Federal Update – Debt Ceiling Negotiations Continue; Biden Administration Announces ALL INside Initiative
May 18, 2023
Debt Ceiling Negotiations Continue This Week
This week, top congressional leaders went to the White House for a follow-up meeting with President Joe Biden on the debt limit. Since an initial discussion, which took place on May 9, top aides and administration officials have been attempting to negotiate a compromise deal that would extend the U.S. government’s authority to borrow money to meet its existing legal obligations. While some incremental progress was made over the past week, the two sides continue to have dramatically different views on how to move forward. For their part, Democrats continue to publicly insist on advancing a clean debt limit increase. Republicans, on the other hand, have been adamant about the need for significant spending cuts and concessions as part of any deal.
As negotiations continue, there are several key issues that are likely to be discussed in more detail. Any potential bipartisan agreement will likely center on establishing budget caps, rescinding unspent COVID-relief funding, and streamlining federal permitting rules. There also has been some discussion about expanding work requirements for certain federal aid programs. However, President Biden recently announced that he would not entertain any new requirements for Medicaid recipients. White House officials have also made clear that the administration would work to prevent eligibility changes to other programs.
Although there has been discussion regarding advancement of a short-term debt limit increase to give negotiators additional time to craft a bipartisan deal, Speaker McCarthy has firmly ruled out that possibility. Moreover, a large bloc of Senate Republicans recently sent a letter to Majority Leader Chuck Schumer (D-NY) stating that they will not vote for cloture on any clean debt-limit measure unless it includes “substantive spending and budget reforms.”
With less than two weeks until the potential “X-date” to avoid a national debt default, House Democrats recently announced the development of a backup plan. Congressman Brendan Boyle (D-PA) – the ranking Democrat on the House Budget Committee – has filed a discharge petition on a clean debt ceiling increase. If negotiations stall, the petition would essentially force the House to consider the measure, but it can only do so if a majority of lawmakers sign on. It should be noted that House Democrats would still need to find a handful of Republican lawmakers to support them in order to get over the 218-vote threshold.
Finally, President Biden has indicated that he would consider invoking the 14th Amendment as a means to circumvent the debt ceiling standoff. The amendment states that the public debt of the United States “shall not be questioned.” However, such a strategy would be challenged in court and could take months to be resolved.
House Appropriators Begin Consideration of Fiscal Year 2024 Spending Bills
As negotiations continue on the debt ceiling, the House Appropriations Committee this week began consideration of its fiscal year 2024 spending bills, with four (of 12) subcommittees – Homeland Security; Agriculture-Rural Development; Military Construction-Veterans’ Affairs; and, Legislative Branch – advancing their respective funding measures. While overall spending limits have not yet been established, House appropriators are currently drafting their bills using the fiscal year 2022 top-line levels, as called for in the Republican debt limit proposal. This would amount to a reduction of approximately $130 billion, though it’s unclear at this point which individual spending bills or specific programs would bear the brunt of the cuts.
Homeland Security
Earlier today, the House Subcommittee on Homeland Security approved its fiscal year 2024 spending bill. The measure provides funding to agencies and programs within the Department of Homeland Security, including U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement, and the Federal Emergency Management Agency (FEMA). The draft bill proposes nearly $63 billion in discretionary spending, which is $2 billion more than the fiscal year 2023 enacted level. It also provides more than $20 billion in funding for the Disaster Relief Fund to support response and recovery efforts following major disasters and emergencies. In addition, and among other things, the legislation proposes $2.1 billion for border wall construction and would provide funding to hire additional border patrol agents. It also eliminates funding for the Emergency Food and Shelter Program – Humanitarian, which administers funds to local governments and nongovernmental organizations to provide assistance to migrants.
Agriculture-Rural Development
The House Agriculture spending bill would provide over $25 billion in discretionary funding for programs within the purview of the U.S. Department of Agriculture (USDA), the Food and Drug Administration, and related agencies. The proposed spending level is approximately $532 million below the fiscal year 2023 enacted level and $3.6 billion less than the president’s budget request. The legislation includes a $32 billion decrease in mandatory spending for the Supplemental Nutrition Assistance Program (SNAP; Cal Fresh). This is due to the end of increased pandemic-era benefits and a decrease in participation rates. The measure also would return benefits under the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program to pre-pandemic levels, though benefits will be maintained at higher levels to account for inflation.
Biden Administration Partners with California and Others to Address Unsheltered Homelessness
Earlier today, the U.S. Interagency Council on Homelessness (USCIH) announced that it would partner with state and local leaders in several major cities, including Los Angeles – as well as more broadly within the state of California – to address unsheltered homelessness. The All INside Initiative is intended to help strengthen and accelerate local efforts to get people off the streets and into homes. Specifically, and among other things, the initiative would embed a dedicated federal official in key pilot-program communities. It also would deploy dedicated teams across the federal government to identify opportunities for regulatory relief and flexibilities, navigate federal funding streams, and facilitate a peer learning network. Finally, the initiative will convene philanthropy, the private sector, and other communities to identify more opportunities for support and collaboration.
In addition, the Biden administration has announced that it will launch a series of new efforts to address major barriers to housing, health care, and other support for the unsheltered homeless population. For example, the U.S. Department of Health and Human Services (HHS) will provide technical assistance to help communities leverage federal programs like Medicaid to cover and provide housing-related supportive services and behavioral health care.