Women Lost in the Debt Ceiling Deal

Aug 3, 2011Bryce Covert

Although the deal averts a painful default, many of the cuts will fall on the backs of struggling women.

The debt ceiling debate has finally come to a close. We are clearly all better off in a country that doesn't default on its debt because of self constraints and intense partisan bickering.

But the deal that was struck and signed into law by President Obama that averted the default will have painful repercussions for many of the less well off and vulnerable. It calls for $2.4 trillion in spending cuts over the next 10 years, as well the creation of a bipartisan Congressional committee that will be charged with proposing another $1.5 trillion in deficit reduction. This is in exchange for a two-step increase in the debt ceiling, averting the chaos of a US default. These cuts will harm many groups, but there are a number of ways they'll hurt women specifically.

The first, immediate $1 trillion in cuts come from capping discretionary spending, with more than half non-defense -- i.e. mostly shielding the Pentagon. The White House has said these caps "will put us on track to reduce non-defense discretionary spending to its lowest level since Dwight Eisenhower was President" in the 1950s. But what falls under "non-defense discretionary spending"? While the category sounds amorphous, it funds real programs that women rely on. As the National Women's Law Center puts it,

The discretionary portion of the federal budget requires annual appropriations to fund programs that help women protect their health, obtain quality child care and higher education, and help them meet their basic needs during difficult times and as they age -- including Head Start, child care, K-12 education, family planning and other women's health services, domestic violence prevention, job training, Pell grants, and services for the elderly.

Specifically, some of the largest portions of this spending directly affect women. Education is the largest (16.3%), and cuts to this funding mean teacher layoffs among other things. The category that includes child care and education and nutrition assistance is quite substantial at 7.6%, hitting women who rely on subsidies as they struggle to raise their children.

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The next level of cuts will come from the so-called "super-committee" that will propose another $1.5 trillion in reductions over ten years. Those recommendations could very well include further cuts to discretionary programs, as well as cuts to entitlements and revenue increases. Beyond being hit by cuts to discretionary spending, women will get smacked by scaling back entitlement programs. They rely heavily on these programs: in 2007, they were about 70% of the elderly and 80% of younger adults who relied on Medicaid; they make up more than half of those with Medicare; and for nearly three in ten women 65 and older who receive Social Security, it's their only source of income.

And women will get hit one more way: in the trickle down effects from the deal. It doesn't call for immediate cuts to the federal workforce, but as government agencies and programs have to cope with smaller budgets, they may have to turn to furloughs or layoffs. On top of this, mayors and governors are anticipating far less aid from the federal government to help them cope with budgets ravaged by falling tax revenues and rising output for unemployment and other benefits caused by high unemployment. Their tight budgets have already lead to huge layoffs in public sector workers. Women make up over half of the public workforce -- and have lost 343,000 public-sector jobs, accounting for 70 percent of the cuts between June 2009 and June 2011. This is a big factor in why women are losing jobs during the recovery while men are making gains (even if they're small). Further shrinking government budgets will ensure women lose more jobs.

Overall, the country is better for a deal that averted a government default. In that scenario, everyone would have been hit by higher interest rates at the very least. But the deal itself hurts women at a time when everyone is already suffering.

Bryce Covert is Assistant Editor at New Deal 2.0.

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