President Joe Biden’s signing of the Fiscal Responsibility Act June 3 puts to rest fears that a first-ever default on U.S. government debt would trigger massive job losses, plunging stock prices and a suspension of Social Security payments, at least for now.
Congress raced to pass the measure following 11th-hour negotiations between Biden and House Speaker Kevin McCarthy over extending the U.S. debt ceiling to avert a projected June 5 default. It suspends the debt limit until the start of 2025, meaning the government can continue borrowing money and paying its obligations.
The law also cuts federal spending by an estimated $1.5 trillion over 10 years, according to the Congressional Budget Office (CBO). That’s far less than the cuts initially sought by House Republicans in a bill they passed in April as a precursor to the debt limit talks.
“The ratio of political theater to economic change in this discussion is enormous. The economic change is just not very big relative to the baseline,” says William Gale, a senior fellow in economic studies at the Brookings Institution. “It’s relatively close to the status quo.”
Still, advocates for older and low-income Americans and those with disabilities say the weight of any cuts could fall more heavily on vulnerable populations. Some provisions will likely have a direct impact on 50-plus adults, notably a change in eligibility rules for the Supplemental Nutrition Assistance Program (SNAP), the federal nutrition benefit formerly known as food stamps.
In a May 31 statement, Ramsey Alwin, president of the National Council on Aging, says that the group is grateful the White House and congressional leaders headed off a “catastrophic” default while protecting Social Security and Medicare but that the resulting deal could increase hunger and reduce older adults’ access to community services.
Here’s how the SNAP change and other elements of the debt limit deal could affect older Americans.
Stricter SNAP requirements
The April House bill sought to expand work requirements for low-income people to receive benefits such as Medicaid, SNAP and Temporary Assistance for Needy Families. Most were not included in the Biden-McCarthy talks, but tighter rules for some older SNAP recipients were added.