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Last week House Republicans narrowly passed their debt ceiling and spending reduction proposal.  The legislation increased the debt limit by $1.5T, or until April 1, 2024, whichever comes first.  Since many Republicans generally oppose increasing the debt ceiling, the Republican Leadership combined the $1.5T ceiling increase with proposed cuts that would total $4.5T over a ten-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 ten years.

Passing the debt ceiling bill was a major test for Speaker Kevin McCarthy’s leadership.  In the end he was able to barely eke out a one vote victory with the final tally being 217 Y to 215 N.  Legislation dies on a tie vote. In the end four Republicans voted against their leadership, but the promise of major budget cuts and new tough work requirements for social welfare programs gave the other conservative Republican House members a framework they could support.

A victory was essential to Speaker McCarthy as key to his game plan is to get President Biden and Senate Democrats to sit down with him and try to negotiate a bipartisan budget and debt...

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