Secretary of the Treasury Janet Yellen announced on May 1 that the nation could hit its existing debt ceiling as soon as June 1, 2023, mere weeks away and sooner than had previously been expected. The Treasury is currently using “extraordinary measures” to continue paying the country’s debt. Following this announcement, President Biden invited Congressional Leadership, Speaker Kevin McCarthy (R-CA), Senate Majority Leader Chuck Schumer (D-NY), House Minority Leader Hakeem Jeffries (D-NY), and Senate Minority Leader Mitch McConnell (R-KY), to meet with him on May 9th to further discuss avoiding default and negotiate raising the debt limit.
The House passed their debt limit bill on April 28th which would raise the debt limit for less than one year in exchange for deep cuts and spending caps for the next decade. The National Health Law Program (NHeLP) has released a fact sheet explaining why the proposed work requirements for Medicaid are harmful. The Center on Budget and Policy Priorities (CBPP) also published a new paper about the proposed changes to the Temporary Assistance for Needy Families (TANF) program, which “double down on TANF’s already expansive, rigid, and ineffective work requirements,” and limit states’ flexibilities in distributing cash assistance, changes that do not align with the advice of nearly all the witnesses that testified in the Subcommittee hearing last month.
The Senate Budget Committee held a hearing on the bill on Thursday, May 4th, with economic experts to respond to the Republican proposal, who nearly unanimously agreed that it would be catastrophic to the economy if the United States were to default on its debt. Several witnesses also noted the need for a bipartisan solution and encouraged the committee to consider doing away with the debt limit altogether.
Senators on both sides of the aisle agreed that default was not an option, but the parties disagreed on the best path forward. Several Democratic Senators pointed to the deep cuts for programs that serve children and families that would result from the House bill. Senator Lujan (D-NM) highlighted Head Start programs, as someone who went through the program, and noted the dramatic cuts that are being proposed. He stated that “one of the greatest returns on a dollar is an investment in education of children,” which witness Dr. Zandi corroborated. Senator Patty Murray (D-WA) noted that families would lose food benefits, veterans would lose housing, and there would be steep cuts to child care and medical research, while Senator Stabenow (D-MI) pointed out that one million seniors would not be served by Meals on Wheels.
Republican Senators focused on the strain that inflation has on families and the need to address the rising cost of goods and services as a motivator behind the House proposal to reduce spending.
