The GOP’s Devastating Debt Ceiling Bill

The GOP's Devastating Debt Ceiling Bill

JoAnn Goedert, Ignatian Volunteer Corp Member
Government Relations Special Contributor
May 4, 2023

Last week, the Republican majority in the House of Representatives passed a bill to hold the current debt ceiling crisis hostage unless the White House and Senate agree to 10 years of devastating budget reductions and major structural changes to SNAP, TANF, and Medicaid. The bill, the Limit, Save, Grow Act of 2023 (H.R. 2811), would cut deeply into the most basic supports for our most vulnerable individuals and families and undermine many other programs that protect their health, safety and security now and in the future.

Senate Majority Leader Schumer (D-NY) has already declared the bill dead on arrival. However, we must redouble our efforts to push back. It cannot become the basis for negotiations. The five-vote majority the House Republican Conference has does not give them the mandate from the voters to destroy President Biden’s policy agenda.

While increasing the debt ceiling for just one year, the bill demands 10 years of severe funding caps that deepen over time on non-mandatory, or discretionary, federal funding. Those caps are based on a deceptive formula that would hold total discretionary funding for the FY 2024 to FY 2022 levels — but it exempts defense spending. The GOP budget calls for $1.47 trillion in total discretionary spending in FY 2024, while insulating more than half of that amount — $885 billion in defense appropriations from any cuts, according to the Office of Management and Budget. That means that only $586 billion would be left for all other spending for health, education, housing, hunger prevention, the protection of environmental, nuclear, food and drug safety, and other key programs — a full 22% cut from current levels of $756 billion.

Overwhelmingly, the burdens of these cuts would be borne by individuals, families, and children living at or near poverty. Here are the facts of the impact of 22% reductions in some of the critical programs targeted for cuts: 

  • 1.7 million women, infants and children who would lose needed nutrition support under the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)
  • More than a million elderly individuals now served by Senior Healthy Meals programs like Meals on Wheels
  • Over 630,000 household who could face eviction and homelessness, including nearly 250,000 households headed by seniors or veterans, with slashed funding to Housing Choice Vouchers
  • Veterans who will face deep cuts in Veterans Health Administration outpatient care, and mental health and substance abuse treatment, resulting in 30 million fewer outpatient services.
  • Nearly 400,000 preschool children who will lose Head Start and early childcare services
  • 25 million children in schools that serve low-income students and 7.5 million students with disabilities who will suffer the effects of reduced services and staff
  • Approximately 1,150,000 households in the Low Income Home Energy Assistance Program to who will struggle to keep their homes heated.

The GOP bill also doubles down on strict work requirements already in place for the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) and imposes new, onerous work requirements for Medicaid. Congress has tried this bureaucratic proposal to reduce the number of eligible Medicaid recipients. Evidence has shown that such unreasonable work requirements do not improve employment stability or living wages, and instead would hit hardest against older workers, veterans, and others with serious health conditions, caregivers for young children and the elderly, and millions of workers in the gig economy.

Under the McCarthy bill, more than 10 million people in Medicaid expansion states would be at significant risk of having their health coverage taken away because they would be subject to the new requirements and could not be excluded automatically based on existing data readily available to states.

Extending this failed policy to older adults will result in more people losing basic food assistance. About a million such individuals participated in SNAP and met the criteria in the McCarthy proposal in a typical month of 2019, which is the most recent year for which a full year of data are available.

For all of us, especially those living in already vulnerable, underserved communities, the GOP bill would eviscerate crucial health, safety, and security safeguards, both immediately and for generations to come. Just some of the protections that would be threatened by a 22% funding reduction are:

  • Rail safety inspections that could prevent further hazardous waste derailments would be cut by 30,000 fewer miles of inspected track annually
  • Suicide Lifeline service reductions that would eliminate 900,000 potentially lifesaving contacts a year.
  • Food and drug safety inspections that would lose more than $500 million and jeopardize the safety of the nation’s food and medication supplies
  • FEMA’s ability to respond to natural disasters with a decrease of $2.5 billion at the same time that climate-change related floods, tornadoes, and fires are on the increase.
  • Clean energy tax and other incentives already passed by Congress that would be repealed, only to plunge the nation into a deeper environmental crisis whose harms are already disproportionately borne by black and brown communities.

At the same time that GOP House bill demands massive cuts targeting the most vulnerable in our society, it would erode the Biden Administration’s FY 2024 deficit reductions by substantially decreasing IRS funding intended to root out tax fraud by the wealthy. McCarthy’s bill would rescind nearly all of the $80 billion in IRS funding that was included in the Inflation Reduction Act to bolster IRS enforcement capacity, rebuild the agency’s aging technology, and improve customer service. CBO has estimated that this would add $114 billion to the deficit over the next decade because the reduced funding would mean the IRS could do less to enforce our tax laws and ensure that wealthy households pay the taxes they owe.

GOP leaders further threaten the U.S. economy with proposals to continue the Trump tax cuts for wealthy individuals and corporations and even further reward large corporations with more and more tax windfalls. Under new House rules, tax cuts are not scored towards the deficit. Making the expiring tax cuts permanent would give a roughly $49,000 annual tax cut to the top 1 percent, while new or expanded work-reporting requirements target people with incomes below the poverty line, or about $15,000 for a single individual.

In the end, when the GOP debt ceiling bill is scrutinized carefully, what is left is nothing more than a reckless and immoral scheme that risks the nation’s economic security and the social safety net by putting impossible burdens on the backs of the individuals and families in or near poverty due to low wages, disability, and poor health, and unmet child care needs—solely to benefit the rich. The House Republican Conference’s Limit, Save, Grow Act of 2023 eliminated years of improvements to America’s social contract.

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