McCarthy's Plan Targets Agency Budgets and Benefit Programs
McCarthy's plan, which he presented as a condition for raising the United States' $31.4 trillion debt ceiling, proposes cutting agency budgets by 7% this year and capping their growth by 1% annually after that. It also includes imposing stricter work requirements on some benefit programs, potentially reducing the number of recipients.
Trump-voting States Could Suffer Most from Domestic Spending Caps
A Reuters analysis suggests that domestic spending caps in McCarthy's proposal might impact states that supported Republican President Donald Trump in the 2020 presidential election the most.
Federal Aid Distribution Factors in Poverty and Taxes
Federal aid distribution considers factors such as poverty, leading to wealthier Democratic-leaning states receiving fewer funds per capita than Republican-leaning states, according to Marcia Howard, executive director of Federal Funds Information for States.
Spending Caps May Impact Trump-voting States' Population Growth
With McCarthy's proposed 1% annual increase not keeping up with inflation or population growth, Trump-voting states might experience more significant repercussions due to their higher population growth rates than Biden states.
Uncertainty Surrounds Social Security and Defense Caps
While McCarthy's spending cuts wouldn't reduce Social Security retirement benefits, it is unclear if the caps would apply only to domestic programs or include military and veterans programs.
Work Requirements Impact on Republican-leaning States
Stiffening work requirements for benefits programs like SNAP could disproportionately affect Republican-leaning states, with 3.1% of their population potentially losing benefits compared to 2.8% in Biden states, according to a Reuters analysis of data compiled by the Center for Budget and Policy Priorities.