House Republicans on Wednesday passed the Limit, Save, and Grow Act, which raised the U.S. debt limit through March 31, 2024, or by $1.5 trillion, whichever comes sooner. The bill would also limit future spending by returning discretionary spending to pre-pandemic levels and caps growth of discretionary spending at one percent per year for the next ten years, while also limiting the number of able-bodied citizens that are eligible for federal food assistance programs (SNAP).
The bill was not negotiated with House Democrats, the Senate Democrat majority, or the White House. It passed on a party line vote, with four Republicans joining all Democrats in voting against the bill: Reps. Andy Biggs (R-AZ), Tim Burchett (R-TN), Ken Buck (R-CO), and Matt Gaetz (R-FL).
In addition to spending provisions, the bill included sections that would eliminate biofuel production incentives from the Inflation Reduction Act. Those programs included a temporary tax credit for sustainable aviation fuel and a low-carbon 45Q tax credit that will replace biodiesel tax credits in 2025. The bill would, however, protect those credits for any existing contracts that already rely on them.
At the last minute, Republican leadership decided to preserve three of the Inflation Reduction Act provisions, including a $1-per-gallon tax credit for biomass-based diesel, an expansion of the 45Q tax credit for carbon sequestration, and a $1.01-per-gallon tax credit for second-generation biofuels.
Negotiations between Congress and the White House on a debt limit increase have not begun. The Limit, Save, and Grow Act serves as a House Republican negotiating position on a debt limit increase, which the Treasury Department says must occur before sometime in June to avoid a U.S. default.
In addition to extending the debt limit, Congress must also pass annual spending bills, or else extend current funding levels beyond the end of FY2023, when spending expires on September 30, 2023.
