House GOP leaders laid out a plan Friday to avert the upcoming debt cliff on their own next year, despite President-elect Donald Trump’s insistence that Congress handle it before he takes office.
During a closed-door conference meeting Friday afternoon, House Republican leaders proposed a commitment to raising the debt ceiling by $1.5 trillion early in 2025. GOP leaders would pair that with a $2.5 trillion cut in “mandatory” spending, the category of government funding that largely runs on autopilot and bankrolls benefits programs like Medicaid, Social Security, SNAP nutrition assistance, Medicare and welfare payments to the poorest Americans.
Under the proposed plan, hiking the debt limit and cutting spending would be done through the filibuster-skirting process Republicans hope to use next year to pass major bills on a simple-majority vote in the Senate. The plan would defy Trump’s demands, as the president-elect insisted this week that Democrats get roped into immediate action to lift the nation’s borrowing cap before he takes office in January.
It would also heighten pressure on congressional Republicans to quickly clear a party-line reconciliation bill next year, despite their ongoing struggles to unite around a basic strategy for harnessing the special budget power to enact priorities like more border security funding and tax cuts.
The debt limit is unpredictable, and delaying action is risky, a hazard Trump has made clear he doesn’t want to inherit. “Congress must get rid of, or extend out to, perhaps, 2029, the ridiculous Debt Ceiling,” Trump posted on social media early Friday. “Remember, the pressure is on whoever is President.”
But House Democrats remain united in opposition to lifting the debt limit before Trump takes office. After Speaker Mike Johnson abandoned a bipartisan deal this week to prevent a government shutdown at midnight Friday, Democrats — and a sizable number of conservatives — overwhelmingly voted against a Trump-backed bill that would have also suspended the debt ceiling for two years.
Now Republican leaders are planning a vote Friday on a funding patch without the language to avert the debt cliff, as they grasp for a new plan to prevent a funding lapse ahead of Christmas.
As the U.S. national debt sits at more than $36 trillion, the nation’s borrowing limit will be turned back on come Jan. 1, just before Republicans take control of Congress and ahead of Trump’s inauguration.
Then starts months of guessing as to when the U.S. might default on its debt, as the Treasury Department does its best to stay under the new debt ceiling by using so-called “extraordinary measures” to shift cash.
When the U.S. hit the debt limit last year, it took just over four months for the U.S. to approach the X-date, the Treasury secretary’s prediction for the day the nation would default on its loans. By deciding to act alone on the debt limit next year, rather than involving Democrats in a bipartisan negotiation, congressional Republicans would be adding an extra time constraint to that usually drawn-out process of making sure a reconciliation package meets the Senate’s rules and whipping near-unified Republican support with slim GOP majorities in both chambers.
While a debt default has never occurred, many economists predict that it would cause irreparable harm across the global economy. Even congressional brinksmanship over the debt limit has degraded confidence in the U.S. as a borrower, resulting in recent downgrades in the nation’s credit score.
Those risks will only increase the onus on Republicans to unite next year around a reconciliation plan, a challenging feat considering divisions among GOP lawmakers over fiscal issues, including whether to target mandatory funding or the discretionary spending Congress controls each year through regular funding bills.
