Debt Ceiling Agreement better than House Bill, Harmful Provisions still Remain
There are many things which could be cut in the present Debt Ceiling bill which alleviate the unnecessary need to cut assistance to those who need it. Food assistance for very low-income older adults is not one of them. A million or so of older adults aged 50-54 will or are now at risk of losing food assistance, including a large number of women. Some of our legislators are in drastic need of the same physical labor to which many the fifty-something year olds will be exposed to now. What exactly are we talking about here?
The SNAP policy takes food assistance away from many people aged 18-49 who don’t have children at home and can not secure an exemption. Such individuals can receive SNAP for only three of a 36-month period if they do not document their meeting a 20-hour-per-week work requirement.
Speaker McCarthy’s bill would expand the policy to include people aged 50 through 55. About 1 million such individuals participate in SNAP and meet those criteria in a typical month. (The figure was 900,000 in 2019, the most recent year for which a full year of data are available.
A similar and less restrictive program was tried in Arkansas resulting in poor results . . . large numbers of people losing coverage and no impact in employment outcomes. McCarthy’s proposal is more expansive. It applies to a wider age range that includes more older adults. The proposal is not explicitly limited to adults who receive coverage through the Medicaid expansion. It also does not exempt some groups which were exempt under the Arkansas policy, including postpartum people, people identified as “medically frail,” and people receiving unemployment benefits. Arkansas’s policy was in place for seven months. It was shut down by the courts, which found that the requirements ran counter to Medicaid’s statutory purpose of providing health coverage.
What amount are we talking about? More than 1 million people in Snap would be at risk of having their it taken away due to being subject to the new requirements and could not be excluded automatically based present exclusions readily available to states. Projected are 1 million fewer adults per year would have SNAP because of the requirements. At $6.1 dollars per day, we have a savings of ~$2.22 billion by cutting off a food subsidy. Miniscule when compared to the 2017 trump tax cut due to sunset for people (not corporations) in 2025.
Debt Ceiling Agreement Reflects Improvements Over House Bill, Harmful Provisions Remain, Center on Budget and Policy Priorities, Sharon Parrott – CBPP President
Commentary on the Reported Deal to Raise the Debt Ceiling
While the debt ceiling agreement announced last night is a significant improvement over the radical House bill, it is not the deal the country deserves. There are a number of troubling elements, including the provision that will put at risk food assistance for very low-income older adults. This policy will increase hunger and poverty among that group, runs contrary to our nation’s values, and should be rejected. The nation must pay its bills — but that shouldn’t mean enacting legislation that leaves people who already struggle to afford the basics worse off.
We should never have been in this situation. We are here only because House Republicans twisted the rules of democracy — using the debt ceiling to hold hostage the jobs and well-being of millions of people to demands for damaging policies they couldn’t pass even when they held full control of Congress and the White House.
The agreement puts hundreds of thousands of older adults aged 50-54 at risk of losing food assistance, including a large number of women. Doubling down on the existing, failed SNAP work-reporting requirement for adults aged 18-49 without children, this provision ignores the strong evidence that it takes food assistance away from large numbers of people without increasing employment or earnings.
A large share of low-income adults in this age range are in poor health; many of them will lose basic assistance they need to buy groceries because they aren’t able to meet the work-reporting requirement; and the exemption system, notoriously laden with red tape, won’t work. Decades of experience under the existing policy shows that many of those whose SNAP benefits are taken away should have been exempt. Those newly at risk of losing food assistance have very low incomes,
typically well below the poverty line, and will be pushed even deeper into poverty when they lose SNAP.
The agreement includes some improvements to the existing failed SNAP policy. While the new exemptions are positive, improvements for some don’t justify expanding to others a failed policy that will increase and deepen poverty.
Under the agreement, veterans and people experiencing homelessness can be exempted from the requirements if states properly identify that they meet these criteria. But many veterans and people experiencing homelessness should have been exempt under the current criteria; the need for a special category exposes the failures of the current exemption system. And most people aged 50-54 newly subject to the requirements are not veterans or people experiencing homelessness.
Taking about $8 per person per day on average of food assistance away from older adults was never about reducing deficits — the savings are tiny in the context of the federal budget and the U.S. can easily afford to ensure that people can afford food.
While details are still emerging, the agreement also includes some problematic provisions that double down on TANF’s failed work requirement structure. It effectively ratchets up requirements on states to show that very low-income parents receiving TANF income assistance are meeting rigid work requirements that are often ill-suited to the needs of families. Some states will face challenges meeting the requirements and may respond by restricting access to assistance. The changes could limit states’ flexibility to design effective programs and may lead some states to be more reticent to respond to rising need or improve their programs in ways that help families but make meeting inflexible federal requirements more difficult.
The existing, rigid structure has led many states to take away or severely restrict access to basic income assistance for large numbers of very low-income families with children without improving long-term employment outcomes. It is counterproductive to double down on these failed policies. State officials from red and blue states alike agree they are a hindrance to meeting the needs of very low-income families.
In a major improvement over the House-passed bill, President Biden rejected policies that would take away health coverage from people unable to meet a work-reporting requirement. But a person’s health doesn’t depend only on health coverage — adequate food and income are critical drivers of health.
Failed work-reporting requirements never should have been a part of the debt ceiling discussion. These policies are steeped in racism and unfounded stereotypes about people with low incomes. They ignore the reality that most people who can work do work and that many people receiving assistance are working, are between jobs, or have reasons — like health or caregiving — they aren’t able to work, at least temporarily.
Even as House Republicans insisted on harmful work requirements for low-income people, they prioritized making it easier for wealthy people to cheat on their taxes. While full details remain unclear, it appears that the agreement calls for a substantial rescission in the IRS funding — $10 billion in 2024 and up to that amount in 2025 — that was provided in the Inflation Reduction Act (IRA). While smaller than the cut in the House-passed bill, this could be as much as one-quarter of the funding provided under the IRA. The Republican focus on protecting wealthy tax cheaters is a disservice to honest taxpayers and the cut sets a terrible precedent, undermining efforts to make the IRS an effective agency that better serves these honest taxpayers and enforces the law.
The agreement represents tough compromises on funding for non-defense priorities and significant improvements over the policies put forward in the House Republican debt-ceiling-and-cuts bill. The result, however, will still be cuts overall in key national priorities when the very real impact of inflation is taken into account.
While protecting defense from cuts, the agreement cuts the part of the budget that funds key building blocks of our economy and investments that are critical for the well-being of people and communities, from child care, education, job training, and housing, to medical research, environmental protection, and public health. Neither Republicans nor the White House has identified program areas they believe should be cut. It will be critical for policymakers to ensure that as appropriations bills are written, they protect the areas most important to safeguarding the well-being of those who face real difficulties affording the basics.
Republicans’ insistence on cutting IRS funding, refusal to consider any revenue increases, and opposition to provisions that would have reduced prescription drug costs undermine their claims of concern about deficits. Their bill included far deeper IRS cuts that would have gifted more than $100 billion to tax cheats, and their broader tax agenda would extend — without paying for — the 2017 Trump tax cuts, which are heavily tilted toward the wealthy, at a cost of $300 billion per year.
The contrast here is striking. House Republicans are pressing for policies that would protect wealthy tax cheaters and tax cuts for high income people — policies that, because of a long history of racism, disproportionately benefit white people. At the same time, they also have pushed for harmful policies that would take away assistance from people who need it and shortchange investments that expand opportunity — policies that disproportionately hurt people of color, whose access to opportunity has been systematically limited.
Looking forward, we must find a path to abolish the debt ceiling and end the absurd debt ceiling hostage-taking that Republicans engage in when they can use it as a bludgeon against a Democratic president.
Freed of this cycle of manufactured crisis, policymakers could turn to the debate we should be having, about the country we want to be and the policy agenda that will help us get there. Such an agenda would broaden opportunity and reduce the too-high levels of hardship that individuals and families endure. And it would ensure that everyone has the resources to afford the basics, including food, a roof overhead, and health care.
McCarthy Bill Uses Debt Ceiling to Force Harmful Policies, Deep Cuts, cbpp.org, authors
Senate launches late-night votes to stave off US default, wrap up Biden-McCarthy debt ceiling deal
AP – just in
Rushing to prevent a U.S. debt default, the Senate pressed ahead Thursday night to give final passage to a debt ceiling and budget cuts package and send it to President Joe Biden’s desk to become law before the fast-approaching deadline.
Senate Majority Leader Chuck Schumer announced a late-night floor schedule with nearly a dozen amendments up for debate to the package Biden negotiated with Speaker Kevin McCarthy, though none was expected to be approved or change the overall deal.
“Let’s finish the job,” Schumer implored his colleagues.
Passage in the Senate will require cooperation between Democrats and Republicans, much the way the narrowly divided House was able to approve the compromise late Wednesday night. Fast action is vital if Washington is to meet next Monday’s deadline, when Treasury has said the U.S. will start running short of cash to pay its bills, risking a devastating default.
Having remained largely on the sidelines during much of the Biden-McCarthy negotiations, several senators were insisting on debate over their ideas to reshape the package. Conservative Republican senators proposed amendments including to further cut spending, while a Democrat sought to remove a controversial natural gas pipeline from the package.
Defense hawks complained that military spending, though boosted in the deal, was not increased enough — particularly as they eye supplemental spending that will be needed this summer to support Ukraine in the war against Russia.
“We need safety and security,” said Sen. Lindsey Graham, R-S.C. “To my House colleagues, I can’t believe you did this.”
But making any changes at this stage seemed unlikely, and even opponents of the final deal said they would not hold it up.
Instead, senators concerned about the level of military spending secured an agreement from Schumer, which he read on the floor, stating that the debt ceiling deal “does nothing” to limit the Senate’s ability to approve other emergency supplemental funds for national security, including aid to Ukraine, or other national interests. …
What seems to be happening is that GOP senators are proposing amendments and Dem senators (in the majority) are voting them down, and Schumer intends to continue this process until there are no more amendments offered.
Apparently, Schumer & McConnell agreed that they would put up only 12 amendments (6 for each party), which would be voted down (or up) one at a time, and then have the vote for the Biden-McCarthy Act. So, that’s what they did.
Voting in the Senate is complete.
Dem GOP Ind Total
Yes 44 17 2 63
No 4 31 1 36
The motion is carried.
How Senators voted
Fred:
And greater than 60 votes too.
This is a clear victory for centrism.
In that it is ‘kicking the can two years down the road’, perhaps.
Senate Passes Debt Limit Bill, Staving Off a Calamitous Default
NY Times – June 1
After weeks of political impasse, tense negotiations and mounting economic anxiety, the Senate gave final approval on Thursday night to bipartisan legislation suspending the debt limit and imposing new spending caps, sending it to President Biden and ending the possibility of a calamitous government default.
The approval by the Senate on a 63-to-36 vote brought to a close a political showdown that began brewing as soon as Republicans narrowly won the House in November, promising to use their new majority and the threat of a default to try to extract spending and policy concessions from Mr. Biden.
The president refused for months to engage with Speaker Kevin McCarthy but finally did so after the California Republican managed in April to pass a G.O.P. fiscal plan, spurring negotiations with the White House that produced the compromise last weekend.
On Thursday night, Mr. Biden cheered its passage, promising to sign it as soon as possible and address the nation from the Oval Office on Friday evening.
“Tonight, senators from both parties voted to protect the hard-earned economic progress we have made and prevent a first-ever default by the United States,” he said. “No one gets everything they want in a negotiation, but make no mistake: This bipartisan agreement is a big win for our economy and the American people.”
The agreement suspends the $31.4 trillion debt limit until January 2025, allowing the government to borrow unlimited sums to pay its debts and ensuring that another fight will not occur before the next presidential election. It sets new spending levels that will be tested as Congress begins to write its annual spending bills. Other policy changes on energy project permitting and work requirements on social benefits were also included.
“We saved the country from the scourge of default,” Senator Chuck Schumer, Democrat of New York and the majority leader, exulted after the bill cleared Congress. …
The Case of the Disappearing Debt Disaster
NY Times – Paul Krugman – June 1
Just a few days ago it looked as if G.O.P. extremism might set off a global financial crisis. The U.S. debt ceiling — which allows Congress to determine spending and revenue, then refuse to permit borrowing to cover the difference — seemed to give Republicans, who control the House, access to a financial doomsday machine: By refusing to raise the debt limit they could provoke a U.S. default that, given the key role played by U.S. debt in the world financial system, could have been catastrophic.
That doomsday machine, in turn, seemed to give Republicans far more power than a party narrowly controlling one house of Congress should possess. Would they use that power to demolish President Biden’s accomplishments?
In fact, they barely scratched Biden’s paint. And the mystery is why.
Like many — I think most — observers, I didn’t see this coming. In the spring Republicans seemed to be converging on demands for harsh spending cuts, especially to Medicaid. The Biden administration was counting on self-proclaimed centrists and business groups to lean on Republicans to back off; they didn’t. And publicly at least, Biden officials repeatedly rejected all possible end runs around the debt ceiling. Republicans seemed to be in a strong bargaining position.
Yet in the end we got some spending caps that would probably have happened even without the attempt to take the economy hostage, since “discretionary” spending would have had to pass the House in any case. We got an extension of work requirements in the food stamp program for Americans in their 50s, which will cause some loss of coverage — not because they refuse to work, but because they’ll be stymied by extra red tape.
And we got a side agreement to cut $20 billion from the $80 billion in additional funding for the I.R.S. that was included in the Inflation Reduction Act. But that $80 billion was for a decade. In practice, efforts to crack down on wealthy tax evaders will probably be little changed in the next few years, and the I.R.S. will simply come back for more money later.
Overall, the administration made hardly any major concessions; this debt standoff ended up being far less consequential than the debt ceiling crisis of 2011.
So how did Biden, whom right-wingers constantly deride as senile and incompetent despite a series of remarkable legislative achievements, pull this off? …
Eventually we may get a blow-by-blow account of how the debt negotiations went down. Until then, it’s worth noting several broader trends in the political environment that probably strengthened Biden’s hand.
First, Democrats are no longer intimidated by deficit scolds. Back in 2011, the Obama administration seemed eager to win approval from a Beltway establishment dominated by Very Serious People who insisted that debt and deficits — as opposed to, say, persistent high unemployment — were the most crucial issue facing the nation. President Barack Obama came very close to agreeing to a bargain that would have raised the age of Medicare eligibility.
These days Democrats don’t seem to care much about the deficit scolds; they’ll probably care even less given the craven behavior of prominent groups during the debt confrontation.
Second, Republicans don’t actually care about the budget deficit. Arguably they never did. But a dozen years ago many in the media and the political establishment took their fiscal posturing at face value. These days their true lack of concern is out in the open, so it’s hard to find a commentator who seriously believes that a party seeking to prevent a crackdown on tax evasion cares about debt.
Third, the Republican Party has largely backed off on its push to drastically shrink government. We’ve come a long way from 2005, when President George W. Bush tried to privatize Social Security. These days even hard-right budget proposals tend to exempt Social Security and Medicare, and I believe that Republicans are beginning to realize that Medicaid has also become an extremely popular program.
Coming next: The realization that even white, rural, very MAGA areas like, say, Kentucky’s Fifth Congressional District have become deeply dependent on food stamps.
Indeed, it’s hard to avoid the sense that the G.O.P. has, in general, lost interest in fiscal policy. Apparatchiks at right-wing think tanks still inveigh against the evils of big government, and the donor class is as opposed as ever to paying taxes. But all the real passion on the right now seems to revolve around social issues like ending abortion rights and expunging any mention of racism from history classes.
In a way it’s kind of funny. Critics of Democratic politics used to berate activists for focusing on social issues while allowing Republicans to dictate the economic agenda. Now Republicans are waging war on the Disney corporation while the Biden administration establishes large-scale industrial policy to fight climate change.
So what happened on the debt negotiations? Maybe it came down to this: Kevin McCarthy wasn’t willing to blow up the economy to extract policy concessions because he’s the leader of a party that no longer cares about policy.