Cost of MAGA Default: McCarthy’s ‘Red Line’ = More Aid Barriers That Only Do Harm

Washington, DC — The extreme MAGA House Majority is threatening to manufacture a catastrophic default crisis and economic collapse. To hold the economy hostage, the House passed a long list of hugely unpopular and extreme ransom demands that promise pain for millions of average Americans including veterans, seniors, students, children, workers, and the food insecure. They voted to ship 100,000 high paying manufacturing jobs overseas while going out of their way to protect wealthy tax cheats. The MAGA Majority’s proposed cuts are untenable, unworkable, and unserious, especially as they leave in place costly tax breaks for billionaires and big corporations. With the nation now projected to run out of money as early as June 1st, Accountable.US’ Cost Of MAGA Default’ project continues to underscore the catastrophic consequences of a MAGA default that grows closer by the day.

Today in focus: Speaker McCarthy’s Cruel and Counterproductive Red Line in Default Negotiations. Ahead of today’s White House default meeting, Speaker McCarthy has already signaled any “deal MUST include something on work requirements. He said it’s a red line for him.” The MAGA Majority default plan the House passed includes a Arkansas-style Medicaid work requirement as the model for national implementation – a policy that has done far more harm than good, massively increasing uninsured rates in the state without increasing employment. It also include more onerous barriers to SNAP food assistance that are similarly counterproductive, and House Republicans conveniently ignore the fact that work-rates are already high among SNAP households that are able to work and that SNAP “already has a harsh cut-off for unemployed workers without children.”  

WHAT YOU NEED TO KNOW: The MAGA Majority’s proposed hurdles for SNAP would put “millions of low-income adults [at risk of] losing their food assistance” despite studies showing that work requirements have “no measurable impact on employment or earnings.”

• PBS: A Congressional Budget Office Study Found That, As A Result Of Arkansas’ Medicaid Work Requirements, Many “Lost Their Health Insurance And Employment Did Not Appear To Increase.” “A Congressional Budget Office review last year of work requirements for Medicaid recipients said Arkansas was the only state where a work requirement was imposed for more than a few months. It found many of the targeted adults lost their health insurance and employment did not appear to increase. It said that while evidence was scant, research indicated that many were unaware of the work requirement or found it too onerous to demonstrate compliance. The CBO estimates that about 15 million people could be subject to the new Medicaid work requirements each year, although many would qualify for an exemption. About 1.5 million, on average, would lose federal funding for their Medicaid coverage, and of that group, about 600,000 would become uninsured.” [PBS News Hour, 04/26/23]
• The Proposed Work Requirements Were Seen As Part Of A “Broader Effort By Republicans To Rein In Spending On” SNAP, Despite Potentially Resulting In “Millions Of Low-Income Adults Losing Their Food Assistance.” “It’s part of a broader effort by Republicans to rein in spending on the Supplemental Nutrition Assistance Program, formerly known as food stamps, that expanded significantly during the Covid-19 pandemic, and it could result in millions of low-income adults losing their food assistance.” [Politico, 04/19/23]
• As Highlighted By The Center On Budget And Policy Priorities, Numerous Studies Have Shown That SNAP Work Requirements Have “No Measurable Impact On Employment Or Earnings.” “SNAP’s work requirement for adults not caring for children and without a disability ends up taking food away from people — with no measurable impact on employment or earnings, numerous studies have shown. And a study of Arkansas’s short-lived experiment with Medicaid work requirements found no evidence that the policy increased employment, but it did find that people who lost Medicaid coverage under the policy became uninsured.” [Center on Budget and Policy Priorities, 03/15/23]
• When Work Requirements Are Imposed, “People With Disabilities And Serious Health Needs Lose Benefits”––Even When They Are Exempt. “Even when exempt, people with disabilities and serious health needs lose benefits when work requirements are imposed. People with disabilities and other serious health needs — especially mental health conditions or substance use disorders — can lose coverage because of complex administrative requirements and a lack of assistance in filling out necessary paperwork to claim exemptions.” [Center on Budget and Policy Priorities, 03/15/23]
• Research Suggests That Work Requirements “Exacerbate Racial Disparities,” With “People Of Color At Greater Risk Of Losing Assistance” When Work Requirements Are Implemented. “Research and experience suggest these policies will exacerbate racial disparities. Economic security programs and Medicaid play an important role in reducing racial disparities. Taking benefits away from people who do not meet a work requirement will lead to fewer people receiving assistance, with people of color at greater risk of losing assistance. This will lessen these programs’ positive impact on racial disparities.” [Center on Budget and Policy Priorities, 03/15/23]
• According To Agriculture Secretary Tom Vilsack, The “‘Able-Bodied’ Group Of Low-Income Americans Without Dependents Receiving Assistance Is ‘Mostly Male And Mostly Homeless,’ Including Homeless Veterans.” “Agriculture Secretary Tom Vilsack recently told House Agriculture members who oversee SNAP that the ‘able-bodied’ group of low-income Americans without dependents receiving assistance is ‘mostly male and mostly homeless,’ including homeless veterans. People who have just aged out of foster care are also in the group. This population of SNAP recipients tends to have lower education levels, as well.” [Politico, 04/19/23]
• The CEO Of Feeding Texas Hailed SNAP As The “‘Biggest And Most Efficient Tool We Have For Fighting Hunger,'” Adding That “‘For Every Meal That The Food Banks Put On The Table In Texas, SNAP Puts Nine.'” “‘As in the rest of the nation, I want to emphasize that SNAP is the biggest and most efficient tool we have for fighting hunger,’ Celia Cole, the CEO of Feeding Texas, the state association for 21 food banks, said at a Texas field hearing. ‘In the broader ecosystem of hunger relief, it is doing the heavy lift. For every meal that the food banks put on the table in Texas, SNAP puts nine.'” [RollCall, 04/18/23] 

BACKGROUND: Accountable.US’ ‘Cost of MAGA Default’ project puts a daily spotlight on specific harms the MAGA Majority’s default plan and brinkmanship will bring for Main Street and Wall Street alike – from tanking markets, frozen credit, lost jobs, disruptions to critical benefits like Social Security, and soaring interest rates on everything from car loans to mortgages. While the MAGA Majority claims they are holding the economy hostage over supposed debt ‘concerns,’ they insist on harmful cuts – crafted by the far-right House Freedom Caucus – aimed at average Americans while protecting and even expanding debt ballooning tax breaks for billionaires and big corporations that profiteer and ship U.S. jobs overseas. Not a deadbeat nation: The U.S. has never failed to pay its bills and Congress worked to prevent default 78 times since 1960, including 3 times during the Trump administration. The clock is ticking. The MAGA majority should stop playing dangerous political games with American lives and the economy and responsibly pass a clean bill that allows the nation to pay its bills. The sooner they do, the less damage will be inflicted on Americans of all walks of life.