President Joe Biden and Speaker of the House Kevin McCarthy finally have a deal to address the debt-ceiling crisis — but it included an unexpected twist for food-stamp recipients.
On Saturday night, Biden and McCarthy announced they had come to an agreement on raising the debt ceiling until 2025 in legislation called the Fiscal Responsibility Act. After months of stalemate, neither party got exactly what they wanted — McCarthy was unable to get $4.5 trillion in spending cuts that he initially proposed, while Biden did not get an entirely clean debt ceiling deal without any cuts attached.
One particularly contentious element of the bill is a set of new work requirementsfor the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) programs.
Many Americans who wish to receive SNAP benefits have to work or complete training programs if they are between the ages of 18 and 49. That can be the case for an "able bodied adult without dependents." The bill would eventually raise the maximum age to 54.
After the text of the bill was released, some Democratic lawmakers criticized the work requirements.
"As somebody who was a food stamp recipient, there is absolutely no way I can see myself green-lighting something that will take food from people's mouths," Missouri Rep. Cori Bush told reporters on Tuesday.
She led some of her Democratic colleagues in introducing an amendment to remove the new SNAP work requirements from the debt-ceiling bill.
But the Congressional Budget Office (CBO) released its cost estimates of the bill on Tuesday evening, and it found that the SNAP proposalcould actually end up expanding the number of Americans who receive thosebenefits. It would exempt veterans, homeless people, and "people ages 18 to 24 who were in foster care when they turned 18" from the work requirements for SNAP, according to a CBO letter to McCarthy.
"During the 2025–2030 period, when the group of people up to the age of 54 would be subject to the work requirement and the new exclusions were in effect, approximately 78,000 people would gain benefits in an average month, on net," the CBO letter said, adding that this would mean about a 0.2% increase "in the total number of people receiving SNAP benefits."
A White House official told reporters on a Tuesday press call that "time limits on SNAP eligibility amplify existing inequities in food and economic and economic security."
"At the President's insistence, SNAP changes are temporary, sunsetting at 2030, which provides an opportunity to reevaluate them," the official added.
Still, McCarthy criticized the CBO's estimate that the deal would expand SNAP eligibility.
"Come see me in a year, and I'll show you how much we actually saved," McCarthy told reporters on Tuesday night. "You watch — a lot of people are going to get jobs now."
How the work requirements will impact employment
Despite McCarthy and Republicans' belief that work requirements will bolster employment, some experts aren't so sure.
Lauren Bauer, a fellow in Economic Studies at the Brookings Institution and the associate director of The Hamilton Project at Brookings, said during a media briefing on Wednesday that there's not that much "evidence that work requirements increase employment" and she "doesn't expect there to be any increased employment among the 50- to 54-year olds based on this deal."
"There might be a little bit, as I said before, because a substantial portion of this population works in the volatile low-wage labor market that they might be able to tack on a few extra hours to more consistently meet that threshold," Bauer said. "That is where I would expect to see any response to the policy change. But it's quite unlikely."
CBO also noted in a previous report the potential impacts on employment, writing in its report that "making the receipt of benefits contingent on working or preparing to work has substantially increased the employment rate of the targeted recipients in TANF during the year after they enter the program and by a smaller amount in later years. Work requirements in SNAP have increased employment less; in Medicaid, they appear to have had little effect on employment."
Bernard Yaros, an economist at Moody's Analytics, elaborated on the minimal impact SNAP work requirements would have on employment, telling Insider that "when you look at the dollars and cents that are involved here with the recent SNAP changes, we're just talking a couple billions of dollars," and added that "in the grand scheme of things of the US macroeconomy, it's not really going to move the needle in terms of really boosting labor supply."
Yaros said that "other headwinds to labor supply" like an "insufficient immigration system" as well as baby boomers who are deciding to retire "are much bigger weights on labor supply."
Despite the minimal impact on employment, many Democratic lawmakers don't want to see any work requirements in the debt-ceiling deal. Chair of the Congressional Progressive Caucus Pramila Jayapal told reporters during a call on Tuesday that "even with the exemptions, it's going to mean that people have to go through a process, more bureaucratic red tape, to determine whether or not they qualify for those exemptions."
"I think it goes to the principle of this bureaucratic red tape that we call work requirements," Jayapal said. "They do not do anything to get people back into work. That is what reams of data have shown. They are extremely detrimental to getting assistance to people that need it the most."
FAQs
The debt ceiling agreement, which includes almost all of the Supplemental Nutrition Assistance Program (SNAP) changes from the House-passed debt-ceiling-and-cuts bill, would put almost 750,000 older adults aged 50-54 at risk of losing food assistance through an expansion of the existing, failed SNAP work-reporting ...
What is the agreement between Mccarthy and Biden? ›
Central to the compromise is a two-year budget deal that would essentially hold spending flat for 2024, while boosting it for defense and veterans, and capping increases at 1% for 2025. That's alongside raising the debt limit for two years, pushing the volatile political issue past the next presidential election.
What are the work requirements for the debt ceiling bill? ›
What is the work requirement policy in the debt ceiling bill? Under the Medicaid work requirement plan, certain adult enrollees ages 19-55 would need to work or participate in other qualifying activities (like community service or job training) for at least 80 hours per month.
Should SNAP interviews be abolished? ›
They argue that the current regulatory requirement is an outdated bureaucratic hurdle. A 2021 review of enrollment data in California found that 31% of SNAP applicants in Los Angeles County were denied SNAP due to missing their interview, compared to just 6% who were denied for failing to meet eligibility requirements.
What was the agreement on the debt ceiling? ›
Congress passed and President Joe Biden signed into law the “Fiscal Responsibility Act,” an agreement to lift the federal debt ceiling until 2025 in exchange for capping federal spending programs at fiscal year (FY) 2023 levels in FY2024 and allowing an only 1% increase in spending in FY2025.
What does increasing the debt ceiling do? ›
It simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past. Failing to increase the debt limit would have catastrophic economic consequences.
How many working Americans need food stamps? ›
One in 10 workers in the United States live in a household that receives SNAP due to low wages, inconsistent work schedules, and no paid sick leave. National data show that among adult wage earners who are SNAP recipients, 70 percent worked full-time every week, and more than half worked the full, or nearly full, year.
Who is the Republican opposed to McCarthy? ›
Matt Gaetz (Fla.) Gaetz — the staunchly pro-Trump Floridian and most vocal of McCarthy's critics — had threatened for months to oust the House speaker if he relied on Democratic votes to pass legislation.
Will the debt ceiling Deal reduce mortgage rates? ›
Although the debt ceiling itself doesn't directly determine mortgage rates, its impact on the overall economy could wreak havoc on rates. The potential consequences and uncertainty associated with reaching the debt ceiling could impact investor confidence and lead to changes in interest rates, including mortgage rates.
Is McCarthy a House or Senate? ›
| Kevin McCarthy |
|---|
| Member of the U.S. House of Representatives from California |
| In office January 3, 2007 – December 31, 2023 |
| Preceded by | Bill Thomas |
| Succeeded by | Vince Fong |
50 more rowsDemocrats argue that work requirements could unfairly push people out of Medicaid, too. Some people were wrongly kicked off Medicaid in Arkansas when the state briefly introduced work requirements, Chiquita Brooks-LaSure, administrator of the Centers for Medicare and Medicaid Services, told lawmakers.
What does the debt ceiling mean for federal employees? ›
The “debt limit” or “debt ceiling” refers to the limit imposed by law on the amount of national debt that the U.S. government can have outstanding.
Does debt ceiling cause government shutdown? ›
When assessing market risk, it is important not to conflate a government shutdown with the debt ceiling. A shutdown would occur if Congress fails to pass legislation to authorize government spending to cover all or part of fiscal year 2018 before it begins on October 1. That legislation needs the president's signature.
What are the criticism of snap? ›
Costs of SNAP. SNAP does not deliver nutritious diets, but the 42 million recipients still gain from the program because they receive benefits from the government. However, those benefits come with high costs. One cost is that federal and state food stamp administration consumes $12 billion a year.
Why do jobs ask if you are on snap? ›
CMS Responds: Sometimes the employee (or the new hire) asks the question “Why are you asking if I'm on SNAP (food stamps)?” Well the employer, or we are, as a company taking advantage of a federal program to initiate jobs.
Why you should never turn down an interview? ›
It allows you to put yourself on the company's radar.
A good impression can last a very long time. That's why it's crucial not to pass up any interview opportunities.
Who controls the US debt ceiling? ›
When the Treasury Department spends the maximum amount authorized under the ceiling, Congress can vote to suspend or raise the limit on borrowing. In 2023, a debt limit showdown again brought the country to the brink of default, reviving debate about the future of the ceiling.
Did the debt ceiling law pass? ›
Currently, the debt ceiling has been suspended altogether as of June 3, 2023, when U.S. president Joe Biden signed the Fiscal Responsibility Act of 2023 into law. This ended the debt-ceiling crisis that began on January 19, 2023, and the suspension will remain in effect until January 1, 2025.
Who won the debt ceiling deal? ›
Winner: Kevin McCarthy
Rather than fragmented and chaotic, his conference was unified in maintaining they would not accept a clean debt ceiling increase, and that Biden must negotiate with them.
How much debt is snap in? ›
Snap long term debt for the quarter ending March 31, 2024 was $3.301B, a 11.83% decline year-over-year. Snap long term debt for 2023 was $3.749B, a 0.18% increase from 2022. Snap long term debt for 2022 was $3.743B, a 66.11% increase from 2021. Snap long term debt for 2021 was $2.253B, a 34.5% increase from 2020.
If the debt ceiling is not raised, leading to a U.S. government default on its debt, this could result in increased mortgage rates. This escalation in debt ceiling mortgage rates happens because a default increases the perceived risk associated with lending money in the United States.
What are the changes to snap in California? ›
Future changes: California has a waiver in place for work requirements through October 31, 2024. Come November 1st, 2024, able bodied adults between the ages of 18 to 54 without children or dependents living with them will have to show that they have worked at least 80 hours a month to qualify for Cal Fresh benefits.
