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Biden stands by veterans and safety net programs as GOP threatens default

Republicans are pushing for spending cuts and have rejected Biden’s proposed tax increases for the ultrawealthy that would reduce the federal deficit.

By Oliver Willis - May 23, 2023
US President Joe Biden speaks during a news conference following the Group of Seven (G-7) leaders summit in Hiroshima, Japan, on Sunday, May 21, 2023.
President Joe Biden speaks during a news conference following the Group of Seven (G-7) leaders summit in Hiroshima, Japan, on Sunday, May 21, 2023. (Kiyoshi Ota/Bloomberg pool via AP)

President Joe Biden reasserted his support for Social Security and Medicaid and opposition to cuts in veterans’ health care funding on May 21 during a meeting of world leaders in Hiroshima, Japan, amid ongoing negotiations between the White House and congressional Republicans over raising the debt ceiling.

“I’m not going to agree to a deal that protects, for example, a $30 billion tax break for the oil industry, which made $200 billion last year — they don’t need an incentive of another $30 billion — while putting healthcare of 21 million Americans at risk by going after Medicaid,” Biden said during a press conference.

Republicans are refusing to increase the debt ceiling, the limit on how much the U.S. government is allowed to borrow to meet its financial obligations, until Democrats agree to their demands for spending cuts, despite the likelihood of a catastrophic default.

According to CNN, Treasury Secretary Janet Yellen told NBC’s “Meet the Press” on May 21 that the government would reach the spending limit in a few weeks: “I indicated in my last letter to Congress that we expect to be unable to pay all of our bills in early June and possibly as soon as June 1. And I will continue to update Congress, but I certainly haven’t changed my assessment. So I think that that’s a hard deadline.”

Experts on economics and budgeting say that a default is likely to set off a catastrophic ripple effect throughout the U.S. and global economies as the government was forced to halt payments owed to private companies.

Since 1978, Congress has raised the debt ceiling 78 times under both Democratic and Republican presidents, according to the Treasury Department.

Republicans have called for spending cuts in exchange for reauthorization, and have passed legislation that would eliminate a recent increase in IRS funding and rescind student loan forgiveness. Biden said during the press conference on May 21 that he would not support proposals that would prevent the government from negotiating for lower drug prices and cut jobs for educators and law enforcement: “I’m not going to agree to a deal that protects wealthy tax cheats and crypto traders while putting food assistance at risk for nearly a hundred — excuse me — nearly 1 million Americans.”

Republicans have called for additional work requirements for people receiving Medicaid benefits, which research shows are not effective at reducing poverty. The Congressional Budget Office has estimated that 600,000 beneficiaries could become uninsured if such rules were imposed.

The Limit, Save, Grow, Act of 2023, which passed the House on April 26, would freeze spending for executive agencies and departments, and, according to testimony by Secretary of Veterans Affairs Denis McDonough, would lead to fewer covered medical visits for veterans and increased wait times to process claims.

“MAGA Republicans in Congress are threatening to default on the national debt, a debt that took 230 years to accumulate overall, unless we do what they say. They say they’re going to default unless I agree to all these wacko notions they have,” Biden said in remarks on April 19.

Biden has also criticized Republican attempts to make cuts to Social Security and Medicare, and he highlighted the issue during his State of the Union address on Feb. 7.

“If anyone tries to cut Social Security, I will stop them. And if anyone tries to cut Medicare, I will stop them. I will not allow them to be taken away. Not today. Not tomorrow. Not ever,” he said.

House Speaker Kevin McCarthy said during an appearance on Fox News the day after the State of the Union address that Biden’s claim that some Republicans want to cut Social Security was “not true,” but several members of the party have called for safety net cuts.

Biden released a budget proposal on March 9 that projected a $3 trillion reduction in the deficit over a decade. His suggested policies included a minimum tax for billionaires, an increase to Medicare funding through a tax on the wealthy, and a repeal of Trump-era tax cuts for the wealthy and large corporations.

Republicans have flatly rejected efforts to address the deficit through taxation.

The New Republic reported May 17 that McCarthy had said he would not consider raising taxes on the wealthy.

Published with permission of The American Independent Foundation.

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