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The GOP proposal to raise the debt ceiling would force Americans on Social Security and Medicare to wait longer to receive help and make college more expensive, the White House says

By Ayelet Sheffey,Juliana Kaplan,

2023-05-16

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U.S. House Speaker Kevin McCarthy (R-CA) speaks about the country's debt ceiling outside his office at the Capitol on February 6, 2023 in Washington, DC.
  • The Office of Management and Budget released a memo outlining the impacts of the GOP debt ceiling plan.
  • Under various scenarios, the OMB estimated federal programs could be cut by up to 30%.
  • That would include worse customer service times for Americans receiving Medicare and Social Security.

The Biden administration is sounding the alarm over Republicans' hopes to enact far-reaching spending cuts, saying that the contours of the GOP's plans would result in a 30% slash to a slew of popular federal programs.

In a memo, Shalanda Young, director of the Office of Management and Budget, breaks down the math on Republicans' desired funding levels. The GOP's latest line on spending is that it wants to maintain the same funding levels as fiscal year 2022; that level of funding is reflected in their narrowly-passed House bill to raise the debt ceiling for just one year. The bill includes a long list of proposed spending cuts and changes to federal programs, including banning student-loan forgiveness and raising work requirements to access social welfare programs.

While Young noted that the GOP bill doesn't include a line-by-line breakdown of exactly how cuts would be implement, she lays out a few scenarios. If Republicans leave defense funding, Veterans Affairs, and Homeland Security untouched, everything else would have to be cut by 30%. That could mean people waiting for disability benefits through Social Security might face wait times of at least two months longer, and those seeking help through Social Security and Medicare offices could experience worse customer servicer. Additionally, the cuts would mean less funding for affordable housing vouchers, and the maximum Pell Grant award going down by nearly $1,400.

"House Republicans can do this math as well as anyone. They are absolutely aware of these very calculations," Young writes.

Even in a scenario where defense spending remains untouched, but everything else, including spending on veterans and homeland security, stays on the table, the remaining programs would have to contend with at least a 20% cut.

And, if the GOP wants to include cuts to all programs, even the military, just bringing spending down to fiscal year 2022 levels across the board would mean a 9% cut, according to Young.

"Those cuts would be incredibly damaging, self-defeating, and unpopular," Young writes. "If House Republicans choose not to cut funding for military, veterans' medical care, and border security, then their cuts to everything else must get even deeper."

Young notes that the calculations are likely optimistic, saying it's unlikely that Republicans can find cuts that deep in the bills they're currently looking over — meaning instead that everything else will suffer a deeper slash.

This memo comes on the same day that President Joe Biden is set to meet with Speaker of the House Kevin McCarthy, Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, and House Minority Leader Hakeem Jeffries for the second time to attempt to come to an agreement on raising the debt ceiling.

The top congressional leaders first met with the president last week , and since then, their staffers have been engaging in discussion over the past week to come closer to a deal before the US defaults, which Treasury Secretary Janet Yellen said could happen as soon as early June . While Biden expressed optimism to reporters on Sunday with the direction the discussions were headed, though, McCarthy did not express the same confidence.

"It doesn't seem to me yet they want a deal, it just seems like they want to look like they are in a meeting but they aren't talking anything serious," McCarthy told reporters on Monday.

"If you look at the timeline to pass something in the House and pass something in the Senate, you've got to have something done by this weekend," he later added. "And we are nowhere near any of that."

As Yellen warned McCarthy in her Monday letter , failure to raise the debt ceiling on time would be catastrophic for Americans. It would cause "severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests," Yellen wrote.

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