Debt Limit Bill Averts Major Disaster, Doesn’t Solve Long-Term Issues

The following statement can be attributed to Indivar Dutta-Gupta, president and executive director of the Center for Law and Social Policy (CLASP).

Washington, D.C., May 31, 2023—This evening, the U.S. House of Representatives passed the bipartisan budget agreement by a vote of 314 to 117. This brings the United States one step closer to averting a domestic and possibly global crisis caused by breaching our arbitrary debt ceiling limit. Fortunately, the deal excludes many of the draconian budget cuts and policy changes proposed by extremists in the House Republican caucus earlier this month. But it does include several provisions that would deeply harm people struggling to make ends meet. And the measure does nothing to correct the nation’s revenue shortfall.

Notably, the bill raises the age from 49 to 54 for time limits linked to so-called work requirements in the Supplemental Nutrition Assistance Program (SNAP) among adults not raising children who need help putting food on the table. The narrowing of SNAP benefits for this age group would harm people with low incomes who have disabilities or are unpaid caregivers to loved ones by restricting their access to nutrition assistance. Our social protection system fails many people with disabilities, as well as caregivers whose work remains undervalued yet vital to our society. These provisions would increase their risk of hunger. Thankfully, the agreement includes exemptions from time limits for veterans, people who are experiencing homelessness, and young people aging out of the foster care system.

In a victory for tens of millions of Americans, the bill makes no changes to Medicaid or the president’s student debt relief measures. It does, however, amplify burdensome requirements in the Temporary Assistance to Needy Families (TANF) program, making it more difficult for some of the very lowest income families with children to receive the program’s meager but important benefits.

The bill also institutes damaging caps on non-defense, non-veterans discretionary spending for the next two years. When taken together with years of inadequate appropriations, we estimate these limits could lead to the loss of some 62,000 child care slots, undermine the enforcement of basic labor protections, and weaken public health and food safety measures, among other harmful consequences.

If extremist policymakers were serious about addressing deficits, they would look at both the expense side of the ledger, including a military budget rife with high-risk spending items, and the revenue side. Yet the bill, which focuses solely on spending—and actually reduces revenues by shrinking IRS resources to collect taxes owed by corporations and the wealthy—asks absolutely nothing of millionaires and billionaires who should contribute to reducing our national debt. As a result, the rich will get richer, and the poor will get poorer. Reducing deficits should never increase inequality.

CLASP is committed to reversing the agreement’s harmful policies.

The American people simply should have never been in this predicament in the first place. The debt ceiling is a self-imposed artificial limit on paying outstanding obligations. It overlooks this country’s unique and powerful position of issuing some of the safest investments in the world. It should be eliminated.