Update: Final Budget Vote Could Come Soon

 

A final conference budget resolution could be voted on during the last week of April.  House and Senate budget negotiators are reportedly close to an agreement, and there is pressure to produce a final resolution and vote on it before the Senate leaves on recess the following week.  This may be our final chance to tell Congress that it is unacceptable to balance the budget on the backs of the poor and vulnerable while protecting the wealthiest.  A new sample letter is available on our action website that makes it easy to do just that.

 

Media reports indicate that the negotiators are considering cutting $10 billion from Medicaid over the next five years, an even larger cut than the President requested, despite the fact that 45 million Americans are already without health insurance.  They are also discussing whether to include the full $18.7 billion in cuts passed by the House to the Earned Income Tax Credit, Supplemental Security Income, Food Stamps, TANF, child care, child support collections, and services for abused and neglected children.  The Coalition on Human Needs has provided a table indicating how many people in each state are served by each of these programs and could be impacted by the cuts.

 

Proponents of these cuts try to justify asking low-income children and families to sacrifice by pointing to the growing budget deficit, but the truth remains that irresponsible tax cuts are the primary cause of the deficit, not assistance for low-income families.  In fact, media reports indicate that negotiators will include $70 billion in new tax cuts in the final budget -- most of which will benefit the wealthiest households -- for a likely net increase in the deficit. 

 

The National Advocacy Center rejects the priorities exhibited in this budget process as immoral.  When those in need in our society are marginalized and neglected, the wellbeing of the entire community is affected.  For more information, check out our detailed budget analysis below and here.  Also, two recent reports, Working Hard, Falling Short and Trends in Parents’ Economic Hardship, provide a detailed look at some of the problems and injustices this budget fails to address.

 

 

March 2005

 

Update: House and Senate Resolutions Passed

 

Both the House and Senate budget resolutions have now been finalized and narrowly passed. Amendments to the Senate resolution eliminated cuts to Medicaid and the Community Development Block Grant (CDBG), and restored some funding for other programs in the Senate budget resolution. Unfortunately, both budget resolutions still fall far short of the standards to which we believe our nation should be held - they still contain many deep cuts to vital human needs programs and push for additional, expensive tax cuts for those least in need. Results provides all the details about the finalized House and Senate budget resolutions.

Once members return from their two-week recess, a committee still must meet to work out the differences between the House and Senate resolutions and produce a final compromise that the full House and Senate must approve.  In other words, there is still time to influence your members of Congress to demand the best possible final Congressional budget resolution.  We have put together some suggestions for action.

 

Congressional Budget Resolutions Going to the Floor

 

This year’s budget process is moving quickly. During the week of March 7^th, the House and Senate Budget Committees completed work on their respective budget resolutions.  These will now be sent to the floor in both chambers for approval before Congress adjourns for its spring recess (March 21-April1). Disappointingly, neither the House nor the Senate budget resolution represents an improvement over the President’s budget, and on some points both are worse.

 

Discretionary Spending

 

Both the House and Senate numbers for discretionary spending closely track the President’s proposal. All would call for over $200 billion in cuts^[i] to domestic discretionary programs outside of defense and homeland security over the next 5 years. The cuts would hit community development, education, housing, Head Start, child care, veterans' benefits, community services and many other programs. In 2010 alone, those cuts amount to 14 percent below the level of current services under the House resolution, adjusted for inflation (13 percent under the Senate resolution).

 

Mandatory/Entitlement Spending

 

The House and Senate budget resolutions both call for larger cuts to mandatory programs than the President’s budget.  The House would require a total of $67 billion in cuts and the Senate $38 billion over the next five years, roughly half of which would likely come out of programs serving low-income populations. The budget resolutions do not specify exactly which programs would suffer cuts – instead they give instructions (called reconciliation instructions) to the authorizing committees to find the savings in programs under their jurisdiction.  The Coalition on Human Needs and the Center on Budget and Policy Priorities^[ii] provide a breakdown of what cuts could occur:

 

Medicaid

 

The Senate resolution as proposed by Chairman Gregg directs the Finance Committee to cut $15 billion over the next five years. The Finance Committee has jurisdiction over Medicaid, TANF, EITC, and SSI, but it is expected the cuts will primarily hit Medicaid.

 

The House resolution directs the Energy and Commerce Committee to cut $20 billion. These cuts are expected to come from Medicaid.  

 

Most states are struggling to fund their share of Medicaid’s costs, and a number have already taken steps to reduce coverage or benefits.  Proposals that would reduce the federal commitment to Medicaid would increase the pressures that states are facing, and likely lead to additional and larger reductions in Medicaid.  The end result would likely be to increase the number of low-income people in the United States who are uninsured or underinsured.

 

Income Security

 

The House would cut $18.7 billion over five years from the Ways and Means Committee. This committee has jurisdiction over Medicare, the Earned Income Tax Credit, Temporary Assistance for Needy Families (TANF), child welfare programs, child support, and SSI.

 

It is not clear what would be cut. The President has rejected cuts to Medicare, and it appears likely the committee will cut the EITC, but any program in their jurisdiction is at risk.

 

Food Stamps

 

The Senate would cut $2.8 billion from its Agriculture Committee.

 

The House would cut $5.3 billion over five years from the Agriculture Committee.

 

These cuts could come from Food Stamps and/or from farm subsidies.

 

Education and Pensions

 

The Senate would cut $8.6 billion from the Health Education, Labor, and Pensions Committee over the next five years.

 

The House directs the Education and Workforce Committee to cut $21 billion over five years.

 

These cuts could come from reduced subsidies to student loan lenders and changes to pension programs. Employers may object to the pension changes, perhaps putting other programs – such as child nutrition – at risk.

 

Taxes

 

At the same time these deep cuts are proposed, both the House and Senate budget resolutions call for additional tax cuts ($106 billion over five years in the House, $71 billion over five years in the Senate), even though tax cuts are the largest factor contributing to current deficits.  Moreover, the tax cuts proposed (extensions of dividend and capital gains tax cuts) overwhelmingly benefit those with the highest incomes – while the program cuts disproportionately affect lower-income populations.

 

The Deficit?

 

Despite all the talk about reducing the deficit, the President’s budget and both congressional budget resolutions would actually increase the deficit over what it would be if no policy changes were made. Over the next five years, total deficits would be $106 billion higher under the President’s plan, $127 billion higher under the House plan and $130 billion higher under the Senate plan, than if current policies were continued.  A key reason for the increase in the deficit is the tax cuts the proposals contain.  In addition, these proposals, because they only cover the next 5 years, mask the long-term deficit problems caused by the tax cuts. The Congressional Budget Office estimates that continuing the tax cuts enacted in 2001 and 2003, as the President’s budget proposes, would increase the deficit by $1.4 trillion from 2011 through 2015.

 

NAC View

 

All of the problems found in the President’s budget (NAC analysis) are also present in the current congressional budget resolutions.  Proposals that cut programs that serve as a lifeline to children, our elderly parents, and people who are the most vulnerable, while expanding tax cuts for the most affluent is simply wrong.  A budget that protects the interests of those least in need while requiring sacrifice from those who can least afford it is morally untenable. We can do better. As a nation, we have the resources to ensure every person is free from hunger, has access to quality healthcare, can live in an affordable and decent home, receives the education necessary for work that pays a livable wage, and lives in a safe community.  Investing to make these things a reality reflects the best of our values. 

 

 TAKE ACTION NOW!!