WH analysis of GOP deficit plan: job losses, poorer kids

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Office of Management and Budget Director Shalanda Young testifies before the House Appropriations Committee on Budget and Oversight hearing to examine proposed budget estimates and justification for the 2024 fiscal year on Capitol Hill Thursday, March 23, 2023, in Washington. (AP Photo/Jose Luis Magana)

WASHINGTON – The White House says the math in House Speaker Kevin McCarthy's plan to trim the federal deficit is "unforgiving” —- estimating a deep 22% cut to non-defense spending that would leave children poorer, veterans sicker, families hungrier and housing more expensive.

“There is no escaping the pain to working families and our economic future,” White House budget director Shalanda Young concludes in a draft of an analysis obtained by The Associated Press on Thursday.

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President Joe Biden and GOP lawmakers are engaged in a tense showdown over federal finances, Republican House Speaker McCarthy insisting on spending cuts as a condition to raise the government's legal borrowing authority while Democrat Biden wants to keep budget talks separate from the critical debt limit action.

McCarthy has criticized Biden for avoiding sit-down talks. On Wednesday the speaker unveiled a plan that he said would trim more than $4 trillion from deficits over the next decade, largely by freezing discretionary spending at 2022 levels and increasing them by just 1% a year thereafter. In his State of the Union address in January, Biden indicated he would engage in some form of talks — once the Republicans laid out a budget proposal.

GOP lawmakers are betting that the public supports their vision of a smaller government, while the White House's strategy is premised on the resulting cuts being unpopular once the consequences are understood.

Budget Director Young's analysis is an effort to explain those possible consequences, though McCarthy anticipated the criticism by telling a Wall Street audience on Monday: “Don’t believe anyone who says our plans hurt Americans' social safety net. We are a very generous nation. And when people fall on tough times, we'll help them.”

Young argues in her analysis that McCarthy's budget caps mask the full extent of the likely cuts, and that they would compound over time in ways that she said would harm millions of U.S. households. The White House's own budget proposal offers nearly $3 trillion in deficit savings, mainly through higher taxes on the wealthy and corporations.

“The legislation Congressional Republicans have drafted is designed to avoid leveling with the American people about how these cuts would impact their lives,” Young writes in the draft. “This bill is vague by design — but that doesn’t obscure the fact that it will force devastating cuts that will hurt millions of people, damage our economy and undermine our national security.”

By not spelling out specific cuts, Republicans are able to potentially minimize a backlash to their plan. McCarthy's proposal would raise the debt ceiling by $1.5 trillion into March 2024 in exchange for a long list of Republican priorities.

In addition to the 1% limit to future spending increases, the GOP plan would gut Biden’s signature climate change funds, cancel up to $20,000 per person in student loan forgiveness and impose long-sought work requirements on recipients of government aid, among other provisions.

The president and Congress need to reach some sort of agreement on raising the $31 trillion debt cap this summer, when the “extraordinary” steps taken by the Treasury Department would be exhausted and the government could default on its payments.

Given that Republicans have indicated that they will protect defense spending, Young estimates that domestic programs would be cut by 22% under the GOP plan. Social Security and Medicare — programs expected to drive up the national debt long term — are shielded from any reductions.

At that reduced level of funding, there would be 30 million fewer veteran outpatient visits and 81,000 jobs lost across the Veterans Health Administration, according to the analysis.

The cuts would be borne by 25 million students in schools that teach poorer children, 7.5 million students with disabilities, and could lead to the loss of 108,000 teacher and classroom aide jobs. There would be 200,000 fewer children enrolled in Head Start and 180,000 who would lose access to child care.

Roughly 1.7 million women, infants, and children would lose vital nutrition assistance through the Special Supplemental Nutrition Program. More than a million seniors would lose access to food programs such as Meals on Wheels.

There would be 630,000 poorer families who would lose their access to housing vouchers. And just months after a Norfolk Southern train derailment in Ohio led to GOP criticism of the Biden administration, there would be 7,000 fewer rail safety inspections, the analysis contends.

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