McCarthy unveils $1.5 trillion debt ceiling package

In a speech on the House floor, McCarthy said the plan includes the following spending cuts:

• Setting discretionary spending at Fiscal Year 2022 levels
• Capping spending growth at 1% a year
• Pulling back unspent COVID funds
• Repealing IRS funding legislation
• House energy legislation called HR1
• Ending President Biden's student loan forgiveness
• Repealing some Inflation Reduction Act tax credits

Text of the legislation should be posted on Wednesday, McCarthy told Punchbowl News.

• A floor vote is expected next week. It would be dead on arrival in the Democratic-controlled Senate.

Between the lines: Economists are now warning the debt ceiling could come faster than expected with lower tax collections.

• The bumpy economy could force the timeline to speed up from August to as early as June.
• Back in February, the Congressional Budget Office said it expected a budget deficit of $1.4 trillion in 2023.

Behind the scenes: McCarthy's wrangling has alienated multiple members of his leadership team.

• In a speech on Wednesday, he said House Budget Chair Jodey Arrington (R-Texas) will lead the legislation.

The bottom line: 16 of the 222 House Republicans have never voted for a debt ceiling hike, Axios' Stef Kight reported in February.