May 2023 – Budget Update

• Default on America Impact
• AFSCME Urges Congress to Increase the Debt Limit to Avoid Default

Last week, House Republicans passed a disastrous budget plan [H.R. 2811] that, if enacted, would cause permanent, lasting damage to a wide array of critical public service programs – everything from health care to child care to housing to nutrition assistance to veterans’ health care. Action now moves to the Senate where we expect the House-passed Default on America Act to be DOA. The Senate must work to ensure these drastic cuts in this catastrophic proposal never become law.

Default on America Impact

Unfortunately, the House GOP leadership is engaged in brinksmanship with their budget plan that could ultimately force a devastating default that could disrupt Social Security and Medicare payments, and cause higher interest rates on items like credit cards, car loans and mortgage rates. Here are some basic facts about the impact of the proposal on programs AFSCME members and our communities depend on:

• Threatens 22% cuts to education, veterans’ health care, child care and opioids treatment.
• Cuts Medicaid for two million people. 
• Evicts hundreds of thousands of families, older adults, veterans and people with disabilities from Section 8 housing and cuts rental assistance.
• Takes away food assistance from more than one million seniors and 1.2 million women, babies and children.
• Takes away health care access for two million people via Community Health Centers, disproportionately impacting rural areas.

AFSCME Urges Congress to Increase the Debt Limit to Avoid Default

We are urging Congress to increase or suspend the debt limit as soon as possible to avoid a default that would cause an unfettered economic catastrophe with a steep rise in interest rates, further destabilize U.S. banks, trigger enormous job losses and losses in household wealth and cause a global financial panic. According to Mark Zandi, Chief Economist at Moody’s Analytics, a deal requiring massive cuts to government programs would trigger a severe recession and a loss of 2.6 million jobs.

Robust, sustained federal investments, funded by fair revenues, are essential to state and local economies and the delivery of needed public services. State and local governments are already facing fiscal cliffs as significant pandemic aid ends this fiscal year, even while many needs persist. Congress should make the rich and corporations pay their fair share, not cut critical services.