On Saturday, June 3rd, President Biden signed the debt limit bill, titled the Fiscal Responsibility Act, into law, one week after he and Speaker of the House Kevin McCarthy (R-CA) had struck a deal on the details of the legislation and just ahead of the June 5th deadline. As reported last week, the bill raises the debt ceiling until 2025, after the 2024 election, in exchange for keeping non-defense spending roughly flat with current (FY 2023) levels in 2024 and 2025 and clawing back some unspent COVID funds and new funding for the IRS, which was included in last year’s appropriations bill. Defense and veterans funding is exempt from these cuts. The bill includes spending caps for the next two years and unenforceable appropriations targets after that, with a 1% sequestration cut that is triggered if Congress fails to pass all twelve appropriations bills by the end of the year.
The bill also includes some new work requirements in SNAP and TANF, but work requirements for Medicaid, which the House GOP bill included, were not included in the final legislation.
SNAP. This agreement would extend the time-limits on benefits for older adults ages 50-54. This extension phases in over time. There are exemptions (applying to the full age group – 18-54) for people who are unhoused, veterans, and young people transitioning from foster care to independence, and these changes take effect immediately.
TANF. The new bill resets the caseload reduction credit, which is calculated based on a comparison of the current number of families receiving TANF cash assistance with the caseload in 2005, to 2015; this change effectively will increase the share of the caseload that some states must engage in work activities to meet the rate. Two positive provisions in the final bill are new data collection requirements and a new work outcomes pilot.
The bill passed the House in a bipartisan 314-117 vote on Wednesday and the Senate in a bipartisan 63-36 vote on Thursday, with some Congress members on both sides of the aisle voting against the bill. Conservative Republicans argued that the bill did not reduce spending in a meaningful way, while progressive Democrats took issue with the work requirements and spending caps. House Appropriations Ranking Member Rosa DeLauro (D-CT), said in a statement about the deal, “this is a problematic agreement that protects billionaires from taxes and hurts middle class and working families. It also subverts the annual appropriations process, constrains only domestic investments, and sets us on a dangerous path.”
