The way society responds to the needs of the poor through its public policies is the litmus test of its justice or
injustice.
U.S. Catholic Bishops, Economic Justice for All, #123
Another Chance to Defeat Reconciliation
Despite
Republican congressional leaders’ hopes of sending the budget reconciliation conference report (S.1932) to the President
for his signature before the end of last year, the House of Representatives will have to take one more vote on the bill on
February 1st. This vote is necessary because the Senate, which passed
the legislation on December 21st with the help of Vice President Cheney’s tie-breaking vote, made several
small changes to the conference report that require the approval by the House. In
the previous House vote, the conference report passed 212-206, but when the vote occurred before 6:00am on the morning of
December 19th, 16 Representatives were absent and members had only had a few short hours to review the 774 page bill and weren’t fully aware of the extent of the cuts and the hardship it will impose on low-income
families and individuals. The February 1st vote will give Representatives
one more chance to redeem themselves and to put an end to the cuts in mandatory programs that we have been fighting for the
past year.
The
following is a breakdown of some of the cuts and harmful policy changes included in the budget reconciliation conference report. In some cases, these cuts are even worse than those originally included in the harmful
House version of the bill.
Medicaid – Increases in co-payments
and premiums and reductions in benefits for a gross total of $42 billion in cuts over the next 10 years
- Low-income beneficiaries (including 6 million children) would be required to pay more out-of-pocket for health care services and prescription drugs and could see reductions in the services that are covered by Medicaid. Depending on income, beneficiaries could see co-payments increase from a standard of
$3 per service or medication to as much as 20% of the cost of the needed medical service (e.g., for a typical inpatient hospital
day at a cost of $1,000 to $1,600, a co-payment could increase to as much as $200 - $320). In addition, the agreement would
for the first time allow providers to deny beneficiaries needed medications and services if they are unable to afford increased
co-payments and allow states to terminate eligibility for those unable to pay new premiums. (Center on Budget and Policy Priorities)
- States would be allowed to cut back on benefits for nearly all of the 28 million children now enrolled in Medicaid, including
those living in families with incomes below the poverty line. (Center on Budget and Policy Priorities)
- Anyone
(no exceptions) applying or reapplying for Medicaid would be subject to a new “proof of citizenship” requirement
to produce either a passport or birth certificate in order to be eligible. This
provision was sneaked in by anti-immigrant forces to supposedly “fix” a problem (ineligible immigrants falsely
claiming citizenship in order to obtain Medicaid) that the Inspector General of the Department of Health and Human Services
indicates doesn’t exist. This new requirement will however increase administrative burdens and if even
as little as 2% of beneficiaries are unable to produce documentation, one million low-income Americans could lose Medicaid (and become uninsured) or be delayed in receiving coverage. (Center on Budget and Policy Priorities)
Child Support – Reduces federal
funding for child support enforcement by $4.9 billion over the next ten years, resulting in $8.4 billion in child support
going uncollected over the same period. (Center for Law and Social Policy)
Foster Care – Cuts hundreds of
millions from Title IV-E federal foster care assistance, primarily affecting abused and neglected child care for by grandparents
or other relatives. (Child Welfare League of America)
TANF – Imposes even more restrictive,
expensive, and unrealistic work requirements and grant the federal Department of Health and Human Services vast new authority
to regulate how state operate their welfare-to-work programs
- The Congressional Budget Office (CBO) has estimated that it will cost states $8.4
billion over the next five years to meet the new work participation requirements imposed by the bill. This will force states to shift resources away from child care and other non-cash assistance to fund new work costs and will lead to over a quarter
million children in working families losing child care assistance by 2010.
(Center on Budget and Policy Priorities and Center for Law and Social Policy)
- States will no longer have the flexibility to design their own state-funded welfare
programs because these programs will now have to meet the strict new federal work requirements. States generally use these programs (funded entirely from state revenues) to help families for whom even the current work
requirements are inappropriate – families with severe barriers to employment such as a member with a disability, a parent
with mental illness, or very low educational attainment. (Center on Budget and Policy Priorities)
Student Loans – Cuts a net of
$12.7 billion from federal student loan programs – the largest cut in student aid in the history of the programs.
- 70% of the savings in the conference report comes from overcharging student and
parent borrowers with higher fixed interest rates. An average student borrower
(with $18,000 in student loans) will see increased interest costs of $2600 for a 15-year repayment plan. (United States Student Association)
Where Savings Didn’t Happen
In looking
at these cuts, it is important to also remember what Congress chose NOT to do – to follow the original proposals by
the Senate and achieve budget savings in ways that did not harm low-income families and individuals. Savings from reductions in Medicaid prescription drug costs and ending a Medicare managed care “slush
fund” were excluded due to significant pressure from the powerful pharmaceutical and managed care industries even though these savings could
have prevented ALL of the Medicaid cuts mentioned above.
The Myth of Deficit Reduction
Although
called the “Deficit Reduction Act of 2005,” the legislation including the cuts listed above will actually do nothing to reduce the deficit because Congress is planning another reconciliation
package before spring that will provide at least $60 billion more in tax cuts (overwhelmingly going to the wealthiest Americans) and more than wipe away the “savings” from the spending cuts. Essentially, low-income individuals and families will receive less health care, fewer
children will receive child support, child care, and foster care assistance, and students will face higher loan costs in order
to help finance more tax breaks for those least in need in our country, not to
decrease the burden of debt on future generations. This again highlights the
misplaced priorities of our current government leadership and the need for a more honest debate about economic justice and
the needs our country is facing.
For More Information
Past Budget Updates
Emergency Campaign for America’s Priorities – New Provisions in Reconciliation, Worst Provisions in Budget Reconciliation (PDF files)
Center
on Budget and Policy Priorities – Federal Budget Series
The obligation to provide justice for all means that the poor have the single most urgent economic claim on the conscience
of the nation.
- U.S. Catholic Bishops, Economic Justice for All, #86
