Editor’s Note: This article was originally published in Keep It Rural, an email newsletter from the Daily Yonder. Like what you see? Join the mailing list for more rural news, thoughts, and analysis in your inbox each week.
Out of the Frying Pan and Into the Fire.
Or, the Never-Ending Story of the Debt Ceiling.
Last week, the U.S. government narrowly passed a bipartisan deal that suspended the country’s debt limit to avoid defaulting – or failing to meet the legal obligations of paying back a loan – on the money it has borrowed from Treasure security holders; i.e., other countries.
Had the government defaulted on its debt, many financial experts say it could have triggered a deep recession, causing ripple effects that would be felt all across the country and the world. Apart from negative effects on the broader economy, it also would have suspended Social Security payments, leaving millions of seniors without income.
The government hit its limit for the outstanding federal debt – $31.4 trillion – in January of this year and was implementing “extraordinary measures” to postpone paying this debt, but only until June 5. These measures included underinvesting in the Civil Service Retirement and Disability Fund for federal employees and pausing investments in the Postal Service Retiree Health Benefits Fund, according to a letter from Secretary of the Treasury Janet Yellen.
With the new agreement, the federal government’s borrowing limit is suspended until January 2025. Decisions regarding climate, food, defense, labor, student loans, and taxes were written into the package, affecting rural people in ways both obvious and indirect.
Eligibility requirements for the federal Supplemental Nutrition Assistance Program (SNAP) were changed by the deal to increase the age window in which non-disabled adults are required to prove they worked 80 hours a month or are enrolled in a job training program. Previously, adults ages 18-49 years-old were required to prove this; now, adults up to 54 years-old will need to prove the hours they worked in order to receive SNAP benefits. According to the Food Research and Action Center, these benefits are most used in rural areas at 16% of households versus 15% in small town counties and 13% in metropolitan areas.
There is also the decision to maintain full funding for veterans’ healthcare and increase funding for a toxic exposure fund for veterans by $15 billion. For the 25% of all veterans who live in rural America, this funding assures they will continue to receive support.
The bill maintains the climate and clean energy provisions established by the Inflation Reduction Act that allocates funding to rural communities, but this is the legislation’s only environmental measure. The bill expedites a natural gas pipeline that will span 303 miles from northwestern West Virginia to southern Virginia, building out gas infrastructure in several rural communities including Wetzel, Braxton, and Fayette counties, West Virginia.
Overall, the debt ceiling agreement is far from revolutionary for either party. It represents the compromise that debt negotiations are known for, which often pisses off members of Congress from the farther reaches of the political spectrum: Right-wing House Freedom Caucus members like Arizona’s Andy Biggs and Colorado’s Ken Buck were strongly against the compromises reached in the bill, as were liberal senators John Fetterman, Ed Markey, Jeff Merkley, Bernie Sanders, and Elizabeth Warren. The debt ceiling has been criticized by many scholars as an excuse for “political football” between Republicans and Democrats who use these negotiations as a way to pass legislation that may not have otherwise been greenlit if the threat of defaulting on the debt limit weren’t hanging over people’s heads.
Criticism aside, a debt crisis has been averted. Until 2025, that is.
Rural Reading List
Georgia has lost an estimated 90% of their peach crops due to climate change, marking an identity and economic crisis for a state known for its juicy fruits.
Remember all that precipitation in the West earlier this year? Well, it looks like the “big melt” climatologists were predicting to come out of the Sierras and flood California’s Central Valley may be less catastrophic than feared.
Rural communities are no stranger to dollar stores and their effect on the local economy. Some say the stores — disproportionately found in rural, low-income, and Black areas — stifle economic growth and job creation, and exacerbate food insecurity.
One More Thing: The Medicaid ‘Purge’
State Medicaid offices are evaluating whether the people currently enrolled in their programs are actually eligible for the health benefits they’re receiving, a process that occurred regularly prior to the pandemic but was paused during the Covid-19 health emergency. Some insurance experts say millions of people might lose health coverage in the coming months during this redetermination process.
Already, many people have been kicked off their health insurance plans since the process started in April in some states. According to KFF Health News, most people who no longer have coverage were removed due to technicalities like missing paperwork, not because they are outside the income range to qualify.
As this Medicaid “purge” continues, rural communities will undoubtedly be affected: 17% of total beneficiaries are from rural areas, according to the Medicaid and CHIP Payment and Access Commission.
Check your paperwork, folks.