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Spending Deal Would Keep Social Security Budget Flat

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The $1.66 trillion government spending bill that took shape over the weekend would likely result in flat funding for the Social Security Administration, if it holds, according to Maria Freese, senior legislative representative at the National Committee to Preserve Social Security and Medicare.

While there is no omnibus spending bill yet, the deal — which sets out $886 billion for defense and $733 billion for non-defense spending for fiscal 2024 — “would effectively keep domestic spending at 2023 levels, along the lines of the deal to keep the federal government from defaulting last year,” Freese told ThinkAdvisor on Monday.

Social Security actually needs “a boost in their budget in order to properly serve customers,” Feese said, “so flat-funding for SSA would result in deteriorating customer service, which is already problematic.”

New Social Security Commissioner Martin O’Malley “would have to find a way to do more with less,” according to Freese. 

Senate Majority Leader Chuck Schumer, D-N.Y., said Sunday in a statement that the bipartisan topline appropriations agreement struck with House Speaker Mike Johnson, R-La., “clears the way for Congress to act over the next few weeks in order to maintain important funding priorities for the American people and avoid a government shutdown.”

By keeping the budget cuts for the Internal Revenue Service at $20 billion, Schumer said that he’s ”happy to say this agreement will not affect the IRS’s ability to keep holding the richest tax cheats accountable.”

Schumer added that “we have made clear to Speaker Mike Johnson that Democrats will not support including poison pill policy changes in any of the twelve appropriations bills put before the Congress.”

Raymond James analysts added Sunday in their Washington Policy newsletter briefing that “these are ‘top line’ numbers and Congress will still need to draft the legislation before a vote can occur.”

“Key policy initiatives, supplemental military funding for Israel, Ukraine, and Taiwan, as well as a push for the extension of expired tax provisions (including the R&D and child tax credits) remain unresolved aspects of negotiations,” they said.

The first deadline is Jan. 19, with the expiration of funding for four of the 12 appropriations bills, with the remaining eight expiring on Feb. 2, the analysts said.

The deal “is very similar to what was passed into law last June as part of the deal to raise the debt limit,” according to the Raymond James analysts. “The House and Senate Appropriations Committees now need to draft the bills and make key policy decisions on what funding priorities are included within these topline numbers.”

Tax Measures

Jeff Bush of The Washington Update added in a recent email to ThinkAdvisor that the tax bill could come early in January.

“It’s a resurrection of the same debate Congress held in 2022″ over extending provisions such as the enhanced child tax credit and the research and development credit, Bush said. “Realistically, they need to get these done” by Jan. 29, when the tax filing season opens.

It’s also possible, Bush added, that a bill with corrections to the Secure 2.0 Act could be included.

“This is a heavy legislative lift, with Congress’s attention focused on the budget deadlines” of Jan. 19 and Feb. 2, Bush said.

“If it looks like this [spending] deal would move,” lawmakers could attach the tax bill, Freese added.


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