Debt Limit Deal Increases Government Spending on Food Stamps, Analysis Shows

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The Congressional Budget Office (CBO) released an analysis on Tuesday revealing this potential outcome, which may pose a challenge for House Speaker Kevin McCarthy as he seeks to gain support for the agreement in the GOP-controlled House.

Debt Limit Deal Increases Government Spending on Food Stamps
Debt Limit Deal Increases Government Spending on Food Stamps ( Photo: The New York Times )

A bipartisan agreement aimed at preventing a disastrous default on the nation’s debt could lead to increased government spending on food stamps

With Treasury Secretary Janet Yellen warning that the government might be unable to meet its debt obligations as early as June 5, Congress was already under pressure to pass legislation before this deadline. The CBO’s analysis further noted that the combination of spending cuts and policy changes included in the agreement would reduce budget deficits by approximately $1.5 trillion over the next decade.

However, the analysis also highlighted that the suspension of work requirements for federal health care programs for the poor and restrictions on food and cash assistance, demanded by House Republicans during negotiations with President Joe Biden, did not go as far as Republicans had hoped. The deal did not include work requirements for Medicaid and fell short of Republicans’ expectations for the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF).

While the agreement raised the age limit for work requirements on able-bodied adults without dependents receiving SNAP, it also introduced new exemptions

Homeless individuals, veterans, and those aged 18 to 24 who were in foster care at age 18 would be exempt from work rules for food assistance. The White House estimated that the number of people newly protected would be similar to those newly subjected to work requirements.

However, the CBO analysis revealed that the changes to SNAP would increase federal spending by approximately $2.1 billion, resulting in around 78,000 additional people receiving food assistance each month compared to current projections. On the other hand, modifications to TANF, the cash assistance program, would save the government $5 million, allowing Republicans to claim overall savings in welfare programs.

 

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