Republicans in the U.S. House of Representatives are reportedly discussing a potential short-term suspension of the debt ceiling to buy more time for debt ceiling negotiations. While a plan has not yet been announced nor a deadline finalized, sources speculate that the possible suspension would last until the end of the fiscal year, September 30, aligning debt limit and fiscal year (FY) 2024 appropriations negotiations.
House Speaker Kevin McCarthy (R-CA) has repeatedly called for steep budget cuts as a condition for raising the country’s debt limit, suggesting that FY2024 spending should be capped at FY2022 levels, which would result in an estimated $130 billion cut to non-defense spending. The proposed suspension would be a “clean” lift, meaning it would not include budget cuts or any other controversial provisions, and, by aligning with the end of the fiscal year, would in theory place additional pressure on Democrats for a deal.
However, many analysts say that the government will run out of funds to meet its financial obligations as early as June, and lawmakers may be hesitant to let the country remain in a state of financial uncertainty until the end of September. U.S. Department of the Treasury (Treasury) Secretary Janet Yellen announced on January 19 that the federal government had reached its statutory debt limit and that her department would begin implementing “extraordinary measures” to keep paying the federal government’s bills and avert a default (see Memo, 1/23). President Biden and Speaker McCarthy are slated to meet in the coming weeks to discuss the debt ceiling, although a date for the meeting has not yet been released.
Negotiations in 2011 over raising the debt ceiling and cutting spending resulted in the “compromise” enactment of the “Budget Control Act of 2011,” which imposed austere spending caps on discretionary spending for the next decade in exchange for raising the debt ceiling. Most Senate Democrats and the White House are calling for a “clean” raising of the debt ceiling, without any policy strings or funding cuts attached. However, due to the divided Congress, bipartisan support will be needed in both chambers to move any proposal.
It is unacceptable for Congress to balance the federal budget by demanding cuts to programs that help the lowest-income households survive. There is a national shortage of approximately 7 million affordable, available homes for people with the lowest incomes, and only one in four households who qualify for federal housing assistance receives the help it needs. Without adequate federal funding for vital federal affordable housing and homeless assistance programs, households with the lowest incomes will continue to live precariously, only one missed paycheck or unexpected emergency away from housing instability, eviction, and, in the worst cases, homelessness.
NLIHC and our members, partners, and allies will continue working to advance the policies needed to ensure everyone has a safe, affordable, accessible place to call home and to guard against spending cuts and harmful proposals that would increase barriers to receiving housing assistance for people with the lowest incomes.
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