According to numerous economists, if Congress does not agree to raise the debt ceiling, the federal government will not be able to pay all its bills. That default, which is projected on or around June 1, would plunge the U.S. into an instant recession.
Sixty-six million people rely on Social Security each month to pay their bills and keep a roof over their heads. For 40% of recipients, Social Security makes up 90% of their monthly income. These payments would be delayed.
SNAP food stamp payments would be delayed, as would Medicaid payments to states and Medicare payments to hospitals and doctors―devastating to health infrastructure, especially in rural communities.
Two million federal workers, 1.4 million active-duty military personnel, plus government contractors would all see delays in payments. And veterans’ benefits, including disability payments and pensions would be impacted.
Meanwhile the stock market would take a severe hit, dropping anywhere from 33 – 45%, wiping out $12 trillion of household wealth, including retirement accounts.
The show us your budget edition. President Budget released his budget proposal last week. Broadly speaking, it is based on four values: lowering costs for families, strengthening Social Security and Medicare, investing in America, and reducing the deficit, all made possible by ensuring that the wealthiest Americans and the largest corporations pay more of their fair share.
The Biden budget gets so many things right it is hard to describe them in this short space. It makes permanent the average $800 per year reduction in premiums for those covered in the ACA marketplace. It closes the Medicaid coverage gap for people in the 11 states that have refused to expand Medicaid. It restores the expanded Child Tax Credit. And the budget raises revenues reasonably and responsibly, proving that we can afford to make key investments while simultaneously sharply reducing the deficit. Biden’s proposals would roll back the Trump 2017 tax cuts, raise the capital gains tax for people earning at least $1 million a year, and increase the minimum tax rates for households worth at least $100 million.
The Republicans have yet to show us their version of a proposed budget. But they have not hesitated to drop hints of what is to come. In the crosshairs are Medicaid and SNAP, which could face both restrictions, including proposed additional “work requirements” snaggled in layers of bureaucratic red tape – barriers that would result in millions of Americans losing nutrition assistance and health care even though they would still qualify for the programs based on their income level.
“Justifications for work requirements rest on the false assumption that people who receive benefits do not work and must be compelled to do so,” writesthe Center on Budget and Policy Priorities in a new research paper on the issue. “These assumptions are rooted in stereotypes based on race, gender, disability status and class. They ignore the realities of the low-paid labor market, the lack of child care and paid sick and family leave, how health and disability issues and the need to care for family members affect people’s lives, and ongoing labor market discrimination.”
Will you join thousands of constituents to tell Congress to support the Biden budget, with its investments in our future, protections against cuts, reduction in the deficit, and a fairer share of taxes paid by the ultra-rich and corporations? Please click here.
If the U.S. defaults long-term on its debt this summer or fall, 7 million jobs would be lost, according to Mark Zandi, Chief Economist for Moody’s Analytics. Even if the default lasted only a few days, the damage would be enough to push the economy into a recession, with 1 million jobs lost. And if the U.S. does not default, but goes along with the demands by some House Republicans to slash spending to FY 2022 levels, 2.6 million jobs would disappear, also throwing the country into a recession. Tweet this.
If spending was cut to FY 2022 levels, critical domestic programs would have to be cut, on average, by 9 percent. However, if veterans’ medical care and defense spending were shielded from cuts, then domestic spending would need to be sliced by 24 percent in order to meet FY 2022 levels. And if Congress tries to eliminate the deficit by 2033 but makes the Trump tax cuts permanent and exempts Social Security, Medicare, defense and interest on the debt from cuts, everything else would have to be cut by 100 percent. Tweet this. .
Even as some call for deep cuts, many domestic programs are still feeling the effects of the 2011 Budget Control Act. Overall, funding for non-defense programs outside of veterans’ medical care is about 2 percent below its FY 2010 level, adjusted for inflation, and about 9 percent below when adjusted for inflation and population growth. Tweet this.
The U.S. experienced110,315 fatal drug overdoses in the 12-month period ending March 2022 – 294 deaths per day. And almost one in six high school students have used injectable or illicit drugs like heroin, fentanyl, methamphetamine, cocaine, or contaminated prescription pills. Biden’s budget would significantly enhance the nation’s ability to combat the opioid epidemic and promote treatment and recovery. Tweet this.
The Biden budget invests $2.3 billionin protecting workers’ wages and benefits, combating exploitative child labor, improving workers’ safety, and addressing the misclassification of workers as independent consultants. That’s a whopping $430 million increase over this year’s allocation. Tweet this.
The Biden budget would provide $59 billion to pay for an additional 200,000 housing vouchers for low-income renters, including extremely low-income veterans and youth aging out of foster care.
In 2022, landlords filed almost 970,000 evictions in the 10 states and 34 cities monitored by the Eviction Lab at Princeton University. That’s a 78.6 percent increase over 2021. Evictions dropped substantially in 2020 and 2021, due to a combination of a CDC-mandated eviction moratorium, and increased rental and other aid during the pandemic. But in 2022, after the moratorium had been lifted and the aid largely had run dry, evictions rose back to their historic, pre-pandemic levels.
Nearly $5 trillion
The Biden budget would raise nearly $5 trillion by increasing taxes on the wealthiest Americans and large corporations. Some of this money would be used for critical investments in domestic programs; other revenue would go toward paring down the country’s deficit by $2.9 trillion.
There were 5.5 million visits to Minnesota food pantries in 2022, a record high and an increase of 1.9 million visits over the previous year, according to Hunger Solutions Minnesota. Earlier this week, during floor debate over a measure that would provide free lunches to school kids, a Minnesota state senator said he had never met anyone in his state who is hungry. “I have yet to meet a person in Minnesota that says they don’t have enough to eat,” said Sen. Steve Drazkowski.