The National Committee to Preserve Social Security and Medicare (NCPSSM) and 30 other senior advocacy groups urged House Speaker Kevin McCarthy on Friday to pass a clean bill to lift the debt ceiling, saying the spending cuts in the Republican's plan would hurt older adults.
The groups told McCarthy as well as Senate Majority Leader Chuck Schumer, D-N.Y., and Senate Minority Leader Mitch McConnell, R-Ky., in a letter "to swiftly pass a clean debt limit bill — freestanding legislation, without any other provisions."
On April 19, McCarthy proposed a bill that would raise the U.S. debt limit for about a year and cut federal spending.
McCarthy said the House would pass the bill this week but "dodged when asked whether he had already secured the 218 Republican votes he needed," Bloomberg reported.
The plan would increase the debt ceiling by $1.5 trillion, enough to stave off a U.S. payments default until March 31, 2024, at the latest.
Max Richtman, CEO of NCPSSM, wrote in an op-ed published Monday in The Hill that House Republicans are "demanding spending caps that will shortchange almost every federal agency," proposing "to freeze spending at FY 2022 levels (a whopping $4.5 trillion in cuts), which would amount to an estimated 23% reduction for everything except the military and veterans programs."
The Social Security Administration, "for one, needs more — not less — funding to do its job for the American people," he wrote.
Without proper SSA funding, Social Security claimants "have suffered through field office closings, interminable wait times on the agency's toll-free phone line, and lengthy delays in Social Security Disability Insurance (SSDI) hearings," Richtman said.
Impact of a Debt Default
In the letter, the groups told the lawmakers that "we're at the precipice of an economic calamity."
Treasury Secretary Janet Yellen, "who's already taking extraordinary measures to avert a default, warned that not raising the debt ceiling would undoubtedly cause a recession in the U.S. economy and could cause a global financial crisis," the groups said in their letter.
A default, Richtman wrote in the op-ed, "would hit seniors especially hard because it could jeopardize the payment of Social Security and Medicare benefits. Even a short delay in payments would be a burden for the millions of Americans who rely on their earned benefits to cover out-of-pocket health care expenses, food, rent and utilities.
"In fact, almost two-thirds of beneficiaries depend on Social Security for half of their income, and 40% rely on their benefits for 90% or more of their income," according to Richtman.
Chances of a Deal
Greg Valliere, chief U.S. strategist for AGF Investments, said Monday in his Capitol Insights email briefing that "the most consequential issue in Washington is the looming debt ceiling crisis, which — until recently — the markets have ignored. Fresh data on government receipts have pushed up the default timetable, probably to sometime in June — with no compromise in sight."
There's agreement in both parties, Valliere said, "that some spending reduction is doable, but that's not the crucial issue — what matters most is that there's no agreement on raising the $31.4 trillion debt ceiling; many hard-line House conservatives say they will vote against raising the ceiling, period. Others will insist on real spending cuts, not simply a reduction in the rate of growth."
Chances of a deal: "60-40, an uncomfortably close call," Valliere said.
For the markets, Valliere continued, "the threat of a budget train wreck will increase daily. Biden and the Democrats are content to wait and blame the Republicans for manufacturing a default crisis — a strategy that has worked in the past, but this time may be different, as the dysfunctional Congress takes this issue to the edge of a very steep cliff."
(Image: Shutterstock)
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.