What’s in the President’s Budget for Human Needs?

Martha Coven,

Center on Budget and Policy Priorities

Deborah Weinstein,

Coalition on Human Needs

February 8, 2007

Key Elements of the President’s Budget

Balances only “on paper” in 2012; makes long-term deficits worse

Makes the very expensive 2001 and 2003 tax cuts permanent, while ignoring costs of Alternative Minimum Tax relief (together they would cost $3.5 trillion over the next 10 years)

Cuts in domestic discretionary programs that grow deeper over time

Cuts in health care – including Medicaid cuts that shift significant costs to states and insufficient funding to continue coverage in the State Children’s Health Insurance Program (SCHIP)

Trade-offs in the Budget

People with incomes of more than $1 million would get tax cuts averaging $162,000 a year...

WHILE:

children with family incomes as low as $35,000 risk losing health insurance (SCHIP)

300,000 fewer families will have access to child care

housing assistance is reduced

the elderly face sharp cuts in home energy assistance (LIHEAP) and food assistance (CSFP)

The result? The problem of growing income inequality gets worse, not better.

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In the President’s budget…

A mother and two children in Michigan cannot find an apartment that costs less than half their income.

One-quarter of Michigan renters paid more than half their income on rent (26%) in 2005. Nearly half (48%) paid more than 30%. That doesn’t leave a lot for other vital needs.

In the U.S., 8.8 million low-income renters (below 80 percent of the median income in their state) pay more than half of their cash income for housing – up by 33% since 2000.

…Whose needs are met?

A low-income working family with children in Florida have no health insurance.

47 million people uninsured in the U.S.

Only about ¼ of children in FL below twice the poverty line are covered by their parents’ employer-sponsored health insurance (26%)

28% of FL’s children below twice the poverty line are uninsured

What’s top priority?

A retired woman in Pennsylvania turns the thermostat way down because she cannot afford the heating bills.

Electric bills from Philadelphia Gas Works rose 29% in 2006 (500,000 customers)

In U.S. between 2002-2007, electric bills up 17%; natural gas up 35%; heating oil up 44%

Compounding Problems

The family paying too much for rent? They run out of food before the end of the month.

In MI, 443,000 “food insecure” households (2002-2004); 11.3%.

And it doesn’t help that they don’t have help with child care or child support, either.

The retired woman with high energy bills? She can’t afford enough food either.

In PA, 490,000 food insecure households; 10.2%

What does the President’s budget do for these people?

It makes things worse.

Housing

Rental vouchers frozen – could result in loss of 40,000 to 80,000 vouchers – on top of loss of 150,000 vouchers since 2004.

Cuts housing for seniors: $747m this year, down to $575m.

Cuts housing for people with disabilities: from $231m in FY06 to $125m in FY08.

What to do instead?

Provide funding adequate to cover at least existing units.

Advocates succeeded in persuading the House to prevent loss of hundreds of thousands of units in the FY07 funding resolution.

Health Insurance

State Children’s Health Insurance Program (SCHIP): reduces federal funds to states covering children over twice the poverty line. (18 states now cover kids with higher incomes.)

Funding inadequate over next 5 years to cover children currently enrolled – needs another $12 – 15 b.

Current shortfall in funding affects 17 states; they will have a shortfall of $930m in 2007; threatens coverage of 630,000 children.

Other Health

Medicaid: cuts of $25.7b over 5 years - $13 b through law changes; $12.7b through admin. changes.

Results in more costs to states

Cuts payments to providers

Cuts certain services (rehab; transportation for school-based services)

What to do instead?

Advocates seek $60 billion expansion over 5 years in SCHIP and Medicaid. Will cover most uninsured children who are eligible for Medicaid or SCHIP. (7 in 10 uninsured kids are eligible. 9m uninsured children – proportion grew last year.)

Home Energy Assistance

President cuts LIHEAP (Low Income Home Energy Assistance Program) by more than $400m, down to $1.8b). In 2006, LIHEAP received $1 billion in new funds to deal with Katrina and fuel price spikes. This is not included in the $1.8b. Loss of new billion plus the Pres’ cut will force a cut of 1 million households (down from current 5.6 million).

What to do instead?

Fund LIHEAP at least at the authorized level: $5.1 billion.

Last year’s short-term increase resulted in serving about 5.6m households, up from 5.1m.

From FY05 to FY06, LIHEAP average annual payment rose from $347 to $454.

More funding ensures LIHEAP is available for cooling and heating costs.

Food Assistance

Food Stamps: President restricts eligibility of certain low-income working families; could drop at least 300,000 people from Food Stamps; also affects school meals.

Commodity Supplemental Food Program: President eliminates it – ends $20 monthly food packages for about 440,000 seniors and 50,000 pregnant women, young children after 6 month transition. Program cost $112m in FY 2006.

What to do instead?

Food Stamps: Advocates calling for

increase in benefits (now $1 per person per meal); including increasing minimum benefit (now $10 a month).

restoring benefits to legal immigrants and jobless adults without children.

want positive elements in President’s proposal: allowing households to keep certain savings accounts without losing Food Stamps, and other improvements would add 98,000 more people to Food Stamps.

Commodity Supplemental Food:

Provide funds adequate to cover all states participating or approved for new participation.

Child Care and Head Start

Between FY 2006 and FY 2010, President’s budget means 300,000 fewer children will get child care assistance – 200,000 fewer just through FY 2008; on top of 150,000 lost since 2000. Toll of inflation.

Same for Head Start – cut 11% since 2002; Pres. Proposal makes it 13%; Head Start programs making cutbacks.

What to do instead?

Head Start: Advocates seeking $750m in FY 2008 to undo and prevent cuts in services.

Child Care: Must begin to reverse massive losses.

Child Support

Cuts have already been approved – last year, Congress reduced funding for enforcement – will result in $8.4b less in child support going to children to whom it’s owed over 10 years.

When families receive child support, it makes a big difference in their income – adds $4,000 (15%) to income of families 100-200% of poverty.

More than one-third of poor children received child support; half of families 100-200% of poverty did (2001).

What to do instead?

Repeal the cuts enacted last year.

Will probably cost $2-3b. But every government dollar brings a $4.58 return.

Child support program served 17.2m children and collected $23b in 2005.

The cutback in funding is already causing some states to lay off as many as a third of local child support workers.

So many needs…so little time

Emergency Campaign for America’s Priorities (ECAP) has come up with a recommended total for domestic discretionary in FY 2008: $450b.

The President spends $392b on the same programs. Not enough.

$450b allows us to rebuild and start to serve more needy people.

Entitlement “asks”

Serve more people through

Food Stamps

SCHIP/Medicaid

Child Support

What We Need to Do

Stay connected: sign up at www.chn.org

Tell us you want to help: contact

Maricela Donahue at mdonahue@chn.org

Educate your members of Congress!

Join in events during Presidents’ Week Recess – February 19-23

Attend forums your member may schedule

Arrange to meet with your member or staff

Call his/her office – get to know key aide(s)

Participate in call-in days – spread the word

A few more ways to educate

Sign joint letters – help to get more signers

Talk to state or local officials – get them to weigh in

Be or find a spokesperson to talk to the press

Whose voice will be heard?

It’s up to you.

Please join in the fight

for the right priorities!

www.chn.org

Thanks!



	Martha Coven,
		Center on Budget and Policy Priorities

	Deborah Weinstein,
		Coalition on Human Needs

	February 8, 2007


		Balances only “on paper” in 2012; makes long-term deficits worse
		Makes the very expensive 2001 and 2003 tax cuts permanent, while ignoring costs of Alternative Minimum Tax relief (together they would cost $3.5 trillion over the next 10 years)
		Cuts in domestic discretionary programs that grow deeper over time
		Cuts in health care – including Medicaid cuts that shift significant costs to states and insufficient funding to continue coverage in the State Children’s Health Insurance Program (SCHIP)


	People with incomes of more than $1 million would get tax cuts averaging $162,000 a year...

	WHILE:
	children with family incomes as low as $35,000 risk losing health insurance (SCHIP)
	300,000 fewer families will have access to child care
	housing assistance is reduced
	the elderly face sharp cuts in home energy assistance (LIHEAP) and food assistance (CSFP)

	The result? The problem of growing income inequality gets worse, not better.


	A mother and two children in Michigan cannot find an apartment that costs less than half their income.
			One-quarter of Michigan renters paid more than half their income on rent (26%) in 2005. Nearly half (48%) paid more than 30%. That doesn’t leave a lot for other vital needs.
			In the U.S., 8.8 million low-income renters (below 80 percent of the median income in their state) pay more than half of their cash income for housing – up by 33% since 2000.


	A low-income working family with children in Florida have no health insurance.
			47 million people uninsured in the U.S.
			Only about ¼ of children in FL below twice the poverty line are covered by their parents’ employer-sponsored health insurance (26%)
			28% of FL’s children below twice the poverty line are uninsured


	A retired woman in Pennsylvania turns the thermostat way down because she cannot afford the heating bills.
			Electric bills from Philadelphia Gas Works rose 29% in 2006 (500,000 customers)
			In U.S. between 2002-2007, electric bills up 17%; natural gas up 35%; heating oil up 44%


	The family paying too much for rent? They run out of food before the end of the month.
			In MI, 443,000 “food insecure” households (2002-2004); 11.3%.
	And it doesn’t help that they don’t have help with child care or child support, either.
	The retired woman with high energy bills? She can’t afford enough food either.
			In PA, 490,000 food insecure households; 10.2%


	Rental vouchers frozen – could result in loss of 40,000 to 80,000 vouchers – on top of loss of 150,000 vouchers since 2004.
	Cuts housing for seniors: $747m this year, down to $575m.
	Cuts housing for people with disabilities: from $231m in FY06 to $125m in FY08.


	Provide funding adequate to cover at least existing units.
	Advocates succeeded in persuading the House to prevent loss of hundreds of thousands of units in the FY07 funding resolution.


	State Children’s Health Insurance Program (SCHIP): reduces federal funds to states covering children over twice the poverty line. (18 states now cover kids with higher incomes.)
		Funding inadequate over next 5 years to cover children currently enrolled – needs another $12 – 15 b.
		Current shortfall in funding affects 17 states; they will have a shortfall of $930m in 2007; threatens coverage of 630,000 children.


	Medicaid: cuts of $25.7b over 5 years - $13 b through law changes; $12.7b through admin. changes.
		Results in more costs to states
		Cuts payments to providers
		Cuts certain services (rehab; transportation for school-based services)


	Advocates seek $60 billion expansion over 5 years in SCHIP and Medicaid. Will cover most uninsured children who are eligible for Medicaid or SCHIP. (7 in 10 uninsured kids are eligible. 9m uninsured children – proportion grew last year.)


	President cuts LIHEAP (Low Income Home Energy Assistance Program) by more than $400m, down to $1.8b). In 2006, LIHEAP received $1 billion in new funds to deal with Katrina and fuel price spikes. This is not included in the $1.8b. Loss of new billion plus the Pres’ cut will force a cut of 1 million households (down from current 5.6 million).


	Fund LIHEAP at least at the authorized level: $5.1 billion.
		Last year’s short-term increase resulted in serving about 5.6m households, up from 5.1m.
		From FY05 to FY06, LIHEAP average annual payment rose from $347 to $454.
		More funding ensures LIHEAP is available for cooling and heating costs.


	Food Stamps: President restricts eligibility of certain low-income working families; could drop at least 300,000 people from Food Stamps; also affects school meals.
	Commodity Supplemental Food Program: President eliminates it – ends $20 monthly food packages for about 440,000 seniors and 50,000 pregnant women, young children after 6 month transition. Program cost $112m in FY 2006.


	Food Stamps: Advocates calling for
			increase in benefits (now $1 per person per meal); including increasing minimum benefit (now $10 a month).
			restoring benefits to legal immigrants and jobless adults without children.
			want positive elements in President’s proposal: allowing households to keep certain savings accounts without losing Food Stamps, and other improvements would add 98,000 more people to Food Stamps.
	Commodity Supplemental Food:
			Provide funds adequate to cover all states participating or approved for new participation.


	Between FY 2006 and FY 2010, President’s budget means 300,000 fewer children will get child care assistance – 200,000 fewer just through FY 2008; on top of 150,000 lost since 2000. Toll of inflation.
	Same for Head Start – cut 11% since 2002; Pres. Proposal makes it 13%; Head Start programs making cutbacks.



	Head Start: Advocates seeking $750m in FY 2008 to undo and prevent cuts in services.
	Child Care: Must begin to reverse massive losses.


	Cuts have already been approved – last year, Congress reduced funding for enforcement – will result in $8.4b less in child support going to children to whom it’s owed over 10 years.
	When families receive child support, it makes a big difference in their income – adds $4,000 (15%) to income of families 100-200% of poverty.
	More than one-third of poor children received child support; half of families 100-200% of poverty did (2001).


	Repeal the cuts enacted last year.

	Will probably cost $2-3b. But every government dollar brings a $4.58 return.
	Child support program served 17.2m children and collected $23b in 2005.
	The cutback in funding is already causing some states to lay off as many as a third of local child support workers.


	Emergency Campaign for America’s Priorities (ECAP) has come up with a recommended total for domestic discretionary in FY 2008: $450b.
	The President spends $392b on the same programs. Not enough.
	$450b allows us to rebuild and start to serve more needy people.


	Serve more people through

	Food Stamps
	SCHIP/Medicaid
	Child Support


	Stay connected: sign up at www.chn.org
	Tell us you want to help: contact
	Maricela Donahue at mdonahue@chn.org
	Educate your members of Congress!
		Join in events during Presidents’ Week Recess – February 19-23
		Attend forums your member may schedule
		Arrange to meet with your member or staff
		Call his/her office – get to know key aide(s)
		Participate in call-in days – spread the word


	Sign joint letters – help to get more signers
	Talk to state or local officials – get them to weigh in
	Be or find a spokesperson to talk to the press



	Please join in the fight
	for the right priorities!
	www.chn.org
	Thanks!