The anticipation of a government shutdown has made many Americans concerned, particularly those who are dependent on the federal benefits which support them in paying for their foods, necessities, bills, and getting medical products as well. With the strap of the extension of the current limit of debt, President Joe Biden cautioned that “no” another vote could move the U.S. near to non-remittance on loans and moving further into a recession.
Last week, a bill was sanctioned to finance the government till 3rd December after a warning was given by Yellen claiming that the government will certainly run out of money and may also face the possibility of shutting down the federal services which are not essential.
It is particularly a matter of concern for the recipients of the Supplemental Nutrition Assistance Program who solely relied on the program even to put food on the tables for their families.
How are these programs able to be pursued?
To bypass the payments which are missed when Congress couldn’t succeed in its duty to keep the government open, precautions have been taken into the budget of the agency This comprises “multi-year carry over funds; contingency reserves,” along with special funds from the Office of Management and Budget to guard employee time for procedures linked with these programs.
Subject to the tenure of the government shutdown, the number of employees retained to work during the shutdown may vary. For a lesser slip in funds (up to 3 days or less), only 3 staff members are retained for keeping their work on. Amidst bigger shutdowns, this number is raised to eight to escape a slowdown in the dispensation.
What is the opinion of the Center on Budget and Policy Priorities?
According to the non-profit Center on Budget and Policy Priorities (CBPP), precautions are there to make sure of the allocation of SNAP benefits amidst a shutdown, at least for a period of short time. But a bigger shutdown with no raise in the debt limit would extremely restrict the ability of the government for borrowing money and fund campaigns and plans, which means that the SNAP payments could suffer certain extreme declines and lulls.
Essential services will continue to operate
Essential services or services related to public safety will remain unaffected and continue to operate. The plan claims that in the situation of a delay in the yearly distribution, the uncertainty of the event asks for “the continuation of the essential Federal activities and funding to maintain the core programs of the nutrition safety net, including the Supplemental Nutrition Assistance Program (SNAP), the Child Nutrition (CN) programs, and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC).”
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But that program only includes a few days following the beginning of a shutdown. If the shutdown extends further for weeks or more, as stated by the CBPP that the government “would need to impose a sharp, massive spending reduction totaling roughly $1.2 trillion just in the fiscal year 2022,” which aggregates to a decline of nearly 30% throughout the year for the single federal program other than Social Security, Medicare Hospital Insurance and interest.
Reductions to Affect Broadly stated by CBPP
As said by the CBPP, “These reductions would have a wide-ranging impact across the United States, leaving households, businesses, and nonprofits unable to pay their bills while they wait for payments they are legally owed.”
Among the instances it claims: Households with low incomes getting SNAP benefits “could see their benefits held up” for weeks or even months.
SNAP benefits and the debt ceiling
One of the important points of argument moving the country into a government shutdown is the debt limit. On 1st August, a moratorium on the debt ceiling which was set up in 2019, sealed the obligation of US public debt at $28.4 trillion.
As per the report of Center on Budget and Policy Priorities, it claims that from August, “the Treasury has continued borrowing to finance government operations by using “extraordinary measures,” such as deferring and releasing the investments indefinite federal trust funds.” However, by October, these funds are likely to be exhausted, and if “unless Congress suspends or raises the debt limit, the government risks defaulting “on its legally binding obligations.”
Under the Trump administration, the public debt increased by $7.8 trillion, and many Republicans cheerfully voted to raise the debt limit. Although, presently they are keeping their votes, claiming that it is the single path to prevent Democrats from achieving their goals.
They have explained the steps incorporated in the agenda of raising back better of President Biden as “socialist,” with Indiana Congressional Democrats are requesting for a blank check to carry on with their heedless spending binge which will result in the rise of inflation rates at a record price, raise taxes, and dilate the role of the federal government in everyday lives of Hoosiers’.”
Republicans might seek the public to trust that by raising the debt limit they are indicating their consent of Democratic plans to increase the debt. That is not the scenario, as Jonathan Capehart of MSNBC describes by stating: “The debt ceiling is a measure that dictates how much money the Treasury can borrow to cover the debts they already have.”
In case there is no rise in the debt limit then the Bipartisan Policy Center anticipates that by 15th October and 4th November, the Treasury “will most likely have insufficient cash to meet all its financial obligations.” If this were supposed to occur, “Treasury will be unable to meet approximately 40% of all payments due in the several weeks that follow,” estimated by the BPC.
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In actual terms, this signifies that payment plans millions of Americans depend on could be deferred, along with help to feed their families, unemployment insurance, “military paychecks and retirement benefits to advanced child tax credit payments.”