This week negotiations on increasing the federal debt limit intensified as Vice President Joseph Biden oversaw three separate sessions seeking compromise. The negotiations include proposals for major reductions in federal spending and changes to the Medicaid program, both of which would have serious consequences for child welfare programs. These meetings signify a turn in the negotiations and signaled there might be significant progress. It remains to be seen what decisions are being made as to spending reductions and programmatic changes. It’s not clear yet when negotiations might wrap up.
Meanwhile the House Judiciary Committee passed legislation (H.J. Res. 1) last Wednesday for a constitutional amendment for a balanced budget. House leaders are pushing for a balanced budget requirement to be included in any agreement on raising the debt ceiling. This bill requires the federal budget to be balanced every year. It sets a limit on expenditures to 18% of gross domestic product, down from the current level of 24%, and it would set strict conditions to enact tax increases. The Senate has not taken up this or any similar bill yet.