Debt ceiling tussle was ‘a supreme waste of time’
Biden and McCarthy are each likely to claim victory, but it’s clear the poor lose.
No one should be surprised that the resolution of our most moronic fiscal policy, the federal debt ceiling, involved our stupidest social policy, work requirements for assistance programs.
But that appears to be the case. In negotiations between the Biden White House and House Speaker Kevin McCarthy’s Republican caucus, one of the last sticking points was whether, and by how much, to tighten work requirements for food stamps and welfare.
In coming days, as Congress moves toward votes on the deal, political commentators will thoroughly masticate the question of whether President Biden or McCarthy (R-Bakersfield) prevailed in this deal-making and which of them will be hurt or harmed politically by the outcome.
That’s not a very interesting parlor game. (Personally, I’d go with the judgment of Timothy Noah of the New Republic, who thinks Biden emerges as the political victor and McCarthy’s days as speaker are numbered, thanks to the choler of his far-right wing.)
More important is what the deal says about the principles of both camps. The granular details of the agreement were still murky Sunday, and it could still collapse because of objections from congressional Republicans or Democrats.
The deal, as reported, freezes discretionary federal spending — that is, most of the programs for which Americans depend on the federal government — at current levels for the next two years, with increases lower than inflation. That means an effective budget cut, relative to inflation. In return, the debt ceiling is suspended for two years.
But Biden managed to preserve the accomplishments of his presidency thus far from the GOP’s knives. He fended off their efforts to torpedo the support for renewable energy in last year’s Inflation Reduction Act, their harshest proposed budget cuts, the rollback of student debt relief, and repeal of his budget increase for the Internal Revenue Service.
(Reports say that $10 billion will be shaved off the $80-billion 10-year IRS budget increase, but the money can be redirected to other programs.)
Biden rejected Republican demands to impose work requirements on Medicaid, but allowed some tightening of the rules for food stamps — the Supplemental Nutrition Assistance Program, or SNAP, and Temporary Assistance for Needy Families, or TANF, which is what’s left of traditional welfare.
Make no mistake: No rich American will be harmed even a bit by this deal. Some may even be advantaged, if the carve-out from the IRS budget comes from the agency’s enforcement efforts; that would help the rich, who are the nation’s worst tax cheats.
The most vulnerable Americans, however, will bear the brunt of the deal points. Let’s take a look.
Start with work requirements. As I’ve reported ad infinitum over the years, work requirements on safety net programs accomplish nothing in terms of pushing their beneficiaries into the job market.
They are, however, very effective at throwing people off those programs; that’s what happened in Arkansas, where 17,000 people lost Medicaid benefits in 2019 after only six months of a limited rollout of work rules. A federal judge then blocked the changes.
The debt ceiling deal will tighten work requirements for SNAP by requiring ablebodied, childless low-income adults younger than 55 to work 20 hours a week or be engaged in job training or job searches. If they don’t meet that standard, their SNAP benefits end after three months. Current law applies to those adults only up to the age of 49. The change will expire in 2030.
This rule will do virtually nothing to reduce federal spending, which Republicans say has been the whole point of holding the debt ceiling hostage. The Congressional Budget Office estimated in April that the change would reduce federal spending by $11 billion over 10 years, or $1.1 billion a year.
By my calculation, that comes to 17 thousandths of a percent of the federal budget, which this year is $6.4 trillion.
If it’s scarcely a rounding error in federal accounts, however, it’s crucial to the recipients of food aid. The CBO estimated that about 275,000 people would lose benefits each month because they failed to meet the requirement.
Biden’s negotiators did get the Republicans to waive SNAP rules for veterans and the homeless, which will probably lower that figure and limit the reduction of federal spending.
Work requirements for safety net programs have been a Republican hobby horse for decades. It’s based on the Republican image of low-income Americans as layabouts and grifters — the “undeserving poor.”
Sure enough, Rep. Garret Graves (R-La.), one of McCarthy’s debt ceiling negotiators, couldn’t resist slandering this vulnerable population during the talks. “Democrats right now are willing to default on the debt so they can continue making welfare payments for people that are refusing to work,” he said during a break.
Of course, it was Republicans who showed willingness to default on the federal debt. Nor is there a smidgen of evidence that any sizable percentage of this target population is “refusing to work.”
The vast majority of SNAP recipients already work, but they’re in lowpaying jobs that are so unstable that they often drift in and out of employment. According to the Census Bureau, 79% of all SNAP families include at least one worker, as do nearly 84% of married couples on SNAP.
In other words, the GOP insistence on work requirements is nothing but the party’s typical performative malevolence toward the poor. If they really cared about getting SNAP recipients into the job market, they’d fund job training programs and infrastructure projects. They never do.
In any case, the only cohort of beneficiaries that tends to move into the job market at all are younger recipients — not those in their 50s. All that work requirements accomplish is to erect bureaucratic barriers to enrollment in the safety net. But that’s the point, isn’t it?
The work rules for TANF are managed somewhat differently — they’re directed at the states administering the program, which have been required to ensure that a certain percentage of beneficiaries are working or looking for work. How the debt ceiling deal applies to that program is unclear.
In the next week or so, before June 5 — the putative date at which the Treasury Department says the government runs out of money to pay its bills without a debt ceiling increase and thus flirts with an unprecedented default — Biden and McCarthy will hit the hustings to claim victory.
But there’s really only one way to think about the exercise we’ve just gone through. It was a supreme waste of time.
Republicans showed they were willing to crash the U.S. economy to make some bog-standard complaints about the federal deficit, most of which they created themselves through the 2017 tax cuts they enacted for the wealthy. Their initial negotiating stance was so extreme that they must have known it could never gain Democratic votes in the House or pass the Democratic Senate.
The Democrats held reasonably firm. They agreed to some modest budget constraints for two years, moved the next debt ceiling cabaret off to beyond the next election, and saved millions of Americans from serious economic pain.
As I’ve written before, if Republicans were really serious about restraining federal spending, they wouldn’t have voted for the tax cuts and budget increases that contribute to the deficit.
Instead, they said the only way to control spending is to refuse to pay the bills they ran up, by refusing to increase the debt ceiling. They lied, and every thinking American knows they lied. So tell me, why did we go through this again?