require deep and immediate spending cuts.
House Republican Leaders will present the “cut, cap, and balance” plan, which would allow the federal government to borrow an additional $2.4 trillion to pay its debts, in exchange for $111 billion in spending cuts in the upcoming budget year, which begins Oct. 1. The deal will also require another $6 trillion in cuts over the coming decade, proponents of the bill have said.
President Obama, however, has already said he would veto the measure, which also would make it illegal for the government to spend more money than it takes in.
The plan is “a common-sense proposal that will cut and cap federal spending to ensure that Washington begins to live within its means,” said House Majority Leader Eric Cantor to reporters in Washington Monday.
The Virginia Republican additionally stated that the plan would exempt spending for homeland security, defense, social security, military veterans and Medicare from being cut.
Nonetheless, the White House argued that the cut, cap and balance bill would negatively impact senior citizens, middle-class Americans and others.
“It would essentially require the dismantlement of our social safety net,” White House Press Secretary Jay Carney stated.
House Majority Leader John Boehner responded to the administration’s dismissal of the plan, saying, “It’s disappointing the White House would reject this commonsense plan to rein in the debt and deficits that are hurting job creation in America.”
The Obama administration is still seeking a so-called “grand compromise,” which would likely include more modest spending cuts coupled with tax increases. Earlier this month, Congressional Republican leaders walked away from an administration plan that was said to have included around $4 trillion in budget savings, but would have been coupled with $1 trillion in tax increases.
The “cut, cap and balance” proposal has received the stamp of approval from Tea Party activists and many conservative commentators. Limited government groups such as the Club For Growth and FreedomWorks touted the measure.
“The Cut Cap and Balance Act contains the best budget reforms to solve our country's fiscal situation,” read a press statement released by Club For Growth. “It makes real and immediate spending cuts, it places a hard cap on spending over the next few years, and it makes the debt ceiling increase contingent on Congress passing a Balanced Budget Amendment to the Constitution.”
The U.S. Treasury has said that by barring action by Congress to raise the $14.3 trillion debt ceiling, the Treasury will be unable to pay all the government's bills that come due beginning Aug. 3.