{"id":1140,"date":"2023-06-06T21:34:04","date_gmt":"2023-06-07T03:34:04","guid":{"rendered":"https:\/\/sinmurosnewscalifornia.com\/?p=1140"},"modified":"2023-06-06T21:34:04","modified_gmt":"2023-06-07T03:34:04","slug":"debt-ceiling-deal-averts-default-with-poor-and-elderly-paying-the-price","status":"publish","type":"post","link":"https:\/\/sinmurosnewscalifornia.com\/?p=1140","title":{"rendered":"Debt Ceiling Deal Averts Default, With Poor and Elderly Paying the Price"},"content":{"rendered":"
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\"\"By<\/span> Peter White<\/a><\/div>\n<\/div>\n<\/div>\n
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Held for ransom by Republicans, the debt ceiling deal Biden signed Saturday leaves those on the lower rungs with less support even as the nation\u2019s debt continues to mount.<\/p>\n<\/div>\n<\/div>\n

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The debt ceiling deal brokered last week between Democrats and Republicans staved off potential economic disaster. But experts say the bill will have long-term consequences for those on the lower rungs of the economic ladder.<\/p>\n

There is also growing concern about the nation\u2019s mounting debt and what that means for the many federal programs that millions rely on.<\/p>\n

\u201cWe know those effects would have been felt deeply, very deeply by people who are the least economically secure,\u201d says Shannon Buckingham, Senior Vice president at the Center on Budget and Policy Priorities, speaking about the potential consequences of a default.<\/p>\n

\u201cSixty-five million Social Security beneficiaries could have seen their benefits delayed, six million veterans and their survivors could have had their benefits held up. Families could have seen their monthly rental assistance, food assistance, childcare delayed,\u201d Buckingham said.<\/p>\n

Without a deal we could have seen a loss of 7-8 million jobs and a spike in unemployment. Buckingham spoke with reporters Friday during an Ethnic Media Services press briefing<\/a>, one day ahead of President Biden signing the deal, extending the debt limit through 2025 and ensuring the US avoids a first-ever default.<\/p>\n

Increased hunger, poverty for older adults<\/h2>\n
\"\"Shannon Buckingham, Senior Vice President for Communications and Senior Counselor, Center on Budget and Policy Priorities, explains how the new work requirement for older adults on the Supplemental Nutrition Assistance Program puts these recipients at risk.<\/em><\/figcaption><\/figure>\n

Buckingham called out Republicans for using the debt ceiling as a hostage to force deeply unpopular and harmful policies that they could not pass when they held full control of Congress.<\/p>\n

\u201cWe saw the extreme nature of their demands in the bill that (the Republican-controlled House) passed a few weeks ago. Fortunately, the ultimate agreement that was reached avoided much of the damage that that bill would have inflicted,\u201d she said.<\/p>\n

The bipartisan deal, which passed despite resistance from far-right GOP lawmakers in the House, has some bad news for people who struggle to make ends meet. For example, a work reporting requirement for low-income older adults who receive SNAP benefits will increase hunger and poverty for people, age 50-54. Buckingham said many people in that age group are in poor health and can no longer do the physically demanding jobs they once held. \u201cAnd so many will lose the basic assistance that they count on to buy groceries,\u201d she says.<\/p>\n

People can get a medical waiver, but the process is notoriously laden with red tape and just doesn\u2019t work, Buckingham added.<\/p>\n

\u201cWe applaud Congress\u2019s willingness to avoid default,\u201d says Rachel Snyderman, Senior Associate Director of business and economic policy for the Bipartisan Policy Center in Washington.<\/p>\n

The deal targets discretionary spending \u2013 about one quarter of the federal budget \u2013 and Snyderman says we have seen political brinkmanship surrounding the debt limit intensify in the last decade.<\/p>\n

\u201cWe\u2019ve started to see the debt limit be kind of a hostage-taking device. It\u2019s the only time when both parties come together to have fruitful, meaningful discussions about fiscal policy,\u201d she says.<\/p>\n

\u2018Time to act\u2019 on debt<\/h2>\n
\"\"Rachel Snyderman, Senior Associate Director, Business and Economic Policy, Bipartisan Policy Center, says the debt ceiling does not address the need for revenue beyond cutting taxes.<\/em><\/figcaption><\/figure>\n

\u201cThe interest on our debt is going to outpace our spending on Medicaid next year. It\u2019s going to become the largest federal expenditure within the next 30 years,\u201d Snyderman warned.<\/p>\n

She then listed things the government won\u2019t have money to pay for when interest payments become the nation\u2019s largest expense. They include critical social programs that millions of American families rely on, spending for defense in our military, and foreign aid investments in clean energy, and education.<\/p>\n

\u201cIt\u2019s time to act now,\u201d she says.<\/p>\n

The national debt of $31 trillion amounts to about one third of the total sovereign-debt market.<\/p>\n

\u201cBefore we\u2019re even talking about default, we\u2019re seeing a reflection of increased risk aversion among global investors holding and buying our debt,\u201d says Snyderman.<\/p>\n

Increased yields that investors demand on treasury notes only drive up our costs to borrow, but those are then paid for by taxpayers. If we were to default, there would likely be a rapid decrease in demand for US securities and negative shocks to\u00a0economies around the world.<\/p>\n

Two years from now Republicans could force another game of political brinkmanship to cut back social programs like Social Security and Medicare.<\/p>\n

Eliminating the debt ceiling<\/h2>\n

Could the debt limit be suspended for a longer period of time or eliminated altogether?<\/p>\n

\u201cThe answer is absolutely one hundred percent,\u201d says Lindsay Owens, Executive Director of the Groundwork Collaborative, a left-leaning think tank in Washington.<\/p>\n

\u201cThere is no sort of glory in the fact that it is bipartisan. You know, we should not be in a position where the American government is getting within a week of defaulting on its obligations.\u201d<\/p>\n

Owens stressed that the debt ceiling isn\u2019t about future spending. It\u2019s about paying bills on spending that\u2019s already been incurred.<\/p>\n

\u201cSo, this lifting the debt ceiling has absolutely no bearing on fiscal matters moving forward,\u201d she says. As a structural matter, the budget and talking about fiscal matters is mostly unrelated to the debt ceiling, she says.<\/p>\n

\u201cIt\u2019s because a contingent of Republicans in Congress insisted on tying a budget fight to the debt ceiling elimination, right? So, the pairing of these two things is strictly artificial and strictly a political construction, not a requirement of lifting the debt ceiling.\u201d<\/p>\n

\"\"Reducing the newly approved IRS budget will deprive the agency of the staff and technology it badly needs to crack down on tax evasion and ultimately cost the U.S. millions of dollars, says Lindsay Owens, Ph.D., Executive Director, Groundwork Collaborative.<\/em><\/figcaption><\/figure>\n

Getting our fiscal house in order<\/h2>\n

The IRS budget cuts of $21.4 billion over ten years included in the bill actually results in a net increase to the deficit, Owens says.<\/p>\n

\u201cThat\u2019s because it results in foregone revenue collection by the IRS. So that\u2019s just a really important piece of the deal,\u201d she says.<\/p>\n

The deal freezes discretionary funding for one year and increases it by 1% in the second year. But if you consider inflation is running about 5%, Owens says it means less housing assistance, fewer slots for toddlers to go to Head Start, less services for seniors, and the like.<\/p>\n

Denmark does a better job than the U.S. handling its debt, Owens notes, adding that while these are politically motivated discussions, there is a way forward. \u201cWe have to have the political courage to get our fiscal house in order.\u201d<\/p>\n

While we fault other countries for their sluggish economies, the U.S. continues to live beyond its means.<\/p>\n

\u201cAs the world\u2019s strongest economy, we\u2019re leaving default on the table for purely political reasons, not because we don\u2019t have access to the to capital markets, which differentiates us from the crises that we\u2019ve seen in Greece and Argentina and Venezuela, for example,\u201d Owen says.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Peter White Jun 6, 2023 Held for ransom by Republicans, the debt ceiling deal…<\/p>\n","protected":false},"author":3,"featured_media":1137,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[],"class_list":["post-1140","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-englishreports"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/i0.wp.com\/sinmurosnewscalifornia.com\/wp-content\/uploads\/2023\/06\/Screenshot_20230606_200946_Adblock-Browser-1.jpg?fit=1080%2C572&ssl=1","_links":{"self":[{"href":"https:\/\/sinmurosnewscalifornia.com\/index.php?rest_route=\/wp\/v2\/posts\/1140","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sinmurosnewscalifornia.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sinmurosnewscalifornia.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sinmurosnewscalifornia.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/sinmurosnewscalifornia.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1140"}],"version-history":[{"count":1,"href":"https:\/\/sinmurosnewscalifornia.com\/index.php?rest_route=\/wp\/v2\/posts\/1140\/revisions"}],"predecessor-version":[{"id":1141,"href":"https:\/\/sinmurosnewscalifornia.com\/index.php?rest_route=\/wp\/v2\/posts\/1140\/revisions\/1141"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sinmurosnewscalifornia.com\/index.php?rest_route=\/wp\/v2\/media\/1137"}],"wp:attachment":[{"href":"https:\/\/sinmurosnewscalifornia.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1140"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sinmurosnewscalifornia.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1140"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sinmurosnewscalifornia.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1140"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}