As soon as June 1, the federal government will run out of money to pay its bills. Unless Congress raises the debt ceiling and allows the Treasury to borrow money for spending already approved by Congress, the United States will default on its financial obligations.
House Republicans passed a bill on April 26 that would raise the debt limit, but it comes with a number of stipulations, including broad cuts to federal spending.
The bill is likely to fail in the Democrat-controlled Senate, making it mostly a starting point for negotiations on the debt ceiling issue. VERIFY viewers like Tom wanted to know whether the proposed cuts would affect veterans’ benefits, administered by the federal Department of Veterans’ Affairs (VA).
Does the House Republicans’ debt ceiling bill cut veterans’ benefits?
- Limit, Save, Grow Act of 2023
- Department of Veterans Affairs
- House Majority Leader Steve Scalise (R-La.)
- Congressional Budget Office
- David Wessel, Director of the Hutchins Center on Fiscal and Monetary Policy at Brookings
The text of the bill as passed by the House does not specifically cut the budget of the Department of Veterans Affairs. But it does mandate broad federal spending cuts and does not exempt the VA from those cuts.
WHAT WE FOUND
The GOP proposal is called the Limit, Save, Grow Act of 2023. It passed the House on a narrow party-line vote, with 217 Republicans voting in favor, and four Republicans joining 211 Democrats in voting against.
Of the bill’s 316 pages, three deal with raising the debt ceiling and nine deal with capping federal spending. The rest address other Republican priorities.
The spending cuts come primarily via a cap on discretionary spending. That’s federal spending approved through the annual appropriations process. It’s called “discretionary” because it differs from mandatory spending – like Social Security – which is approved through previously existing laws. There’s also supplemental spending – like the COVID stimulus package – which is approved individually outside the annual process.
“[Discretionary appropriations] are the bills that fund government salaries, electricity for all government offices, they pay for bullets and missiles, they pay the rent on offices the government rents,” said David Wessel, a senior fellow in Economic Studies at the Brookings Institution.
The Republican plan places an overall limit on discretionary spending. According to the Congressional Budget Office, the bill would require $3.6 trillion in cuts over the next decade.
For instance, the CBO calculated that currently, Congress has authorized about $1.91 trillion in discretionary spending for 2024. The CBO estimates that the GOP bill would reduce that authorization to about $1.68 trillion, a nearly $230 billion dollar cut for 2024.
So where would those cuts come from? The bill doesn’t say. Decisions about where cuts would actually be made would have to come via the appropriations process.
“It's very easy to say ‘I want to cap discretionary spending, and I'll figure out later what gets cut.’ The people who propose the caps do this on purpose because they don't want to pick and choose; they don't want to make enemies of people whose programs are going to be cut,” said Wessel. “And the people who oppose the cap say, ‘well, if you impose this across the board, XYZ is going to be cut.’ There’s no way to win that argument.”
The Biden administration says at least some of the cuts would affect veterans’ benefits; House Republicans dispute that.
Prior to the bill’s passage in the House, the Department of Veterans Affairs issued a press release containing an analysis of how the cuts could affect veterans’ benefits.
The analysis assumed a 22% cut, even though the CBO estimated the total cuts would be 15.7%. That’s because the VA assumed none of the cuts would be made to defense spending, and so other departments would have to take on an increased burden. Republicans say they will not approve cuts to defense spending, but the text of the bill does not specifically exempt the military from reductions.
The VA warned that cuts of that magnitude would reduce veterans' access to healthcare, require staff cuts, cause longer wait times for veterans, cause VA infrastructure to deteriorate, and delay needed technological updates.
The text of the bill does not, however, specifically mandate a 22 percent cut to the VA or any other department. Although, as with defense, it does not specifically exempt the VA or any other department from budget reductions either.
Following the VA’s warnings, House Republican leaders stated they would not allow cuts to veterans’ benefits or to the military, and accused the Biden administration of purposefully mischaracterizing the bill.
“As the majority leader, I will not bring a bill to the floor of the House… that cuts our veterans,” House Majority Leader Steve Scalise said in an interview April 30 on ABC’s This Week.
Wessel says broad-but-vague caps like this one have been instituted by Congress before, with mixed results.
“In the early 1990s, this was done, and Congress did a pretty good job of living within the caps. It's a way of tying its own hands,” he said. “[The caps] can't be ignored. But they can be maneuvered around, because whatever Congress says one year, they can undo the next year.”