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Concessions made for bipartisan debt limit deal proving costly to many


The provisions of the new Fiscal Responsibility Act are becoming clearer, and they could end up negatively affecting hundreds of thousands of Americans relying on government assistance for food and for repaying their student loans. 

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June 6 (UPI) -- The provisions of the new Fiscal Responsibility Act are becoming clearer, and they could end up negatively affecting thousands of Americans relying on government assistance.

President Joe Biden signed the bill into law over the weekend, avoiding what would have been the United States' first-ever debt default.

The bill to temporarily suspend the U.S. debt ceiling passed the Senate by a vote of 63 to 36 before landing on Biden's desk.

Concessions made to gain Republican support in order to pass the bill will see interest payments restart on what had been temporarily halted student loan payments. Additionally, those concessions also will change the eligibility requirements to the Supplemental Nutrition Assistance Program, affecting hundreds of thousands of needy recipients.

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"We're cutting spending and bringing deficits down," Biden said at the time of the agreement's approval.

"And we protected important priorities from Social Security to Medicare to Medicaid to veterans to our transformational investments in infrastructure and clean energy," he said.

However, more than a half million Americans could lose their access to the Supplemental Nutrition Assistance Program. SNAP provides nutrition benefits to supplement the budgets of needy families.

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The Center on Budget and Policy Priorities, a left-leaning think tank based in Washington, D.C., estimates about 750,000 Americans between the ages of 50 and 54 are at risk of losing their assistance. The new legislation expands working requirements for those seeking food assistance.

Those in that age group must prove they are working or attending training for 20 hours a week.

Work requirements already exist for those between 18 and 49 seeking SNAP benefits.

"Numerous studies have shown that this requirement does not improve employment or earnings, but it does take away SNAP's food assistance from a substantial share of people who are subject to it," the report reads.

People who are homeless, veterans or were in the foster care system are exempt from the reporting requirements.

"You're not going to balance the budget, much less pay down the debt, through these kinds of changes," the center's Ed Bolen told NBC News in an interview.

"On the other hand, you're going to affect up to 750,000 low-income older Americans who need food assistance," he said.

Meanwhile, millions of Americans with student debt now have a date for when their interest rate payments will begin anew.

Payments including interest were initially paused in the wake of the COVID-19 pandemic by then-president Donald Trump.

That grace period has continually been extended, most recently by Biden, despite growing calls to end the temporary stoppage.

The Biden administration agreed to hold off on further payment pauses as part of the debt ceiling deal.

That means millions of former students will need to resume paying those debts and interest payments, beginning in August.

As much as the debt-limit agreement affects average Americans, it has a political cost, too.

Across the aisle, several Republican lawmakers also are unhappy with the compromises made to reach a deal between Biden and House Speaker Kevin McCarthy.

On Tuesday, a number of Republicans belonging to the House Freedom Caucus voted against moving McCarthy's legislative agenda forward.

"Today we took down the rule because we're frustrated at the way this place is operating," Rep. Matt Gaetz, R-Fla., told reporters Tuesday afternoon.

"We took a stand in January to end the era of the imperial speakership. We're concerned that the fundamental commitments that allowed Kevin McCarthy to assume the speakership have been violated as a consequence of the debt limit deal, and, you know, the answer for us is to reassert House conservatives as the appropriate coalition partner for our leadership, instead of them making common cause with Democrats."

Republican leadership was not aware how the vote would unfold ahead of time, CNN reported.

At a time when his House leadership position is again being questioned by some members in his own party, McCarthy also brushed off suggestions of creating a defense supplemental to bypass the debt ceiling legislation to increase military spending.

The idea was floated as a way to appease some Republicans that pointed out defense spending is actually decreasing when factoring in inflation.

"Why do you move to a supplemental when we just passed [an agreement]. If the idea of the supplemental is to go around the agreement we just came to, I think we've got to walk through appropriations," McCarthy told reporters Monday at the U.S. Capitol.

"There's a lot of places for reform where we can have a lot of savings," he said.