President Joe Biden and Speaker of the U.S. House of Representatives Kevin McCarthy (R-CA) met at the White House on February 1 to begin what is likely to be a long series of negotiations over federal spending and the raising of the debt ceiling.
Speaker McCarthy has repeatedly called for steep budget cuts as a necessary condition for raising the country’s debt limit, suggesting that fiscal year (FY) 2024 spending should be capped at FY2022 levels, which would result in an estimated $130 billion cut to non-defense spending. President Biden, however, is pushing the Speaker not to tie the federal appropriations process to debt ceiling negotiations – which could create financial uncertainty across global markets – and instead enact a “clean” lifting of the debt ceiling.
While Speaker McCarthy left the meeting explaining that “no agreement [and] no promises” had been made, both leaders have pledged to continue negotiations. The meeting is likely to be the first of many meetings between the White House and the House Speaker regarding the debt ceiling, with many analysts warning that the government could run out of funds to meet its financial obligations as early as June. 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). Negotiations over the debt ceiling and spending cuts in 2011 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.
Despite calls for steep cuts to the federal budget in the FY2024 budget, House Republicans have yet to name the programs for which they would slash funding. President Biden is slated to release his budget request for FY2024 on March 9, after which Speaker McCarthy and his colleagues in the House are expected to unveil their proposal.
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It is unacceptable 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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