Emerging debt ceiling deal is a dud

Emerging debt ceiling deal is a dud

Reports indicate that the White House and House Speaker Kevin McCarthy are nearing an agreement to raise the debt ceiling for two years. McCarthy would release the fiscal hostage in return for concessions from President Joe Biden that have congressional Democrats up in arms, and that are just objectively bad policy. One of these would impose tougher work requirements on food assistance and/or Medicaid. The other would shift some of the new funding Democrats provided to the IRS over to defense and veterans. Both would reinforce bogus Republican narratives.

The New York Times reported the outlines of the emerging deal late Thursday: strict caps on ​​discretionary spending for the next two years, increases in defense spending and for veterans, and a shift of $10 billion in new funding for the IRS to other programs. Semafor and Punchline report that stiffened work requirements for social welfare programs are still in discussion. None of this is good or necessary.

The work requirements are particularly pernicious, and particularly pointless. Biden has been wobbly on this one for weeks, suggesting that he’d be open to them. The Republican bill has work requirements for Medicaid and stricter requirements for the Supplemental Nutrition Assistance Program. Both are unnecessary, punitive, and would do more harm than good to the people who can least afford it.

The majority of people getting Medicaid coverage already work, or qualify for exemptions, and adding the bureaucratic hassle of making them prove they are employed won’t increase employment and will result in more people becoming uninsured. That’s been well established, including by experience. Arkansas tried it during the Trump administration and it was a failure. A new analysis from Commonwealth backs that up and adds further insight. Forcing work requirements would cost states and public hospitals more than they would save. States would have to administer the program and create new layers of bureaucracy to enforce them, and hospitals and clinics would have to pick up the cost of caring for more uninsured people. It’s pointless and it’s cruel.

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