(Bloomberg) -- House Republicans are finalizing a bill combining an increase in the US debt ceiling with spending cuts, energy deregulation and other GOP priorities, Speaker Kevin McCarthy told reporters Thursday.

McCarthy added that his party would be prepared to pass the bill should President Joe Biden refuse to negotiate. Republicans hold a narrow majority in the House, but the bill is opposed by Democrats, who control the Senate. 

“The conference is very close. If the president doesn’t act, we will,” McCarthy said. “I think the markets would be very excited that one entity here is taking action.”

Democrats vowed to oppose the coming GOP bill. 

“Democrats are united and will not capitulate to an extreme MAGA wish list just because Republicans have reduced themselves to holding the economy hostage,” said Brendan Boyle of Pennsylvania, the top Democrat on the Budget Committee. 

White House Demands GOP Budget They Think McCarthy Can’t Deliver

The US debt ceiling must be raised by sometime this summer to avoid a market-rattling US payment default. Biden and McCarthy last met Feb. 1 to discuss the debt ceiling and have been locked in a standoff ever since. While Biden has produced a tax-increasing $7 trillion budget proposal for fiscal 2024, the GOP has delayed the release of their comprehensive plan. 

Instead, McCarthy sent Biden a letter this week outlining demands for a debt-ceiling increase that include cutting domestic spending to pre-pandemic levels, clawing back unspent Covid-19 funds, imposing tougher work requirements on anti-poverty benefits and easing regulations on energy projects. 

McCarthy said on Thursday the debt-increase bill that the GOP is working on would be based on the ideas in the letter. It is not yet clear how much the debt limit would be increased but the GOP is discussing a short-term bill to stave off a default until September. 

McCarthy said that he would prefer to negotiate with Biden, however, and would be willing to meet immediately with the president.  

The White House has demanded a full budget plan from the GOP before such a meeting, and continues to insist that any budget talks be separate from the debt ceiling — which it wants lifted or suspended without conditions. 

In a sign of growing animosity, McCarthy made a derogatory reference to the 80-year-old president’s age. 

“I would bring the lunch to the White House,” McCarthy said. “I would make it soft food if that’s what he wants.”

The White House reiterated its demand for a GOP budget. 

“What we really need from Speaker McCarthy and House Republicans is to see their budget,” Press Secretary Karine Jean-Pierre said. “Where’s the budget? They come up with excuses.”

--With assistance from Jennifer Jacobs.

(Updates with White House statement in the last line)

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