|
November 2005
Budget Reconciliation: Where We Are Now
After a delay of several weeks, Congressional leaders are now pushing to complete
work on budget reconciliation packages that include a wide range of mandatory* spending cuts and the potential for more tax cuts. The full Senate will
vote on its package of spending cuts, totaling $39 billion in savings, the week of Oct. 31st and may begin work
on a tax reconciliation package in committee the same week. The House is scheduled
to vote on an even larger package of spending cuts totaling at least $50 billion the week of the November 7th and
may begin work on tax cuts the following week.
The House and Senate spending reconciliation bills differ not only in size,
but also in content. In important victories for human needs advocates, the Senate significantly scaled back cuts to Medicaid
and eliminated cuts to Food Stamps. However, the House, driven by conservative lawmakers, continues to push for deep cuts
to both programs, as well as additional cuts to critical services for low-income and vulnerable populations. The House would:
- Cut $9.5
billion from Medicaid. The proposals would reduce low-income Americans’ access to needed health care services and medications
by increasing premiums and co-payments. For the first time states would be allowed to charge premiums and co-payments for
low-income children and pregnant women. In addition, the House legislation would allow states to restrict benefits for many
Medicaid beneficiaries, including preventive care for many children.
- Cut $5 billion
from Child Support Enforcement. According to the Congressional Budget Office, these cuts would cause some $24 billion in child
support to go uncollected over the next 10 years. Child support is a critical
means for lifting children out of poverty (1 million in 2002) and studies have shown that for every $1 spent on Child Support
Enforcement, states are able to collect over $4 in child support and save over $1 in public assistance.
- Cut $844
million from Food Stamps. Some 300,000 low-income families would lose Food Stamp assistance under the House plan that would
eliminate eligibility for families receiving non-cash TANF assistance and increase the waiting period for lawfully present
immigrants to receive benefits from 5 to 7 years.
- Cut $577 million from foster care. The proposal would reduce the number of children
eligible to receive federally funded foster care assistance and services and limit federal foster care-related funding for
children who are placed in certain types of foster care settings or who ultimately are placed in an institutional rather than
foster care setting.
- Push forward a punitive TANF reauthorization with reduced funding. The House has
incorporated its restrictive TANF reauthorization bill into the budget reconciliation bill, reducing child care funding from
$1 billion (over 5 years) to a mere $500 million and eliminating bonus funding for high performing states. Given the increased
work requirements and woefully inadequate child care funding, some 270,000 children would likely lose access to child care
assistance by 2010.
- For more on the House TANF bill, please see our March update comparing the House and Senate bills.
It is
still unclear whether there are enough votes in the House to pass all of these cuts. Many moderate Republicans have been expressing
concerns about the impact of the cuts and the voices of advocates are being heard Capitol Hill. If the House spending reconciliation bill does pass, it will go into conference with the Senate bill (which
is likely to pass, though by a narrow margin), the product of which will likely contain many of the House’s harmful
cuts.
Following
passage of the mandatory spending cuts, the House and Senate will begin consideration of the second part of this year’s
reconciliation process – $70 billion more in tax cuts. It is important to highlight these tax cuts because they point
to the heart of what is wrong with this year’s budget reconciliation process. All of the
reconciliation spending cuts in the House as well as the cuts in the Senate are touted by many on Capitol Hill as a means
of reducing the deficit or helping to pay for the costs of hurricane relief. However,
these cuts are really just a means of diverting attention from the fact that the reconciliation tax cuts will actually put
the budget further in the red. In fact, the very reason that there are two reconciliation bills (one for spending and one for taxes) this year is to try hide the fact that the cuts
to programs such as Medicaid, food stamps, and other programs for low-incomes children and families are being made to help
finance more tax breaks for the most affluent Americans, NOT to reduce the deficit.
In other budget news, Congress is still considering across-the-board cuts for
discretionary* programs. These cuts would affect everything from Head Start to housing programs to WIC nutrition assistance to juvenile
justice and domestic violence funding. The cuts come on top of reductions over
the past several years that forced significant cutbacks in social services across the county. For more information and a state-by-state
breakdown of the impact of the cuts, please visit the Center on Budget and Policy Priorities (PDF file).
Given the needs our country is facing –- poverty, income inequality,
and food insecurity on the rise, health coverage declining, and the ongoing recovery and rebuilding efforts along the Gulf
Coast and in Florida – not to mention our unmet responsibilities to the global community, this year’s reconciliation
process and the budget as a whole represent the wrong priorities and violates the
principle of shared sacrifice which is critical to upholding the common good. Right after Hurricane Katrina hit and the images
of the devastation jarred our national consciousness, there seemed to be an opening for a new dialog about poverty, race,
and injustice in America. We need to try
to recapture that moment by urging our leaders in Congress to step back from further budget and tax cuts and engage in a deeper
conversation about our national priorities and values.
* The federal budget contains two kinds of spending: mandatory and discretionary. Mandatory spending accounts for roughly
two-thirds of the federal budget and includes “entitlement” programs such as Medicare and Social Security. This
spending is set by permanent laws which automatically determine the funding levels
for each year. The reconciliation process is the primary means for reducing mandatory
spending. Discretionary spending
encompasses all other spending and it is set each year by Congress through the Appropriations process. Each year Congress can choose to increase, decrease, or eliminate funding for discretionary programs.
For More Information
Previous Budget Updates:
National Advocacy Center and Other Faith Statements on the Budget and Taxation:
More Background on
the Budget Cuts and Reconciliation
|
