US Republicans present proposal to raise debt limit

US House Speaker Kevin McCarthy has unveiled his proposal to raise the debt limit.

The increase in the debt limit must therefore be accompanied by a reduction in government spending, the Republican said in the House of Representatives on Wednesday. The national budget must return to the level of 2022, from which expenditure may increase by a maximum of one percent per year. This would reduce inflation.

He also called for massive cuts to US President Joe Biden’s investment and climate protection program. Biden said in a speech in the state of Maryland on Wednesday that McCarthy’s plans would especially disadvantage socially disadvantaged Americans.

McCarthy’s proposal heralded the next round in the dispute over raising the debt limit. The Republican accused Biden of ignoring the “debt crisis” and called on the president to negotiate to avoid a default. Biden said he was ready to talk about a draft budget. However, the Democrats under Biden have long demanded that the debt limit be raised independently of budget negotiations.

In the US, Congress sets a debt ceiling at irregular intervals, determining how much money the state can borrow. The limit so far is around 31.4 trillion dollars (about 29 trillion euros). The current debt ceiling has now been reached in the US and the Ministry of Finance must, among other things, make redistributions in order for the government to pay its bills. If no deal is reached, bankruptcy is imminent between July and September, according to the independent budget office of the US Congress. (sda/dpa)