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  • Washington Highlights

    House Republicans Propose Debt Limit Bill with Spending Caps, Medicaid Requirements

    Sinead Hunt, Senior Legislative Analyst
    Christa Wagner, Manager, Government Relations
    For Media Inquiries

    On April 19, House Republican leadership introduced the Limit, Save, Grow Act of 2023, legislation that would suspend the debt limit until March 31, 2024, or until the debt reaches $1.5 trillion, in the face of estimates from the Treasury Department indicating that the nation will begin to default on its payments as early as June if Congress does not act. The bill also would impose limits on future spending and impose new requirements on mandatory programs, a condition some House Republicans have made to secure their vote to lift the ceiling. 

    The bill would establish a spending cap for fiscal year (FY) 2024 discretionary funding, cutting funding by more than $130 billion from current levels down to FY 2022 levels. The measure would also rescind unobligated COVID-19 funding and limit discretionary spending growth to 1% per year from FY 2025 through FY 2033. 

    The legislation also proposes to reduce spending in the Medicaid program by adults without a qualifying disability or dependents between the ages of 18 and 55 to fulfill “community engagement requirements” such as work, community service, or a work training program to remain eligible for coverage. During the Trump administration, several states applied for Section 1115 waiver demonstration authority to implement community engagement requirements as a condition for Medicaid eligibility, although these approvals were subsequently withdrawn by the Biden administration. 

    The bill would prohibit the Biden administration from implementing the student loan forgiveness plan announced last year, which has been held up in court [refer to Washington Highlights, Sept. 9, 2022]. The proposal would also halt the administration’s proposed income-driven repayment plan and prevent any new plans that have a significant financial cost to the government. 

    House Speaker Kevin McCarthy (R-Calif.) has shared an intent to vote on the measure during the week of April 24 despite opposition to the proposal from several Republican members who have indicated that the proposed cuts do not go far enough. In an April 20 statement responding to the bill, the White House noted that “every House Republican who votes for this bill is voting to cut education, veterans medical care, cancer research, meals on wheels, food safety, and law enforcement.” The president and Senate Democrats have been urging for a clean increase to the debt limit without additional provisions.