The White House on Thursday dismissed House Speaker Kevin McCarthy’s proposal to extend the debt restrict and lower authorities spending, accusing the California Republican of “holding the American economy hostage.”

“Speaker McCarthy sided with the extreme MAGA wing of his conference and released a blueprint to devastate hard-working American families,” White House press secretary Karine Jean-Pierre stated in an announcement. “MAGA House Republicans are holding the American economy hostage in order to take a hatchet to programs Americans rely on every day to make ends meet.”

The White House’s response comes the day after Mr. McCarthy launched a Republican plan to keep away from the U.S. defaulting on its payments, which might trigger financial chaos throughout the globe.

Under Mr. McCarthy’s plan, the debt restrict would enhance by $1.5 trillion or till the top of March 2024, relying on which one comes first. The proposal additionally contains $4.5 trillion in financial savings by reducing discretionary spending to fiscal yr 2022 ranges and limiting the expansion of future spending. It would additionally allow the federal government to reclaim unspent COVID-19 funds, cancel President Biden’s scholar mortgage forgiveness program and rescind funding for the IRS.

Mr. Biden has referred to as on Republicans to cross a “clean” debt ceiling, that means it’s raised with no spending cuts connected. He additionally refused to barter with Mr. McCarthy till he revealed his personal plan. The two haven’t met with one another since February.

Mr. McCarthy, in the meantime, needs spending cuts and coverage concessions in change for elevating the debt restrict.

In her assertion, Ms. Jean-Pierre stated the GOP plan would kill jobs, take well being care away from “millions” of Americans, threaten meals help and lift power payments and taxes.

“House Republicans must avoid default and stop playing economic brinkmanship with the American people’s livelihoods and retirements,” she stated.

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