May 28 2023
Trump and his electoral base, the Republican Party, and powerful and wealthy supporters are systematically working to end America’s tenuous, partisan-divided democracy and replace it with a minority-controlled, right-wing rule. They are doing this from the bottom up, across local communities, in already “red” states, and all the way up to the federal government and federal judiciary.
They are accomplishing this by advancing an extreme, anti-democratic agenda, which involves suppressing the votes of opponents, fueling racism, outlawing reproductive rights of women, promoting maximum access and deregulation of guns, scapegoating immigrants trying to enter the country, separating immigrant children at the border from their parents, and supporting policies and programs that benefit the rich and powerful (e.g., low taxes, deregulation, privatization). There is more.
In true Social Darwinist fashion, they oppose social-welfare programs that benefit the poor and working- and even middle-classes. They favor banning books, encouraging parents to criticize teachers for any subject matter that makes their children “uncomfortable.” They are subverting public education generally by diverting money from public schools to school vouchers, for-profit charter schools and home-schooling. They also want to end the separation of state and religion, replacing it with Christian Nationalism. They deny or avoid the scientifically established climate emergency and want to give oil and gas mega-corporations unhindered access to public sources of such energy.
If they have their way, America will end up with something like a modern fascist, but unstable, state. That is, it will be a government dominated by the rich and powerful, particularly mega-corporations and billionaires, by the Republican Party, by Trump’s right-wing electoral base, and by the partisan Supreme Court.
Meanwhile, Trump, the Republican Party and their allies have been threatening to push the country toward economic, political, and social chaos by making demands in the present debt-limit crisis that could lead to the collapse of the economy.Trump wants the House Republicans to pass their bill and get everything they want regardless of the consequences for the domestic and global economies
(https://washingtonpost.com/politics/2023/05/24/trump-language-policy-2024-race).
It remains to be seen whether the country will experience such a calamitous outcome.
But on late May 27, 2023, President Biden and House leader Kevin McCarthy reached an agreement “in principle” that may avoid such an outcome.
The legislation will soon be voted on in the House and Senate, though it is not at all yet certain that the Party leaders in the two branches of the Congress will be able to get the votes to pass the compromised legislation in time to avoid default.
I first consider the meaning and implications of the Republican demands and then consider information on what’s in the compromised legislation designed to avoid default.
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PART 1: THE DEBT-LIMIT CRISIS
Default?
It’s meaning and potential effects
Monica Potts, a senior politics reporter at FiveThirtyEight, considers the meaning and impacts of a government default (https://fivethirtyeight.com/features/debt-ceiling-default-consequences). Here’s some of what she writes in this May 26, 2023, analysis.
“With less than a week until the U.S. runs out of cash, economists and policymakers are using words like ‘cataclysmic event’ and ‘calamity’ to describe what will happen if Congress doesn’t raise the debt limit.
“It seems bad. Economists are predicting that if the government is unable to pay its bills, it could bring much of the global financial system to a halt. But everyday people will be affected too. So who would a failure to raise the debt limit hurt first — and who would be hurt the most?
“You can think of the impact of the default as a sinkhole, pulling down the people closest to the epicenter first but spreading out to more and more people until (depending on how long it lasts) it finally engulfs the U.S. economy. The first people who are likely to be affected are those who get money directly from the government, including government employees and recipients of government direct payments, like retirees, veterans and disabled Americans who rely on social security income. Soon, though, the government’s inability to pay its bills might hit health care providers who are reimbursed through Medicare and Medicaid. Homebuyers, too, could get hit by higher interest rates, making it even more difficult for them to purchase houses in an already-competitive market. All of this adds up to a potential economic slowdown that could cause a severe recession if the crisis drags on.”
Potts elaborates on the consequences of a default.
“A lot of people rely on the government to pay its bills on time. There are almost 2 million federal government employees whose direct income could be affected. That doesn’t include the roughly 1.3 million active-duty military personnel, as of last count, and an additional 3.9 million veterans who receive disability support.
“The government could furlough or lay off workers in an effort to save money during a debt-ceiling crisis, leaving many of these people without an income. These tradeoffs could start to happen immediately, since one of the first bills that’s coming due is $12 billion in promised veterans’ benefits on June 1, and an additional $5 billion in federal salaries and insurance is scheduled to be paid out on June 9, according to an analysis by the Bipartisan Policy Center.
“Additionally, just about 66 million Americans received some form of social security benefit, like retirement or disability income, as of the end of 2022. That number included 7.6 million disabled workers who receive Social Security Disability Insurance. Federal policy already limits the ability of recipients to save, because of asset limits, and the amount of additional income allowed, so going without any one check could pose a severe hardship, said Kimberly Knackstedt, director of the Disability Economic Justice Team at the left-leaning The Century Foundation. “That sort of insecurity of, ‘Is this check that’s already not enough to get housing and food going to come this month, or is it not,’ is causing serious concern for us and for people around the country,” Knackstedt said.
“Almost 6 million people are receiving unemployment payments, too. While unemployment insurance is administered by the states, it relies on federal money that could also be disrupted, according to Bernard Yaros, an economist at Moody’s Analytics who focuses on federal fiscal policy. The government has multiple Social Security payments set throughout the month of June, according to the BPC analysis, which could be delayed.
Industries that contract with the federal government
“And it’s not just individuals who rely on government payments. Industries that contract with the federal government, like the aerospace industry and defense contractors, are vulnerable, according to Moody’s. Health care institutions could also suffer, especially small and rural hospitals, because they rely on Medicaid and Medicare payments for much of their revenue. States heavily reliant on these industries, like Virginia, could see hits to their local economy that might be bigger than the impact on the country as a whole.”
Homebuyers
“Homebuyers would also be hard hit. The housing market, walloped by dramatic ups and downs during the COVID-19 pandemic, is just reaching a tenuous stability. Mortgage interest rates remain high, which has kept some buyers out of the market, but there are just enough buyers and sellers to see some activity. That could all change with a crash, which is what might happen if large numbers of people are suddenly pushed out of the market by higher rates. Jeff Tucker, a senior economist at the real-estate marketplace Zillow, estimated that rates could go up by an additional 2 percentage points. If that happened, he said, “the housing market would get pushed down further 23 percent from … the pace we were expecting for this summer.”
“Moreover, homebuying remains an important wealth-building tool, and it’s already been a market where those looking for affordable options have struggled to gain a foothold. A longer default could mean that rates remain high for a while, making it even more difficult for non-wealthy people to buy. “I think the longer term impact there will be to widen inequality from a wealth-building perspective,” Tucker said.
“White adults are already much more likely to be able to afford a home, and the median age of first-time homebuyers is rising. A debt default crisis would make that problem worse just as a diverse generation of millennials enters prime home-buying years, he said.
The entire economy
“Then there’s the threat to the broader economy, which isn’t as direct, but is still very serious. Think about it this way: In addition to the tumult that’s likely to ensue in the financial markets, if all of the people who rely on the government for payments are suddenly struggling, then those effects will ripple out to the economy, because they and the other recipients of government payments won’t be buying goods and services to the same degree. That’s part of the reason economists warn that a debt default could create a recession, even if the crisis is short. A prolonged crisis could have severe consequences, especially because the economy is already fragile.
“Moody’s calculated the result of a short debt-ceiling breach as a 0.7 percent decline in real GDP, 1.5 million jobs lost and an unemployment rate that nears 5 percent. But a debt-ceiling breach that lasts through July would cause “economic carnage.” The Moody’s report forecasts real GDP would fall by 4.6 percent in the second half of this year, and an unemployment rate that rises to 8 percent. The downturn could have lasting effects in the form of higher interest rates and reduced growth throughout the next decade.
“In all, though, the financial credibility of the American government itself could be seriously harmed — which could have long-term economic impacts on ordinary people too. In 2011, a similar debt-ceiling fight led S&P to downgrade the U.S.’s credit rating, and something like that could happen again, costing taxpayers money. (Indeed, Fitch, a major credit-rating agency, has already issued a warning.)”
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Time is running out to avoid default
Alan Rappeport, an economic policy reporter, based in Washington, reports on a report by the Bipartisan Policy Center that the government is on the edge of defaulting on the government debt (https://nytimes.com/2023/05/23/business/debt-limit-default-xdate-report.html). He puts it this way:
“The United States faces an ‘elevated risk’ of running out of cash to pay its bills between June 2 and 13 if Congress does not raise or suspend the nation’s debt limit, according to an analysis released on Tuesday [May 23] by the Bipartisan Policy Center, an influential think tank that carefully tracks federal spending.”
“It comes amid negotiations between the White House and Republicans in Congress to reach an agreement that would also lift the $31.4 trillion borrowing cap.”
Rappeport continues.
“The center said that the Treasury Department would be operating on ‘dangerously low’ cash reserves after Memorial Day and that each day in June would come with increasing risk. The department has been using accounting maneuvers known as extraordinary measures to delay a default since the United States technically hit the debt limit in January, but those are expected to be exhausted soon.
“The center noted that the federal government could get a reprieve if it can muster sufficient revenue to make it to June 15, when quarterly tax payments are due. That could push a default, the so-called X-date, into July.
“However, Treasury Secretary Janet L. Yellen said this week that she thought it was unlikely that the federal government would have enough cash on hand to make it to mid-June.
“In a letter to Congress on Monday, Ms. Yellen reiterated her estimate that the X-date could arrive as soon as June 1 (subsequently, moved to June 5). Her warning did not come with the caveats included in her previous updates, which had suggested that the government’s cash reserves could potentially last for a few additional weeks. Instead, she emphasized the urgency of the situation.
“‘If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position and raise questions about our ability to defend our national security interests,’ Ms. Yellen said.”
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House Republicans believe they have an advantage in the negotiations over the debt-ceiling crisis
Jake Johnson reports on May 24, 2023, that Matt Gaetz has publicly confirmed that Republicans view the US Economy as “Our Hostage” (https://commondreams.org/news/matt-gaetz-debt-ceiling-hostage). He makes his point as follows.
“Through their actions in recent months, House Republicans have made clear that they view the debt ceiling standoff as a hostage situation that they can exploit to advance their political agenda—which includes draconian cuts to social programs and massive handouts to the fossil fuel industry.
On Tuesday, just days before the June 1 “X-date,” Rep. Matt Gaetz (R-Fla.) came right out and admitted it, telling reporters that “my conservative colleagues for the most part support Limit, Save, Grow, and they don’t feel like we should negotiate with our hostage.”
Semafor‘s Joseph Zeballos-Roig published audio of Gaetz’s comments on Twitter:
The Limit, Save, Grow Act is legislation that Republicans passed in a party-line vote last month, staking out their position that the debt ceiling shouldn’t be raised unless rich tax cheats are protected and an axe is taken to spending on federal nutrition assistance, Medicaid, affordable housing, childcare, and other key programs.
“The House GOP, officially led by Speaker Kevin McCarthy (R-Calif.) but heavily influenced by the far-right Freedom Caucus, has held to that position, threatening to force a debt default and unleash global economic chaos unless their demands are met.
“Gaetz, a member of the House Freedom Caucus, suggested Tuesday that the deal McCarthy struck with his far-right flank to secure the speakership—specifically the rule allowing just one lawmaker to call a vote to unseat the speaker—has kept the Republican leader committed to debt ceiling brinkmanship.”
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Examples of what House Republicans have demanded
McCarthy wants to reduce government spending, without any tax increases or limits on the military budget
McCarthy insists that the debt limit crisis can be resolved by reducing spending, with the exception of military spending. He and his Republican conference oppose any increases in federal taxes – indeed want cuts – but favor large increases in military spending. He and his supporters seem to think that Biden and House (and Senate) Democrats will ultimately concede to Republican demands rather than see the federal government defaulting on the national debt.
On taxes, Peter Certo reports on May 25, 2023, that previous tax cuts are a major contributor to the mounting national debt, followed by bipartisan military spending (https://commondreams.org/opinion/gop-does-not-care-about-national-debt).
Republicans want more tax cuts
Despite this history and current turmoil over the debt-limit, the Republicans plan to “Unveil Deficit-Exploding Tax Cuts for the Rich Two Weeks After Debt Limit X-Date,” according to Jake Johnson (https://commondreams.org/news/gop-tax-cuts-debt-limit). He reports in this May 24, 2023 story that
“With the U.S. careening toward a default crisis that they manufactured, House Republicans are reportedly crafting a major tax cut package that would overwhelmingly benefit the rich and corporations while blowing a multitrillion-dollar hole in the federal deficit.
“The fresh push for tax cuts, according to Rep. Ilhan Omar (D-Minn.), further shows that ‘this hostage crisis has never been about deficits for the GOP.’
“‘It has always been about wealth transfer—taking away food and healthcare from the poor and middle class to give away $3 trillion more in tax cuts to their rich friends,’ Omar, the deputy chair of the Congressional Progressive Caucus, tweeted Tuesday [May 23, 2023].
“Politico reported earlier this week that Republicans on the House Ways and Means Committee hope to finish work on their emerging tax legislation by June 16, just over two weeks after the so-called “X-date’—the day on which the Treasury Department expects the federal government to run out of money to cover its obligations unless Congress raises the debt limit or President Joe Biden acts unilaterally
In a May 22, 2023, article, Sasha Abramsky posits that “The GOP Would Rather Hold Hungry Families Hostage Than Tax the Wealthy” (https://truthout.org/articles/the-gop-would-rather-hold-hungry-families-hostage-than-tax-the-wealthy).
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Military spending – off limits
In a May 24, 2023, article, Brett Wilkins cites a report showing how $1.1 trillion in annual US militarized spending is “crushing society” (https://commondreams.org/news/us-military-spending).
“As the United States barrels headlong toward a possible historic debt default, a report published Wednesday highlights that the majority of this year’s federal discretionary funds were used for militarized programs, while urging the U.S. government to re-prioritize spending to serve human needs instead of the mechanisms and machinery of violence.
“The report—entitled The Warfare State: How Funding for Militarism Compromises Our Welfare—was published by the Institute for Policy Studies’ National Priorities Project (NPP), which aims to inspire people and movements ‘to take action so our federal resources prioritize peace, shared prosperity, and economic security for all.’
“Our country’s economy faces a dire threat from so-called ‘fiscal conservatives,’ including the present GOP House majority, who have resorted to dangerous brinkmanship to force deep cuts in the federal discretionary budget,” the report states, referring to what critics and even one congressional Republican have called called ‘hostage-taking’ over the ‘debt ceiling’.
“‘The discretionary budget contains the Pentagon budget as well as a number of other broadly militarized line items, including nuclear weapons, federal immigration enforcement, law enforcement, prisons, and so on,’ the paper continues. ‘That same budget also hosts most social programs outside of Social Security, Medicare, Medicaid, and [the Supplemental Nutritional Assistance Program]. It includes federal jobs programs, education, scientific research, and the like.”
“‘The militarized portion of this budget is by far its largest single component,’ the report stresses. ‘And yet the same legislators demanding billions in discretionary savings have vowed to exempt that militarized spending from any cuts. Instead, they’ve targeted the much smaller portion that funds human and community needs for even deeper cuts.”
For fiscal year 2023, that militarized portion amounts to $1.1 trillion, or 62% of the $1.8 trillion federal discretionary budget. That leaves less than 40% of funds for investments in human needs like housing, education, childcare programs, disaster relief, the environment, and scientific research.
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House Republicans could care less about the poor and lower-income Americans
Yes, poverty is a problem in the US
This question is addressed in recently published books on poverty. Mark Rank, distinguished professor of social welfare at Washington University in St. Louis, is the author of one of the books, The Poverty Paradox: Understanding Economic Hardship Amid American Prosperity (publ. 2023). His research finds tens of millions of people in poverty, based on estimates for 2021. Rank writes:
“For 2021, 11.6% of the population fell below the official poverty line, representing 37.9 million individuals; 19.4% [63.8 million] experienced poverty or near-poverty; and 5.5% were living in extreme poverty” [50% or less of the official poverty line, including 18.2 million individuals] (pp. 14-15).
Most Americans will experience poverty sometime or many times during their lives. According to Rank,
“Results indicate that between the ages of 20 and 75, nearly 60% of Americans will experience at least 1 year below the official poverty line, while three-quarters of Americans will encounter poverty or near poverty (150% below the official poverty line).” He continues: “Between the ages of 20 and 35, 31.4% will have experienced poverty; by age 55, 45.0%; and by age 75, 58.5%. Similarly, 76.0 percent of the population will have spent at least 1 year below 150% of the official poverty line by the time they reach age 75” (pp. 109-110).
Poverty is typically a great, overwhelming burden on the poor and near-poor
Sociologist Matthew Desmond covers much of the same ground as Rank does in his recent book, Poverty in America (publ. 2023). He has an interesting analysis of the specific impacts that poverty has on poor and near-poor people. They have too little income or regular income, either from work or social/welfare programs, to pay for basic needs. But poverty is about more than inadequate income.
Physical pain
-They suffer physical pain or injuries from the work they do. For example, back pain from working as home health aides and certified nursing assistants, amputations in meatpacking plants.
-The adversities of living in slum housing, with the spread of asthma “from mold and cockroach allergens seeping into young lungs and airways,” lead poisoning….”
-“Roughly one in four children living in poverty have untreated cavities, which can morph into tooth decay, causing sharp pain and spreading infection to their faces and even brains” (pp. 13-14).
Trouble finding safe and affordable housing
-“Most renting families below the poverty line now spend at least half of their income on housing, with one in four spending more than 70 percent on rent and utility costs alone.” Evictions are common: “More than 3.6 million eviction filings are taped to doors or handed to occupants in an average year in America….” (p. 15).
Employment is unstable
-“Half of all new positions are eliminated within the first year. Jobs that used to come with guarantees, even union membership, have been transformed into gigs.” For example: “Temp workers are not just found driving Ubers; they are in hospitals and universities and insurance companies.” There are more than a million temp workers in manufacturing. Additionally, “America has welcomed the rise of bad jobs at the bottom of the market – jobs offering low pay, no benefits, and few guarantees” (p. 16)
Living in constant “fear” of being unable to pay the bills
-“A third of Americans live without much economic security, working as bus drivers, farmers, teachers, cashiers, cooks, nurses, security guards, social workers” (p. 17).
Living far below the poverty line
-“According to the latest national data, one in eighteen people in the United States lives in ‘deep poverty,’ that is, with income less than half the poverty line. In 2020, “almost 18 million people in America survived under these conditions.”
The Loss of Liberty
-“Almost 2 million people sit in our prisons and jails each day. Another 3.7 million are on probation or parole.” The “overwhelming major of America’s current and former prisoners are very poor” (p. 18). Those in prison are not counted in the official poverty estimates.
Feeling the government is against you
-“In recent years, up to one in twelve people killed by a gun in the United States have been killed by a police officer.”
Income is taken by the state
-“…in the form of misdemeanor charges and citations; the price paid for missing a child support payment, jumping a subway turnstile, getting caught with a joint….Criminal justice agencies levy steep fines and fees on the poor, often making them pay for their own prosecution and incarceration. When payments are missed, courts issue warrants, mobilize private bill collectors, and even incarcerate as retribution” (pp. 19-20)
Poverty is shame inducing
-“You avoid public places – parks, beaches, shopping districts, sporting arenas – knowing they weren’t built for you.”
Poverty is diminished life and personhood
-“It shrinks the mental energy you can dedicate to decisions, forcing you to focus on the latest stressor – an overdue gas bill, a lost job – at the expense of everything else.”
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Work requirements
What Republican Work Requirements in the Debt Ceiling Bill Would Do
Nik Popli reports for Time magazine on May 1, 2023, on how the House Republicans are pushing for a debt ceiling bill that would “enact new work requirements for those seeking federal assistance, claiming the measure would help cut federal spending” (https://time.com/6276193/republicans-work-requirements-debt-ceiling). Here’s some of what Popli writes.
“Although the bill is unlikely to become law, it would require millions of low-income Americans who receive food stamps and health insurance from the federal government to work longer hours in order to qualify for benefits.”
“House Republicans say that the work requirements would reduce government spending and increase employment, but some economists are skeptical that they will result in significant savings for the federal government. ‘It’s going to cost a ton of money to implement these work requirements,’ says Lily Roberts, acting vice president for inclusive economy at the Center for American Progress, a left-leaning policy institute. ‘They are going to have to hire hundreds of bureaucrats to manage the process of documenting all of those work requirements now.”
“The Congressional Budget Office (CBO), a nonpartisan agency, said last week that the stricter work requirements proposed by the House GOP would reduce federal spending by $120 billion over the next decade, a small portion of the roughly $4.8 trillion in savings the bill would generate. About 600,000 Americans would lose health insurance, while about 275,000 Americans a month would lose access to food stamps, the CBO said.
“Under the GOP package, childless, able-bodied adults ages 18 to 55 could get food stamps for only three months out of every three years unless they are employed at least 20 hours a week or meet other criteria. Currently, that mandate applies to those ages 18 to 49, though it has been suspended during the COVID-19 public health emergency.
“The Republican debt ceiling package would also require certain adult Medicaid recipients to work, perform community service, or participate in an employment program for at least 80 hours per month or earn a certain minimum monthly income. It would apply to those ages 19 to 55, but not those who are pregnant, parents of dependent children, those who are physically or mentally unfit for employment or enrolled in education or in substance abuse programs, among other exceptions.
“For many Americans, the new work requirements ‘could make the situation worse,’ says Claudia Sahm, an economist and senior fellow at the Jain Family Institute. ‘The people who would lose their benefits because of a work requirement are some of the most vulnerable adults,’ she says. ‘It’s often homeless people who weren’t working before, or people who’ve faced serious barriers to work that are the ones that will lose their benefits.’”
“Even if work requirements for federal aid do not make it in the final debt limit bill, Republicans are likely to keep pushing the issue, says Matt Weidinger, a senior fellow at the right-leaning American Enterprise Institute. ‘I have no doubt this will come up again in future debt limit bills or reauthorization bills,’ he says. ‘The federal government is going to be searching for ways to come up with policies that cut the costs of some of these programs.’
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PART 2: The “compromise”
White House and G.O.P. Strike Debt Limit Deal to Avert Default
Jim Tankersley, Catie Edmondson, and Luke Broadwater report on a tentative deal between Biden and McCarthy to avoid a government budget default (https://nytimes.com/2023/05/27/us/politics/debt-ceiling-deal.html). They write “negotiators sealed an agreement to raise the debt ceiling for two years while cutting and capping certain federal programs.” The compromise would “effectively freeze federal spending that had been on track to grow.” However, they still must obtain enough votes in both the House and Senate to finalize the deal.
Top of Form
Bottom of Form
“Congressional passage of the plan before June 5, when the Treasury is projected to exhaust its ability to pay its obligations, is not assured, particularly in the House, which plans to consider it on Wednesday [May 31, 2023]. Republicans hold a narrow majority in the chamber, and right-wing lawmakers who had demanded significantly larger budget cuts in exchange for lifting the borrowing limit were already in revolt.”
They quote Biden.
“‘It is an important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone,’ Mr. Biden said. ‘And the agreement protects my and congressional Democrats’ key priorities and legislative accomplishments. The agreement represents a compromise, which means not everyone gets what they want.”
Then McCarthy:
“In a nighttime news conference outside his Capitol office that lasted just one minute, Mr. McCarthy said the deal contained ‘historic reductions in spending, consequential reforms that will lift people out of poverty into the work force, rein in government overreach’ and would add no new taxes. He declined to answer questions or provide specifics, but said he planned to release legislative text on Sunday.”
“The deal would suspend the borrowing limit, which is currently $31.4 trillion, for two years — enough to get past the next presidential election.”
The tentative agreement “gives Republicans the ability to say that they succeeded in reducing some federal spending — even as funding for the military and veterans’ programs would continue to grow — while allowing Democrats to say they spared most domestic programs from significant cuts.”
“The deal would impose caps on discretionary spending for two years, though those caps would apply differently to spending on the military than to the rest of the federal budget. Spending on the military would grow next year, as would spending on some veterans’ care. Spending on other domestic programs would fall slightly — or stay roughly flat — compared with this year’s levels.”
McCarthy got “new work requirements for some recipients of government aid, including food stamps and the Temporary Assistance for Needy Families program. It would place new limits on how long certain recipients of food stamps — people under the age of 54, who do not have children — could benefit from the program. But it also would expand food stamp access for veterans and the homeless….”
“The tentative deal also claws back some unspent money from a previous pandemic relief bill, and reduces by $10 billion — to $70 billion from $80 billion — new enforcement funding for the I.R.S. to crack down on tax cheats. It includes measures meant to speed environmental reviews of certain energy projects and a provision meant to force the president to find budget savings to offset the costs of a unilateral action, like forgiving student loans — though administration officials could circumvent that requirement. It also includes an enforcement measure that is meant to avert a government shutdown later this year.”
A positive vote is not guaranteed
“Mr. McCarthy has repeatedly said he believes a majority of his conference would vote for the deal, but it is not clear yet how many Republicans will back the compromise — and how many Democrats might be needed to vote for it to make up for G.O.P. defections.
“The path also is likely to be rocky in the Senate, where quick action requires bipartisan support and conservatives have signaled they are unwilling to go along.
In a sign of their displeasure, House Freedom Caucus members were huddling to identify procedural tools to delay passage of the agreement or make the bill more conservative.” They want greater spending cuts.
At the same time, “the Congressional Progressive Caucus had already begun to fume about it even before negotiators finalized the agreement.” Progressive Democratic groups are unhappy with the proposed compromise bill. “Lindsay Owens, the executive director of the liberal Groundwork Collaborative in Washington, criticized the deal for forcing budget cuts in domestic programs — and in particular, for reducing enforcement money for the I.R.S.”
Jake Johnson adds to the reporting on the Biden-McCarthy compromise agreement (https://commondreams.org/news/progressives-blast-debt-ceiling-deal).
“Progressive economists and advocates warned that the tentative debt ceiling agreement reached Saturday by the White House and Republican leaders would needlessly gash nutrition aid, rental assistance, education programs, and more—all while making it easier for the wealthy to avoid taxes.”
It “includes two years of caps on non-military federal spending, sparing a Pentagon budget replete with staggering waste and abuse.” According to the agreement, non-military spending would be kept flat for 2024 and increased by 1% for 2025, thus “not keeping pace with inflation.”
“After inflation eats its share, flat funding will result in fewer households accessing rental assistance, fewer kids in Head Start, and fewer services for seniors,” said Owens. “The deal represents the worst of conservative budget ideology; it cuts investments in workers and families, adds onerous and wasteful new hurdles for families in need of support, and protects the wealthiest Americans and biggest corporations from paying their fair share in taxes.”
“The agreement would also impose new work requirements on some recipients of Supplemental Nutrition Assistance Program (SNAP) benefits and Temporary Assistance for Needy Families (TANF) while scaling back recently approved IRS funding, a gift to rich tax cheats.” Work requirements would become more stringent for SNAP recipients. Johnson writes: “the deal would reportedly impose work requirements on adult SNAP recipients without dependents up to the age of 54, increasing the current age limit of 49. Policy analysts and anti-hunger activists have long decried SNAP time limits and work requirements as cruel and ineffective at boosting employment. (Most adult SNAP recipients already work.)”
Johnson quotes Angela Hanks, chief of programs at Demos, who said: “For no real reason at all, hungry people are set to lose food while tax cheats get a free pass.”
In addition, “The White House and Republican leaders also reportedly agreed to some permitting reforms that climate groups have slammed as a boon for the fossil fuel industry. According to The New York Times, the agreement ‘includes measures meant to speed environmental reviews of certain energy projects,’ though the scope of the changes is not yet clear.”
“And while the deal doesn’t appear to include a repeal of Biden’s student debt cancellation plan—which is currently before the U.S. Supreme Court—it does reportedly contain a provision that would cement the end of the student loan repayment pause, drawing fury from debt relief campaigners.”
“Amy Hanauer, executive director of the Institute on Taxation and Economic Policy, said Sunday that “it’s a relief to see that congressional leaders and the president have come to an agreement to raise the debt limit and avert an economic disaster.”
“‘But by instituting work requirements for critical assistance programs and rescinding important funding to crack down on wealthy tax cheats, this deal will rig the economy even more in favor of the most well-off Americans while failing to fix the real structural problems that led to the current debt crisis in the first place,’ said Hanauer. ‘The deal avoids the elephant in the room: it includes no new revenues even though tax cuts of the past few decades were a primary driver of deficit growth.’”
Concluding thoughts
The debt-ceiling crisis was unnecessary, though the rising national debt needs to be addressed. But the remedy should not be on the backs of poor and lower-income Americans, as the compromise agreement suggests. From what we know about it, it will limit access to and the benefits of programs aimed at assisting the poor and students with educational debt. The outcome will be more hardship and more inequality. Oil and gas corporations will benefit from accelerated permitting processes, disregarding the existential climate crisis. The wealth and income of high-income people will remain untouched and un-audited. The increasingly radicalized Republican Party will continue raising havoc and pushing for budgets that spur increasing inequality and misery, while also engaging in voter suppression and efforts to subvert elections.
Vital issues - challenging pol and econ power 