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Speaker of the House Kevin McCarthy, R-Calif., speaks to reporters as he leaves the House floor in the Capitol after announcing his debt limit increase plan on Wednesday, April 19, 2023.
CNN  — 

Speaker Kevin McCarthy has settled on a plan to raise the national debt limit by $1.5 trillion in exchange for an array of cuts across domestic programs, setting off a furious effort to wrangle GOP votes and escalating a high-stakes standoff with the White House.

After months of internal talks, McCarthy and his leadership team are proposing a package to raise the nation’s $31.4 trillion debt limit by an additional $1.5 trillion. But the plan also states that if the new debt limit is not breached by March 31, 2024, then Congress must again increase the borrowing authority by that date, proposing to reignite a major fiscal battle in the middle of a presidential election year.

“Isn’t it risky to continue to have a debt this size?” McCarthy said Wednesday when asked by CNN about the risk of proposing a yearlong hike.

But McCarthy first will have to get a bill out of his chamber, something he is pushing for by next week.

In his plan, named the “Limit, Save, Grow Act,” House Republicans propose sizable cuts to domestic programs and intend to spare the Pentagon’s budget, returning funding for federal agencies to 2022 levels while aiming to limit the growth in spending to 1 percent per year. McCarthy said on the House floor that the bill would save $4.5 trillion, though official cost estimates have not yet been released.

As part of the 320-page bill, the GOP also proposes to block President Joe Biden’s plan to grant student loan forgiveness, repeal green energy tax credits and kill new Internal Revenue Service funding enacted as part of the Inflation Reduction Act. The measure would also impose new work requirements for the Medicaid program and new proposals to give Congress more power to halt regulations from the executive branch. The plan would also expedite new oil drilling projects while rescinding funding enacted to respond to the Covid-19 pandemic.

The plan has no chance of passing the Democratic-led Senate and has been attacked by Biden, who accused the House GOP on Wednesday of pushing a plan that would take the country to a “totally irresponsible” debt default that could wreck the economy. But McCarthy believes if the bill can pass the House, it would strengthen his position and force Biden to change his tune and negotiate a spending cut package before a default occurs as soon as this summer.

“Their extreme position risks provoking the very crisis they claim to want to avoid,” McCarthy said of Biden and Senate Democrats.

To win 218 House votes by next week, McCarthy needs to include enough sweeteners to woo skeptical conservative hardliners without alienating his moderate members and swing-district Republicans, limiting defections to no more than four Republicans.

The move sets off the biggest test of McCarthy’s young speakership as the White House has insisted that the borrowing limit be raised without any conditions, a position that the House GOP has steadfastly rejected as Washington stares at the prospect of the first-ever US debt default as early as this summer.

The White House on Thursday slammed the House speaker’s proposal as taking “a hatchet programs Americans rely on every day to make ends meet.”

Many House Republicans have not yet made up their minds on whether or not to support the plan.

“Right now I’m leaning no,” Rep. Nancy Mace, a South Carolina Republican from a swing district, told CNN. Mace added, “I don’t know why balancing the budget over the next decade can’t be part of the conversation.”

Rep. Andy Biggs, a conservative member of the House Freedom Caucus, said he likes “some, and I don’t like some” provisions in the bill and is “open to considering it.” But he said he’s “pissed off” that McCarthy is expected to take the bill straight to the floor and bypass the committee process. “I’m really upset about that,” he added. “I think it’s a crying shame.”

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McCarthy has been meeting Wednesday behind closed doors with conservative lawmakers who had been skeptical of raising the debt limit, including Reps. Tim Burchett and Greg Pence — both of whom have resisted raising the nation’s borrowing limit no matter what.

Pence told CNN on Tuesday that he’s open to backing McCarthy because he’s a “team player” and to “help Kevin.”

Burchett later said he’s concerned about continuing to raise the borrowing limit. “I’m worried about the future of our country economically, you know, we just continuously lie to the American public, say we’re gonna cut and cut and cut and then we agree to something and then here we are, we’re back at our limit again,” he said.

He did say, however, he likes what he’s read of the bill so far. “I will tell you this, dadgummit, Kevin McCarthy has kept his word and he’s put a lot of good things in there. There’s a lot of things in there that I agree with, very much.”

McCarthy did not promise to bring the bill through a House committee first and allow for a process that allows members to offer amendments, something House Republicans vowed to do for legislation in their new majority. But going that route could complicate McCarthy’s effort to pass the bill by next week.

“We’re going to bring it to the floor like we promised we’d do something about this,” he told CNN.

Cutting safety net programs

The bill would fulfill Republicans’ longstanding goals of beefing up work requirements in food stamps and adding them to Medicaid, though the measures are not as extensive as some in the party have called for.

Under the package, childless, able-bodied adults ages 18 to 55 would be able to get food stamps only for three months out of every three years unless they are employed at least 20 hours a week or meet other criteria. Currently, that mandate applies to those ages 18 to 49, though it has been suspended during the Covid-19 public health emergency, which expires on May 11.

It would also require certain adult Medicaid recipients to work, perform community service or participate in an employment program for at least 80 hours a month or earn a certain minimum monthly income. It would apply to those ages 19 to 55, but not those who are pregnant, parents of dependent children, physically or mentally unfit for employment or enrolled in education or in substance abuse programs, among others.

Medicaid has never had a work requirement, but the Trump administration granted waivers to several states to impose such a mandate on certain enrollees. Litigation stopped or chilled states’ implementation of the effort, and the Biden administration subsequently withdrew the permissions – though a federal district court judge allowed the initiative to proceed in Georgia.

The bill would also make changes to the work requirement provisions of the Temporary Assistance for Needy Families program, which was created out of the 1996 welfare reform package.

All in all, the measures would lead to fewer people receiving aid from these safety net programs, which would save the federal government money.

Meanwhile, returning federal government funding to 2022 levels would also prompt an array of service cuts.

Earlier this year, House Appropriations Committee Ranking Member Rosa DeLauro, a Democrat from Connecticut, asked government agencies about the potential impact of reducing fiscal 2024 discretionary spending back to fiscal 2022 levels. Examples the agencies gave included shutting down 125 air traffic control towers, slashing nutrition services for 1 million senior citizens and eliminating affordable housing assistance for close to 1.1 million families.

The House GOP bill also seeks to rescind unobligated funds from the Covid-19 relief packages that Congress passed to respond to the pandemic. Estimates on how much of the roughly $4.5 trillion in relief remains vary, with federal agencies pegging it at between $90 billion and $120 billion. The unobligated funds include money to shore up financially troubled multiemployer union pension funds, transit infrastructure grants that have already been allocated and support for veterans’ medical care that will be used by the end of the fiscal year.

This story has been updated with additional information.

CNN’s Melanie Zanona, Alayna Treene and Lauren Fox contributed.