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This past week House Republicans narrowly passed their proposal to increase the debt ceiling until April 1, 2024.  The proposal would increase the debt ceiling by $1.5T and be linked to proposed cuts that would total over $4.5T over a 10-year period. In fact, the day before the vote, the Republican leadership got a big boost when the non-partisan Congressional Budget Office (CBO) estimated that the cuts in the bill could reduce spending by $4.8T over 10 years.

Passing the debt-ceiling bill was critical to Republican Speaker Kevin McCarthy in his game plan to get President Biden and Senate Democrats to sit down with him and try to negotiate a bipartisan budget and debt-ceiling bill.  As the Speaker was able to proclaim after passage of the Republican plan – only the Republican House has actually passed a bill increasing the debt ceiling.

Now the real challenge begins, as the two sides have to see if there is any middle ground.  The Republicans kept their commitment not to cut Social Security, Medicare or defense, meaning that the entire $4.5T was in other programs and by necessity making deep cuts in some areas.  The Republican bill also cut back many of the clean-energy measures that were included in last year’s Democratic centerpiece legislati...

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