June 7, 2023
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President Biden recently signed the 2023 Debt Ceiling Deal. This significant legislation plays a crucial role in preventing the U.S. from defaulting on its debt, effectively serving as a safety net for our economy and protecting us from a potential global financial disaster.
Who's Cutting Back?
The 2023 deal includes several components. One notable aspect is the introduction of new restrictions on federal spending, potentially affecting infrastructure, social programs, and climate change plans. On the defense front, a modest increase of 3% has been agreed upon, raising the budget to $886 billion in 2024. This rise, however, doesn't meet the expectations of some members of the Republican party. The remaining government spending is largely stable in 2024, with a slight 1% increase projected for 2025.
COVID-19 Relief Funds: Round Trip
A noteworthy element of the deal is the redirection of approximately $28 billion in unspent COVID-19 relief funds back to the Treasury. $5 billion is being allocated to the research and development of new COVID-19 vaccines and treatments.
Shaking Up Work Requirements for Government Aid
The agreement also brings changes to work requirements for recipients of two major government aid programs: SNAP and TANF. These changes primarily impact low-income Americans and will differ based on factors such as age and location.
SNAP will now apply work requirements to more individuals. By 2025, these stipulations will pertain to people aged between 18 and 54. However, there are exemptions for veterans, people experiencing homelessness, and young adults who were formerly in foster care.
Alterations are also being made to the credits states can receive for reducing the number of TANF cases. From October 2025, the reduction in case numbers will be compared to 2015 levels rather than those of 2005. This change challenges states to increase their efforts in ensuring more families are gainfully employed.
What's Next on the Horizon?
The 2023 Debt Ceiling Deal carries both resolutions and points of contention. It resolves political stand-offs and averts potential fiscal crisis, yet it also ignites political division. With the deal set to expire at the end of 2025, it simply places a bandaid on an ever growing issue. The course of this journey remains to be seen.
Awareness of these changes is critical. Understanding how these legislative decisions can impact you is key to successfully navigating these uncertain times. Whether you're worried about decisions made on capital here, market volatility or planning for your financial future, we're ready to help you navigate these complex issues.
We don't just want you to understand these legislative decisions; we want you to leverage them to your advantage. Interested? Contact us to learn more.
