By Katy Savage
Sen. Peter Welch sounded off his concerns about the nation’s first potential debt default — a measure that could have a catastrophic impact on food security, Welch said, as he spoke to a crowd of 200 people at the Vermont Foodbank’s annual Hunger Action Conference at the Killington Grand Hotel on Friday, May 5.
“We’re in a dangerous moment right now,” Welch said. “We’ve got folks who are saying for the first time in the history of our country we’re going to default unless we take this House bill that slashes the budget.”
Among the many repercussions of a debt default, “There would be no Farm Bill,” Welch said.
Welch, who sits on the Senate Agriculture Committee, is currently working on the 2023 reauthorization of the federal Farm Bill. The bill is renewed every five years and is expected to allocate $709 billion between 2024 and 2028. A large portion of the bill is focused on food security policies like SNAP (known in Vermont as 3SquaresVT), the Emergency Food Assistance Program and the Commodity Supplemental Food Program for older adults. The bill also focuses on policies for farming, forestry, climate change and conservation.
The Farm Bill is one program that would likely be in jeopardy as the nation could default on its debt as soon as this summer. Treasury Secretary Janet Yellen has written letters to House Speaker Kevin McCarthy in which she stated that the nation’s outstanding debt has reached its statutory limit of $31.4 trillion for the first time in the nation’s history. Yellen further informed McCarthy that her agency would implement measures to avoid a default through June 5.
Meanwhile, economists have cautioned the default would wreak havoc on the economy.
“History is clear that even getting close to a breach of the U.S. debt ceiling could cause significant disruptions to financial markets that would damage the economic conditions faced by households and businesses,” according to a May 3 summary by both the Congressional Budget Office and the U.S. Department of the Treasury.
House Republicans said they’ll raise the debt limit but only with budget cuts — something President Joe Biden said he won’t negotiate on.
“They haven’t figured out the debt limit yet,” Biden said at a press conference at the end of April. “I’m happy to meet with McCarthy, but not on whether or not the debt limit gets extended. That’s not negotiable.”
Welch, who was elected to the Senate in 2022 in place of Sen. Patrick Leahy, spent 16 years in the House. He was relieved to be in his new role.
““The House is a wild place right now,” Welch said after his speech at the conference. “You’ve got a majority that doesn’t have much of an agenda other than using the threat of a default.”
Sitting in the lobby of the Grand Hotel after his speech, Welch further called the default “the most alarming thing I’ve seen. There’s a group in the House that does not believe there would be any problems if we defaulted on the debt. They think they’d wake up the next day and things would be normal. Well, it’d be a disaster. We wouldn’t have a Farm Bill first of all. It would completely destabilize the economy and virtually cause a recession overnight.”
Despite the concerns, Welch and his colleagues continue to work on the Farm Bill.
Welch also recently proposed a 30% increase in SNAP benefits.
“More than 70,000 Vermont families rely on SNAP benefits to put food on the table—but even with that support, far too many people are still struggling to make ends meet,” said Welch in a statement. “The Closing the Meal Gap Act will cut through red tape that stops families from getting the help they need.”
He was hoping to pass the Farm Bill by September but said there was much work left to do and to “count me as skeptical” it would get done by that time.
The room at the Grand Hotel on Friday was filled with government officials, food security advocates, service providers and administrators from around the state who networked and shared knowledge to creatively address the issue of hunger.
“Covid is in the rearview mirror at this point,” Welch told the crowd. “Hunger is not. No Vermonter should ever have to choose between keeping the lights on and putting food on the table—but that’s the reality for far too many people across our state… Recent threats to slash funding for food assistance programs and food banks are unacceptable.”
