The Politics.  The President’s budget includes $166 billion in job creation initiatives, investing in infrastructure improvements, clean energy, and a comprehensive re-building approach in 20 poor communities.  It commits modest funding towards all levels of education in addition to the early childhood initiative.  But by using the budget as a platform to put forward a deficit reduction offer already made to Speaker Boehner (R-OH) and rejected by him, it makes cuts in Social Security strongly opposed by most Democrats and raises less revenue than the Senate budget plan.  As a gambit to demonstrate his willingness to compromise and to smoke out Republican unwillingness, the budget seems to have worked.  Pundits praised the elements of compromise and Republicans scrambled away from previous support for the Social Security change in order to stay firmly opposed to the President.  (Last December, Bloomberg News reported that Speaker Boehner was “pressing harder for the CPI revision than for other entitlement changes…”  Senate Minority Leader McConnell (R-KY) was looking for higher Medicare premiums for upper-income retirees, raising the age to become eligible for Medicare, and reducing Social Security benefits by shrinking the adjustment for inflation (the “chained CPI”) in order to consider new revenue last winter.)  But although the President included the reduced inflation adjustment and higher Medicare payments for upper-income retirees, his budget was rejected out of hand by the Republican leaders.

The President has said that he will only agree to cut Social Security as part of an overall deal that increases revenues and includes some economic investments.  But many strong advocates for Social Security and other vital safety net programs strongly oppose the Social Security cut under any circumstances.  Even those who could imagine it as part of a plan with healthy doses of revenue and job creation are worried now that the Social Security cut will find its way into a far less helpful budget plan.

The Math.  The President proposes $3.78 trillion in spending and $3.03 trillion in receipts for FY 2014, leaving a deficit of $744 billion, down from a deficit of $973 billion this year.  The deficit will decline from 6 percent of GDP now, to 4 percent in FY 2014, and down to 1.7 percent of GDP in 2023.

Revenues.  The budget includes $583 billion in revenue increases over 10 years from limiting high-income deductions to 28 percent and from increasing taxes on millionaires.  It adds another $100 billion in revenues from the chained CPI proposal’s effects on tax payments, and adds $78 billion in tobacco taxes to pay for the early childhood initiative.  In a move disappointing to many human needs advocates, the President’s budget lists a large number of corporate tax loophole-closings, but holds them in reserve to pay for an unspecified reduction in corporate tax rates.  Advocates are seeking a net increase in revenues from any corporate tax reform agreement, but the President would make reform revenue-neutral.

Spending Overview:  The President’s budget would replace the multi-year cuts that started this year with sequestration with the new revenue, plus about $400 billion in health care savings (largely Medicare), $130 billion from spending cuts due to the chained CPI reduced inflation adjustment, another $200 billion in savings in other mandatory programs (such as farm subsidies), and $200 billion in appropriations cuts, split evenly between the Pentagon and other programs.  By reducing the deficit, interest payments will decline by $210 billion over the same 10-year period.  Together, the revenues and spending cuts will reduce the deficit by $1.8 trillion.  The Administration estimates prior deficit reduction at $2.5 trillion; adding in his new budget proposal, deficit reduction would total $4.3 trillion over 10 years.

Budget Comparisons:  The President’s budget raises less revenue than the Senate’s $975 billion from progressive sources over 10 years.  The President’s plan cuts mandatory spending more ($600 billion in health care and other savings); the Senate’s mandatory savings total $350 billion.  The President cuts discretionary spending (appropriations) less than the Senate.  The Senate cuts $240 billion from the Pentagon, compared with $100 billion in the President’s budget.  The Senate cuts domestic and international appropriations by $142 billion, compared with the President’s $100 billion.

The Administration’s and Senate’s plans both differ starkly from the House budget, which includes no net revenue increases, and cuts spending by about $5 trillion, plus another $700 billion in interest savings.  The Pentagon is not cut.  About two-thirds of the cuts affect low-income programs, including deep cuts in Medicaid and SNAP/food stamps.  (For more details about the House and Senate budgets see the March 18 Human Needs Report.)

Details on Low-Income Programs in the President’s Budget:

Early Childhood:   The $75 billion 10-year Preschool for All proposal to ensure that every low- and moderate-income four year old gets pre-kindergarten education is joined by $1.4 billion next year for Early Head Start and child care partnerships to increase high quality early learning programs for infants and toddlers through age three.  Further supporting young families, the budget would expand voluntary home visiting services for families with newborns, with $15 billion over ten years, starting in FY 2015.

Aid to Poor Communities:  The President’s budget attempts a comprehensive approach, putting together resources from multiple government agencies to attack both the causes and toxic by-products of poverty.  It would create 20 Promise Zones, coordinating housing, education, anti-violence, and other economic development initiatives.  The Choice Neighborhoods Initiative would provide $400 million to improve distressed HUD-assisted housing in very poor communities (up from $120 million this year).  Homelessness Assistance Grants are increased by about $350 million, not counting the extra across-the-board cuts now being made.  Apart from the early childhood education expansions, there are initiatives to improve high schools and to invest in community colleges, both targeted to low-income community needs.  Related to the Administration’s push to reduce gun violence, the budget includes $160 million in new funds for Project AWARE, providing for more trained mental health providers able to work with children and youth in school, as well as more public safety support in poor communities.

The budget repeats the President’s $12.5 billion Pathways Back to Work proposal, which would fund summer and year-round jobs and training for low-income youth and provide subsidized jobs and training for the long-term unemployed.  This initiative was part of the President’s unsuccessful American Jobs Act proposal last year.  In part, it builds on the success of subsidized jobs funded through a now-expired Temporary Assistance for Needy Families emergency fund, in which hundreds of thousands of temporary jobs were created.

There are broader job creation initiatives, with funding to rebuild infrastructure, invest in clean energy, and create manufacturing hubs.  These are not specially targeted to help the poor, but overall efforts to create jobs will be a help, especially if the Administration connects job training for low-income workers to these new plans.

Reverses SNAP Cuts:  Millions of poor people are now facing a reduction in SNAP/food stamp benefits scheduled to start in November.  The President’s budget would cancel that loss in food assistance, estimated to cost a family of three $20-$25 a month.  In another critical area where the budget at least partially reverses cuts to low-income programs, rental housing vouchers for low-income families are increased by more than $1 billion.  The automatic cuts now in effect could reduce the number of vouchers going to low-income families by 140,000, out of 2.2 million households now benefiting from this form of housing assistance.  The President’s budget would end these cuts.

Makes Low-Income Tax Credits Permanent:  While the last deficit reduction deal made the Bush tax cuts permanent for all but the richest 1 percent, the low-income tax credits were only extended for five years.  The Obama budget makes the current levels permanent for the Child Tax Credit, Earned Income Tax Credit, and the American Opportunity Tax Credit (the latter for college students).  The Child Tax Credit and EITC lifted more than 9 million people out of poverty in 2011.  However, the chained CPI proposal will reduce the value of the Earned Income Tax Credit over time.

Protects Health Coverage:   The budget protects Medicaid and the Children’s Health Insurance Program.  It continues implementation of the Affordable Care Act, showing states that they can count on the promised federal support for expanding their Medicaid programs.

Cuts to Low-Income Programs:  Unaccountably, despite the Administration’s emphasis on interconnected programs to maximize effectiveness, the budget repeats its proposal to slash the Community Services Block Grant to $350 million (down from $682 million this year, not counting the across-the-board cuts).  These funds support community action agencies nationwide, which administer Head Start, home energy assistance, emergency food, and local economic development and other anti-poverty initiatives.  These agencies leverage private dollars and do the kind of coordination of services the Administration is counting on.  The budget also cuts the Low Income Home Energy Assistance Program (LIHEAP) by more than $500 million, counting this year’s across-the-board cuts.

Scope:  By choosing to stick to the deficit reduction offer made and rejected last year, the budget cannot support enough job creation and economic development to meet the needs of the current weak economy.  There is no doubt that there is strong opposition to making the needed investments.  But just as President Obama’s leadership has maximized public support for gun legislation and helped to shape public support for immigration reform, his leadership in pressing for jobs and shared prosperity will matter.

The post CHN: The President’s FY 2014 Budget: Important Initiatives Face Uphill Battle appeared first on Coalition on Human Needs.

There was an outside chance that Congress would be able to agree on a full-year appropriations bill during the waning days of its session.  For parents needing help with child care or placing their children in Head Start, the outcome was very important.  These programs are facing a significant loss of funding as the temporary increase provided by economic recovery legislation expires.  An omnibus spending bill proposed by the Senate Appropriations Committee would have mitigated the loss of the temporary funding by increasing child care base dollars by $681 million and Head Start by $840 million over their FY 2010 levels.

But hopes for that were dashed when Senate Republicans who had participated in negotiations for the omnibus spending bill backed away from their initial support.  The omnibus, with individual line items for all annual appropriations, was shelved.  Republicans, who will control the House of Representatives and be more influential in the Senate starting in January, decided to unite around delaying full-year decisions until after the new Congress is seated.

Without the necessary 60 votes to pass the omnibus bill, Senate Appropriations Committee Chair Daniel Inouye (D-HI) introduced a short-term continuing resolution (CR) instead, which would fund federal programs through March 4.  The Senate took up this bill on December 21, the day that the previous stop-gap spending bill was to expire.  The Senate voted for the temporary spending measure (a Senate amendment to H.R. 3082) by a convincing vote of 79-16, and sent it to the House for final enactment.  In the evening, the House obliged, with a vote of 193-165, sending it to the President for his signature and preventing a government shutdown.   House Members used this final debate as an opportunity to celebrate the historic career of David Obey (D-WI), the retiring Chair of the House Appropriations Committee.  Chairman Obey has served in the House since 1969, and is the third longest-serving Member in the House.

The expected House leadership once the new Congress is seated has proposed funding levels substantially below current spending for domestic programs including housing, education/training, children’s services, public health, home energy assistance, and much more.  They will get the chance to propose spending cuts when Congress has to extend funding before the March 4 deadline.

In this year of logjam, Congress had not enacted any of the dozen separate appropriations bills in time for the beginning of the fiscal year on October 1.  Instead, they passed temporary continuing resolutions.  That left three options for closing out the year:  (1) passing an omnibus bill, with complete funding decisions for each program; (2) passing another continuing resolution through the end of the fiscal year, with programs flat-funded except for a small number of programs where flat-funding would have bad consequences unacceptable to Congress; and (3) passing a short-term continuing resolution.  By taking the third option, Congress has greatly increased the likelihood of significant cuts in human needs programs.

All of the spending proposals being floated in Congress are lower than President Obama’s FY 2011 budget plan.  Here is a rough summary of appropriations totals (both domestic and military/international) in the proposals Congress has considered or will in the near future:

                        President’s FY 2011 budget: $1.137T
Senate omnibus bill:                $1.108T
House full-year CR:                 $1.089T
Senate CR till March 4
(at full-year rate):                    $1.091T
Boehner proposal (expected
new House Speaker):            $1.029T

The Boehner proposal is $62 billion less than the annualized rate of spending in the short-term continuing resolution, and about $108 billion less than the President’s earlier proposal.  Even worse, the Boehner plan accepts the President’s funding for military, homeland security, and veterans’ programs, inflicting all the cuts in domestic spending.  An analysis by the Center on Budget and Policy Priorities estimates that the Boehner plan will require an immediate 21 percent across-the-board cut in domestic programs, “the deepest cut for these programs from one year to the next in recent U.S. history.”

The short-term continuing resolution just enacted includes a few increases beyond level-funding.  For example, the bill makes up a $5.7 billion shortfall in funding for Pell grants, to ensure that the maximum annual grant per student is not reduced from its current $5,550 amount.  An increase of $460 million was provided for the Veterans Benefits Administration, to keep up with the large number of war-related disability claims.  There are also some proposed increases in military spending.  But the increases in child care and Head Start have been wiped out.  Similarly, the omnibus had funding for 10,000 rental vouchers and other assistance for homeless families and individuals, whose numbers have grown since the housing bust and the recession.  The omnibus provided $830 million in new funds to process disability and retirement claims through the Social Security Administration to prevent long waits due to the rising number of claims.  These modest increases do not appear to be included in the March 4 CR.  Neither is about $1 billion in additional funding for the Centers for Medicare and Medicaid Services (CMS), much of which would have been used towards implementing the new health care law.  While omitting this funding does not really prohibit the Administration from moving ahead with implementing the law (most of the health care law’s funding is mandatory and not subject to Congressional appropriation), it may slow the process down somewhat.

Because the CR avoids most item-by-item appropriating, it also fails to achieve $10.2 billion in savings from military programs that the omnibus would have cut.  These savings are not therefore available to be invested in other services.

If the new Congress replaces the short-term measure with something like the Boehner plan, it will have to cut domestic spending by more than $100 billion, (the 21 percent mentioned above).  The cuts would apply to programs that have been operating since October 1, and so would be far worse because they could not be spread over a full 12 months.  Cuts of this magnitude will hurt the fragile economic recovery, and will invite strong opposition.  As President Obama charts his course in working with a more hostile Congress, advocates will be looking for his use of every Presidential tool to fight off severe cuts, up to and including veto threats.

The post CHN: Senate Attempt at Full-Year Appropriations Collapses appeared first on Coalition on Human Needs.

Taxes
The stakes will be high as Congress decides which provisions in the 2001 and 2003 Bush tax cuts will be allowed to expire on December 31, which will be extended, and whether the extensions will be permanent or temporary.  There is broad agreement among Democrats, Republicans and the Administration that the tax cuts for the bottom 98 percent of taxpayers should be extended. At issue are the tax breaks for the wealthiest two percent. Most Democrats believe those should be allowed to expire.  Republicans under the leadership of Senate Minority Leader Mitch McConnell (R-KY) want to extend all of the Bush tax cuts.  Allowing the top marginal income tax rates for wealthy taxpayers, currently set at 33 and 35 percent, to remain in place – for income above approximately $210,000 and $375,000 – rather than reverting to 36 and 39.6 percent rates, and retaining the 15 percent rate on capital gains and dividends rather than the pre-2001 rate of 20 percent, carries a $700 billion price tag over 10 years.  If the two top rates are not extended, those same taxpayers would still benefit from retaining the lower 10, 15, 25, and 28 rates on their initial income.  Proponents of extending tax breaks for the wealthiest argue that this will lead to job creation and economic growth, but there is little evidence to support their position.  There is considerable evidence that spending a small fraction of that amount on unemployment benefits, for example, would provide a far more effective boost to the economy.

Advocates will be working to ensure that the improvements to the refundable Child Tax Credit and the Earned Income Tax Credit included in ARRA passed in 2009 are linked with the extension or permanency of the middle-class tax cuts.  For low-income families who receive the refundable credits the national average per-family benefit of retaining the improvements is $1,330, according to a Citizen for Tax Justice report.   President Obama’s plan, supported by most Democrats, extends all of the Bush tax cuts for individuals making up to $200,000 and couples up to $250,000, including the improvements in the refundable credits.  The Republican plan forwarded by Senator McConnell does not call for extending the refundable credits and extends all tax cuts for the wealthiest.  Under the Republican plan, the bottom 60 percent of U.S. taxpayers would pay $124 more and the richest one percent would pay $45,893 less in 2011, on average, then they would under President Obama’s plan, according to a Citizens for Tax Justice report.

Prior to Thanksgiving break Senate Majority Leader Harry Reid (D-NV) indicated that he would schedule a vote on extending tax cuts for the bottom 98 percent and hoped that Minority Leader McConnell would agree not to block the vote if there is also a vote on his plan to extend all of the tax cuts.  Currently there are not 60 votes to pass either plan.  The majority of Democrats oppose extending the tax breaks for the upper two percent and Republicans, emboldened by election gains, are pressing for full extension.  It is unclear how this will get resolved, but if they do not act by January all taxpayers will face an increase in their taxes that will show up immediately in lower take-home pay.

Appropriations for FY 2011
After failing to pass any of the 12 appropriations bills that fund discretionary (annually appropriated) programs by October 1 when Fiscal Year 2011 began, Congress has passed two stopgap continuing resolutions (CR’s) to continue funding programs.  The current CR is set to expire on December 3.  The CR funds most appropriated programs at their FY 2010 levels.  Democrats on the House and Senate Appropriations subcommittees along with Senate Republicans have been working to come to agreement on funding levels for each of the twelve FY 2011 spending bills that would then be bundled into an omnibus package.  Initially Senator McConnell (R-KY) agreed to the plan that would provide overall funding for discretionary programs at $16 billion below the President’s FY 2011 budget which itself calls for freezing non-military, non-homeland security spending.  The agreed-upon level is consistent with an amendment sponsored by Senators Jeff Sessions (R-AL) and Claire McCaskill (D-MO) that narrowly failed earlier this year.  However, under pressure from House Republicans who want even steeper cuts in non-security spending and who will be in charge in the House in the next Congress, Senator McConnell is backing away from his agreement.

The House Republican’s “Pledge to America” campaign document calls for funding non-security discretionary programs in FY 2011 at $105 billion, or 21.7 percent, less than the $483 billion in the President’s budget.  This level is $101 billion less than what was provided in 2010 when adjusted for inflation.  If those austere cuts are passed, well-funded lobbyists will press for less aggressive cuts to politically well-connected programs like roads or medical research, which will result in even deeper cuts for programs that address the needs of low- and moderate-income people.  These cuts would fall hard on state and local governments already facing the largest deficits in recent history.  Programs affected may include K-12 education, low-income housing, job training and employment services, nutrition, and services for the elderly and disabled – all critical for vulnerable populations.  (See Center on Budget and Policy report including state-by-state cuts that could result if the Republican plan is adopted.)  Most economists have warned against cutting domestic spending for at least another year, since the job and business income losses sure to result will threaten the very fragile economic recovery.

Advocates are working for passage of an omnibus bill in the lame-duck session. Reaching final agreement on funding for discretionary programs will be difficult as newly elected Republicans are anxious to demonstrate their desire to cut spending regardless of economists’ warnings.

Dream Act
Senate Majority Leader Harry Reid (D-NV) has pledged to bring the Development, Relief, and Education for Alien Minors (DREAM) Act for a vote in the Senate during the lame duck session. The DREAM Act is bipartisan legislation that would provide certain immigrant students who grew up in the U.S. an opportunity to obtain legal status if they go to college or serve in the U.S. military. Multiple versions of the DREAM Act have been introduced in Congress since 2001. Senate Majority Whip Richard Durbin (D-IL,) a longstanding champion of the bill, along with Senator Richard Lugar (R-IN) introduced the DREAM Act in the Senate, S. 729, in this Congress. Representatives Howard Berman (D-CA), Lincoln Diaz-Balart (R-FL) and Lucille Roybal-Allard (D-CA) introduced a House companion bill, H.R. 1751.

In preparation for a vote on the bill in the Senate, Senator Durbin introduced two new versions of the bill, S. 3962 and S. 3963, before the Thanksgiving break. The difference between both bills has to do with the qualifying age of individuals. In S. 3962 individuals have to be less than 35 years old when the bill is enacted to qualify for adjustment of status. In S. 3963 the cut-off age is 30. Both bills eliminate a provision that was in earlier versions giving states the option to provide in-state tuition without regard to immigration status. These changes were made in an effort to build greater support for the legislation. House Speaker Nancy Pelosi (D-CA) has also indicated that she would like to bring the DREAM Act for a vote in the House during the lame duck session.

Child Nutrition Reauthorization 
House leaders may bring the Senate-approved Child Nutrition Reauthorization bill, S. 3307, for a vote on the floor when they return from the Thanksgiving break. Passage of a Child Nutrition Reauthorization bill stalled in Congress after some House members raised concerns over parts of the Senate bill. S. 3307 provides $4.5 billion over 10 years for better child nutrition through more afterschool and summer meals, higher reimbursements to school lunch providers, improved administration of WIC and meals programs, including easier enrollment of children, and more funding for WIC program improvements.  House members have supported legislation with more funding and greater expansion of summer food and school breakfast programs and more streamlined access provisions. But the biggest sticking point for some House members has been the Senate’s use of future SNAP/food stamp cuts to pay for provisions in the Senate bill.  In August, 106 Representatives sent a letter to Speaker Pelosi opposing SNAP cuts.  (To learn more about the House members objections see the October 5 Human Needs Report.) House proponents are working with the Administration to identify ways during the lame duck session to prevent SNAP cuts from taking effect.  Child nutrition programs are set to expire on December 3.

According to new data released by the U.S. Department of Agriculture, 17.2 million children, or almost a quarter of all children in the U.S., struggled against hunger in 2009. The U.S. continues to experience high rates of food insecurity with 50 million Americans living in households struggling against hunger last year. However, worth noting is that while food insecurity grew significantly from 2007 to 2008, during the first year of the recession, in 2009 there was only a slight increase. This trend continued into 2010. An analysis by the Food Research and Action Center of data from the Gallup-Healthways Well-Being Index shows that food hardship actually declined slightly this year. It is significant that food hardship and insecurity did not rise significantly in 2009 and 2010 given the high rates of unemployment during these time periods. The leveling off of food insecurity rates coincides with the increase in SNAP benefits that were enacted as part of the American Recovery and Reinvestment Act.  This indicates the effectiveness of SNAP in ameliorating hunger and stresses the importance of maintaining a strong SNAP program, especially given the slow pace of recovery.

SSI Benefits
On October 1, up to 5,600 impoverished refugees and other immigrants in the U.S. on humanitarian grounds were cut off from their Supplemental Security Income (SSI) benefits. The Center on Budget and Policy Priorities estimates that another 5,600 could be cut off over the next 13 months unless Congress acts. Advocates are pushing Congress for a one-year extension of SSI eligibility and are also working with the Administration to determine a long-term solution for this population.

In 1996, a seven-year time limit for SSI benefits was imposed on humanitarian immigrants. It was assumed that seven years would give individuals sufficient time to obtain citizenship, and thereby maintain their benefits. However, processing delays and other obstacles in the immigration system made it nearly impossible for people to naturalize within the seven-year time period. Two years ago Congress overwhelmingly approved a two-year extension of SSI benefits for refugees, lengthening the eligibility level from seven years to nine.

Qualified Individual Program
Unless Congress acts in the lame-duck session, two programs critical to low-income Medicare beneficiaries will be terminated, the Qualified Individual (QI) Program and the therapy caps exception process.  The QI program is a federal grant to states that pays the Medicare Part B premium (covering doctors’ services and outpatient care) for individuals with income between 120 and 135 percent of the federal poverty level (about $13,000 to $14,600 in 2010) who are not otherwise eligible for Medicaid.  The program, currently serving 1.5 million low-income Medicare recipients, was created in 1997 and has been extended on a year-to-year basis since 2002.  If the QI program lapses these beneficiaries will lose approximately $1,100, the yearly cost of Part B premiums, forcing them to pay the premium out-of-pocket or drop coverage.

Also at risk is the therapy caps exception process, protecting low-income Medicare beneficiaries from being denied medically necessary services when they exceed limits on outpatient physical therapy, occupational therapy and speech-language services.  Treatment limitations include a combined $1,860 cap for speech and physical therapy services, and a separate $1,860 cap for occupational therapy.  Advocates are counting on Congress to extend these programs vital to low-income seniors.

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By a vote of 216 to 214, the House of Representatives passed a bill that cut $38.8 billion from the federal budget on Wednesday, February 1. The pain of the cuts will be overwhelmingly borne by moderate- and low-income students, families, the elderly, abused and neglected children, and people with disabilities. All Democrats, one Independent and 13 Republicans voted against S. 1932: http://clerk.house.gov/evs/2006/roll004.xml

Advocacy Efforts Paid Off

The vote came after months of intense lobbying and education work by advocates, service providers, students and others who decried the deep cuts and restrictive policy changes to Medicaid, student aid, child care, child support enforcement, Supplemental Security Income (SSI) for people with disabilities and Temporary Assistance for Needy Families (TANF). More than 300 events in districts around the country were sponsored by the coordinated efforts of the Emergency Campaign for America’s Priorities in the month of January alone. Members of the House of Representatives were bombarded with hundreds of thousands of calls from citizens over the last four months. Hundreds of groups around the country demanded – and got – meetings with their representatives to explain the harm the bill will cause to their communities.

These efforts were instrumental in persuading four Republican members who voted for the bill on December 19 to change their vote to “no.” The four members were Representatives Rob Simmons (R-CT), Jim Gerlach (R-PA), John Sweeney (R-NY), and Jim Ramstad (R-MN). Rep. Steve Buyer (R-IN) voted no in December but voted in favor of the bill on Wednesday. Two Republicans and one Democrat were absent.

The House approved a very similar version of the 774-page bill in the early morning of December 19 by a vote of 212 to 206 after having just hours to review it. Later that week the Senate approved the bill with minor changes. That action sent the bill back to the House. Because members of Congress had recessed for the year, opponents of the bill used the month of January to draw attention to egregious provisions that had been overlooked.

Although the legislation’s passage remains deeply disappointing to human needs advocates, the final bill reflects major improvements from the President’s original proposals and earlier Congressional versions. The bill does not include any cuts to food stamps or the President’s plan for a “superwaiver” which would have given states wide permission to waive rules and regulations for a variety of low-income services. The President had proposed at least $45 billion in cuts to Medicaid.

Bill Does Not Reduce Deficit

Conservatives claim S. 1932 was a necessary step to reining in out-of-control spending. But the misnamed Deficit Reduction Act of 2005 will actually increase the deficit because it is merely one half of a two-part package. The second part of the package – a tax reconciliation bill – reduces taxes (mostly for the well-off) by $70 billion. (See story below.) Coupled together, the budget cut bill and the tax cut bill will increase the deficit by more than $30 billion. In fact, Congress did not pass S. 1932 to cut government spending, but to help pay for (offset) additional new tax breaks.

Special Interests Win Out Over Ordinary Families

The final bill reflects the choice of Congress to protect special interests and big donors over families. Pressure from the managed care and pharmaceutical industries persuaded conference negotiators to drop provisions that would have saved money from Medicaid and Medicare programs – and instead placed the burden on low-income beneficiaries. The bill subjects students and parents to higher-than-market interest rates, with the federal government capturing the overpayments back from the lenders. Education and Workforce Committee Chairman John Boehner reassured banks that he would take care of them in the bill – which he did.

Medicaid: The bill cuts Medicaid by $27 billion over ten years by allowing states to reduce benefits and require poor mothers and children to pay more for their health care. Nearly all the 28 million children who now benefit from Medicaid may lose services and/or pay more than their families can afford. Comprehensive care that now effectively prevents and treats child health problems would no longer be assured, even for the poorest children, and many deserving elderly who have no options other than nursing home care will not be able to afford it. The nonpartisan Congressional Budget Office (CBO) estimates 13 million poor recipients would face new costs and 65,000 enrollees would lose Medicaid coverage altogether.

States would be required to demand proof of citizenship either through a birth certificate or a passport from all new and renewing Medicaid applicants. Many of the poorest citizens do not have such documents. One in five African Americans 60 years or older does not have a birth certificate.

The inclusion of the Family Opportunity Act is one bright spot in an otherwise mean-spirited bill. Under these provisions, potentially thousands of low- and middle-income families who cannot obtain private health insurance for their child with a significant disability may access the Medicaid program.

Child Support: Despite the success in the last decade of improving child support enforcement and collecting more payments owed to children, the budget bill cuts federal funding of enforcement activities by $4.9 billion over 10 years. As a result of this cut, at least $8.4 billion of child support will go uncollected.

Student Loans: The bill cuts $12.7 billion from student loan programs over five years. Up to 70 percent of the total cuts from education would directly affect student borrowers . College students will face higher fees and interest rates. Parent borrowers will also be charged higher interest rates.

Aid to Disabled: The bill cuts $425 million from cash aid for poor people with disabilities. Approving applications for Supplemental Security Income (SSI) for poor people with disabilities can take many months. Instead of receiving a lump sum payment for the benefits owed from the date of application, poor beneficiaries will have to wait much longer to collect what they are owed. In part, these provisions “save” money because some seriously disabled people will die before they receive their full benefits – a true death tax.

Temporary Assistance for Needy Families and Child Care: The bill reauthorizes the welfare-to-work program through 2010 and reduces some flexibility states now have in implementing their programs. The bill requires most states to make hasty increases in work participation — or face steep penalties. California’s Legislative Analyst’s Office has estimated that California will have to pay $445 million in penalties in 2009 and 2010, as the harsher provisions are implemented. On average, states will have to increase the number of families participating in work activities by 69 percent – an additional 236,000 families, with very little planning time and few resources. The Congressional Budget Office has estimated that the cost to states of meeting the new welfare to work requirements is $8.4 billion over 5 years. (Center for Law and Social Policy, http://www.clasp.org/publications/tanfagreement_update_jan12.pdf .) The small increase in child care funding ($200 million a year) is inadequate to cover the increased work demanded of parents. Funding for child care is estimated to be so inadequate that 255,000 fewer children in working families will receive child care assistance in 2010 than in 2004.

Foster Care: The budget bill would reduce assistance to abused and neglected children by almost $1.3 billion over 10 years ($577 million over 5 years). This includes certain reductions to all states and specific cuts to services and benefits for relative caregivers in nine western states. Both cuts will limit access to foster care assistance by grandparents or other relatives. The bill restricts case management and planning to arrange for appropriate medical, mental health, educational, and other services. Although the bill includes some increases in child welfare spending, these are very small, and are far outweighed by these cuts.

For More Information

Washington Post: Budget Cuts Pass By Slim Margin: http://www.washingtonpost.com/wp-dyn/content/article/2006/02/01/AR2006020100329.html

CBPP: Budget Bill Shields Key Special Interests: http://www.cbpp.org/12-20-05bud.htm

The post CHN: House Cuts $38.8 Billion from Budget; Slashes Health Care, Student Loans, Child Support and Help for People with Disabilities appeared first on Coalition on Human Needs.

The failure of the final conference agreement was a surprise to House leaders. All Democrats and 22 Republicans rejected the bill. Several Republican lawmakers voted no because their special projects had been eliminated. In addition, Democrats and some Republicans were concerned about cuts to rural health funding and education programs and the lack of increase for home energy assistance in the face of rising energy costs.

The bill includes $142.5 billion in discretionary funding, $329 million less than last year’s level. Several human needs services, such as mental health, child care, Title I education, workforce training and others are funded at levels not adjusted for inflation, or below last year’s level.

But the cuts contained in the legislation are not the end of the story. It is widely expected that Congress will approve an across-the-board cut, which would affect all discretionary programs (those that must be approved each year). The across-the-board cut, which could be in the neighborhood of one or two percent, would be attached to the only other unfinished appropriations bill — the one funding the Department of Defense. For an explanation of how such an across-the-board cut may harm human needs programs, see a recent Center on Budget and Policy Priorities report.

In coming days negotiators will try once again to come up with a final Labor-HHS-Education bill that can be approved on the House floor and Senate floor. But if House leadership is unable to round up the necessary votes, then appropriators will seek to attach the bill to the Department of Defense bill. The two bills joined together would be difficult for lawmakers to vote against.

For More Information

Conference report 109-300
Appropriations Committee Republican staff: Highlights of the bill  ***Page Not Found
Appropriations Committee Democratic staff: Democratic views of the bill  *** Page Not Found

The post CHN: Labor-HHS-Education Bill Must Clear One Last Hurdle appeared first on Coalition on Human Needs.

The difference between those two bills must be ironed out in the next few days. The final bill that emerges from the conference committee will be voted on in each chamber. The reconciliation bill represents the top priority for right-wing members – yet many representatives and senators have voiced concerns over a wide variety of provisions under consideration. It is not yet clear Republican leadership will find enough votes to pass any final bill. House Speaker Dennis Hastert (R-IL) has threatened to keep the House in session until December 20 or later until the House agrees to the budget cuts.

Although right-wing members claim the cuts are necessary to reduce the deficit, any money “saved” from cutting services is being directed to pay for new tax cuts benefiting the wealthy. In fact the coupling of two reconciliation bills – one cutting services and one cutting tax cuts – actually increase the deficit. For more information about the tax cuts, see related article in this issue.

To combat the budget cuts, low-income advocates are planning a National Week of Prayer and Action for Compassionate Priorities for December 12-16. Advocates are being encouraged to call their representatives and senators next week and the Emergency Campaign for America’s Priorities is staging more than 90 events across the country. The faith-based organization Sojourners will hold a prayer vigil at the U.S. Capitol on December 14. Dozens of other prayer vigils will be held elsewhere in the country that week.

There are stark differences between the House and Senate versions of the budget-cutting bill – and those differences could trip up negotiators. If Congress is not able to approve the final bill before the end of the year, they could attempt to bring it up again in January. The budget resolution for fiscal year 2006, which Congress approved in the spring and which granted authority for the reconciliation bill, will remain in effect until Congress passes the next budget resolution for fiscal year 2007.

The Senate budget cutting bill (S. 1932) was approved November 3 by a vote of 52 to 47 with all Democrats except Mary Landrieu (LA) and Ben Nelson (NE) opposed. All Republican senators but five voted for the cuts. The House budget-cutting bill (H.R. 4241) was approved November 18 with all Democrats opposed and all but 14 Republicans in favor.

Here is a brief summary of what is in the House and Senate bills. (This list is not comprehensive.)

Medicaid: The Senate would cut Medicaid by about $6.1 billion over the next five years – but the burden of those cuts would be borne by the drug and insurance industry. H.R. 4241, on the other hand, would cut $11.4 billion from Medicaid and would allow states to require poor mothers and children to pay more for their health care. A family of three earning $18,000 a year could face total Medicaid charges of as much as $900 per year. The Congressional Budget Office (CBO) estimates 80 percent of the savings generated from these changes will come from people not getting care because they can’t afford it. The CBO estimates 100,000 people will lose Medicaid altogether. Senator Gordon Smith (R-OR) pledges to oppose any Medicaid cuts that harm beneficiaries.

Food Stamps: The Senate chose not to cut Food Stamps. The House bill denies Food Stamps to at least 255,000 people . At least 185,000 low-income working families with children will lose assistance, plus 70,000 legal immigrants who have been in this country for five years or more. Several Republican senators signed a letter urging rejection of Food Stamp cuts in final bill: Gordon Smith, Mike DeWine (OH), Richard Lugar (IN), Susan Collins (ME), Arlen Specter (PA), Chuck Hagel (NE), Rick Santorum (PA), Olympia Snowe (ME), Jim Talent (MO), Norm Coleman (MN), Lincoln Chafee (RI), Elizabeth Dole (NC), and Charles Grassley (IA).

Child Support: The House bill cuts $5 billion from child support enforcement. As a result of this cut, children in families owed child support by an absent parent will lose $24 billion in support over ten years. The Senate bill does not cut child support enforcement. Forty senators have signed a letter objecting to cuts to child support enforcement.

Aid to Disabled: H.R. 4241 cuts $730 million from Supplemental Security Income (SSI). Poor people with severe disabilities will have to wait longer to receive the aid the federal government owes them. It often takes months or a year for a disabled person to be approved for SSI. Now he or she gets a lump sum payment that can help pay back rent or other bills for the period when no money was coming in. The House bill would spread out the owed benefits over many months – and if the disabled person dies while waiting, the government gets to keep the money. The Senate bill does not cut SSI.

TANF/Welfare Reform: The House bill requires many more families to participate for longer hours in paid or unpaid work. The bill provides an inadequate $500 million in new child care funds – half of what previous House bills proposed. As a result, 330,000 fewer children will receive child care help. The bill makes it harder for poor parents to get education, training, rehabilitation or other services to enable them to work at decent pay. S. 1932 does not include TANF provisions. Welfare advocates have been asking senators to object to including TANF in a reconciliation bill. Six Republican senators have signed a letter being circulated by Olympia Snowe (ME) asking Majority Leader Bill Frist (TN) to ensure TANF stays out of a final bill. Signers include: Senators DeWine, Chafee, Coleman, Specter, and Collins.

Foster Care: The House bill cuts $600 million from programs for abused and neglected children. The bill limits eligibility for federal foster care payments for grandparents taking care of their grandchildren. The Senate bill does not make cuts to child welfare programs.

LIHEAP: The House bill includes a $1 billion increase for home energy assistance for low-income households. Acknowledging predictions of sky-high heating oil and electricity costs this winter, Republican leaders added LIHEAP money as a sweetener to the bill to attract Northeastern and Midwestern moderates. The Senate bill does not include additional LIHEAP funds.

Arctic Drilling: The Senate bill would open the Arctic National Wildlife Refuge to drilling; the House bill does not. To many observers, drilling in the Arctic will be a lynchpin issue in the negotiations. A group of House moderates vow to defeat any bill that includes arctic drilling but Senator Ted Stevens (R-AK) has said he would vote against a bill that does not include drilling.

For More Information

CHN: TANF Has No Place in Reconciliation   *** Page Not Found
CBPP: Judging the Outcome of House-Senate Negotiations
CHN alert on next week’s activities

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Advocates for human needs scored a major victory on Thursday, November 10, when Republicans in the House conceded they did not yet have the votes needed to pass a budget reconciliation bill (H.R. 4241) before departing for a long Veteran’s Day weekend. The inability of the leadership to win over the support of key House moderates is a stunning defeat, but the battle is not over. Acting Majority Leader Roy Blunt (R-MO) said leadership may try to bring the measure to a vote again in the middle of next week; at this point it is scheduled to come up again on Wednesday, November 16.

The House budget reconciliation bill cuts $51 billion from entitlement programs (those that do not need annual appropriations), including services for low-income children, people with disabilities, the elderly, working families and legal immigrants. For more details about the cuts, go to: http://www.chn.org/issues/opportunityforall/updateoncuts051026.html

Thousands of calls flooded into House offices as advocates urged lawmakers to abandon plans to cut Medicaid, Food Stamps, child support enforcement, foster care payments, student aid and Supplemental Security Income (SSI). Callers also opposed the inclusion of restrictive changes and inadequate child care in Temporary Assistance for Needy Families (TANF). The pressure from constituents and advocates for low-income families made a critical difference.

Republicans in the House and Senate remain deeply divided. Early on Thursday House leaders agreed to remove provisions to allow drilling in the Arctic National Wildlife Refuge and in off-shore locations. But that was not enough to win over moderates, who also protested the deep cuts to programs serving the poor. At the same time some right-wing members threatened to vote against the bill if it did not open up the Arctic for drilling. Jettisoning the major cuts to Medicaid, Food Stamps or child support enforcement could also be difficult because members on the right such as Rep. Mike Pence (R-IN) say they want even deeper budget cuts.

Several House conservatives argued the bill would not actually hurt families or individuals — it merely targeted waste and slowed the growth of government. In reality the bill changes several laws governing low-income services and will have a lasting effect. Fewer people (children and the elderly included) will get medical care, fewer single parent families will get the child support owed them, and thousands of struggling families moving from welfare to work will lose food stamps. The Coalition sent a letter to members of the House explaining how vulnerable Americans would be hurt by the budget bill: http://www.chn.org/pdf/houseletter.pdf

Senate Approves $35 Billion in Cuts to Entitlement Programs

The inability of the House to pass the budget bill thus far stands in contrast to the Senate, which passed its version ( S. 1932 ) on Thursday, November 3, by a vote of 52 to 47. All Democrats except Mary Landrieu (LA) and Ben Nelson (NE) opposed the Senate bill. All Republicans but five voted for the bill. The five Republicans who voted against the bill were: Lincoln Chafee (RI), Norm Coleman (MN), Susan Collins (ME), Mike DeWine (OH), and Olympia Snowe (ME). Senator Corzine (D-NJ) did not vote.

The Senate bill offers a stark contrast to the House bill. Most of the Senate budget cuts are aimed at insurance and pharmaceutical companies rather than at low-income beneficiaries. The Senate bill cuts Medicaid and Medicare, but does not contain harmful provisions allowing states to increase the amount that beneficiaries must pay for services or to restrict the benefits received.

Unlike the House bill, the Senate bill does not cut food stamps, foster care, SSI, or child support enforcement. The Senate bill does not include a reauthorization of Temporary Assistance for Needy Families (TANF).

The Senate bill cuts spending by more than $70 billion, but contains provisions increasing spending by $35 billion – so the net cut is about $35 billion.

The Senate rejected an amendment offered by Senator James Inhofe (R-OK) based on a proposal by the Administration, to limit non-defense appropriated spending starting in FY 2007 to the level approved for FY 2006 (which is below the appropriated spending level for FY 2005). This measure was soundly rejected by a vote of 32-67.

The Senate also rejected an amendment aimed at reducing the growth of the deficit. The amendment offered by Senator Conrad (D-ND) would have required the Senate to consider new legislation to cut taxes the same way it considers new spending bills. The pay-as-you-go (PAYGO) amendment requires any legislation that increases the deficit (either by increasing program costs or by new tax cuts) must be paid for by raising revenue or cutting spending elsewhere. If a bill that increases the deficit is not paid for, it would require 60 votes (rather than 51) to pass.

Many human needs advocates favor a pay-as-you-go rule in the Senate because the massive tax breaks passed in the last four years contributed to a huge portion of the country’s current deficit. Despite this, the right wing resolutely denies or ignores the role of the tax cuts in deepening the deficit, and instead uses the budget hole as a rationale to cut spending for low-income services. Although 51 Senators voted for the Conrad amendment, the measure failed because for technical reasons it required 60 votes to pass. All Democrats voted for the amendment (except Senator Corzine of New Jersey, who was absent but supports the measure) as well as six Republicans: Lincoln Chaffee (RI), Tom Coburn (OK), Susan Collins (ME), John McCain (AZ), Olympia Snowe (ME), and George Voinovich (OH).

Senators voted in favor of an amendment that would provide $1.7 billion in education aid to students displaced by Hurricane Katrina. The National Education Association opposed the amendment, saying it would open the door for federal school vouchers. But some other education groups and Senators Ted Kennedy (D-MA) and Chris Dodd (D-CT) supported the measure.

What Happens Next?

If the House is unable to approve a reconciliation bill that cuts spending in entitlement programs, the process is dead for the year and the cuts will not happen. Although the budget resolution passed by Congress earlier this year directs lawmakers to make the cuts, there is no enforcement mechanism.

Even if the House is able to pass a reconciliation bill in the next few weeks, the path to a final bill will be rocky. The House and Senate versions must go to conference and the resulting bill must be approved by both chambers. Given the dramatic differences between the Senate approach and the current House bill, it will be tricky to craft a conference bill that can attract enough ‘yes’ votes.

The post CHN: House Leadership Can’t Dig Up Votes to Slash Medicaid, Child Support, Food Stamps, SSI, and Foster Care appeared first on Coalition on Human Needs.

The discretionary level for fiscal 2006 is $164 million (0.1 percent) less than for fiscal 2005. In June the House passed its Labor-HHS spending bill, which also provided $142.5 billion in discretionary spending.

Several amendments were offered on the floor of the Senate to increase funding for services for low-income families, but the amendments failed.

Many services aimed at low-income families will receive the same or less funding as last fiscal year. Due to inflation and a series of across-the-board cuts in the last several years, many programs are funded at levels far below their 1990s’ levels.

Senators rejected several amendments that would have boosted spending for programs serving low-income individuals. An amendment sponsored by Sen. Jack Reed (D-RI) to increase spending for the Low Income Home Energy Assistance Program (LIHEAP) by $2.9 billion (bringing funding up to $5.1 billion) was defeated 54 to 43. The LIHEAP Coalition predicts dramatic increases in home heating expenses this winter.

Senators also defeated a proposal by Sen. Robert Byrd (D-WV) to add an additional $5 billion to Title I, which provides federal funds to low-income schools. The No Child Left Behind Act authorized Congress to provide $22.8 billion to Title I programs in fiscal 2006 – but the bill approved Thursday provides just $12.8 billion.

Funding for Head Start is $6.9 billion in the Senate bill, an increase of just $31 million over fiscal 2005 and not enough to cover inflation. The Senate defeated an amendment sponsored by Sen. Chris Dodd (D-CT) that would have boosted Head Start funding by an additional $153 million.

Sen. Hillary Clinton (D-NY) offered an amendment to increase spending on education for children with disabilities by $4 billion. The Senate’s bill provides $10.7 billion for Individuals with Disabilities Education Act , $100 million more than last year but far below the amount promised in the legislation authorizing the program.

By voice vote the Senate approved an amendment offered by Sen. John Sununu (R-NH) increasing funding to community health centers by $198.5 million. The Senate also accepted an amendment to increase spending to develop an avian flu vaccine.

The total discretionary level of the bill would have been $3 billion higher were it not for some accounting maneuvers by Sen. Arlen Specter (R-PA). The Senator shifted mandatory Supplemental Security Income (SSI) payments by a few days from fiscal 2006 to fiscal 2007. Advocates for the poor elderly and disabled who depend on SSI caution that recipients depend on receiving their benefits on a timetable and may not be able to easily adjust to a late benefit check. Sen. Specter used this same accounting measure last year, but it did not survive conference with the House.

A conference committee with the House is the next step for the bill. Conservatives in the House have been clamoring for across-the-board cuts that will affect all discretionary spending, including programs funded in this bill. Currently only three of twelve fiscal 2006 appropriations bills have been signed into law; most federal agencies are operating under a continuing resolution that is due to expire November 18.

The post CHN: Senate Approves Labor-HHS-Education Spending Bill appeared first on Coalition on Human Needs.

There are special debating procedures for a reconciliation bill – debate is limited to 20 hours and only 51 votes are needed for passage. Republican and Democratic leadership in the Senate have agreed to begin the debate at 4:00 p.m. on Monday, October 31. Debate will continue on Tuesday and Wednesday. At 6:00 p.m. on Wednesday time for debate will have expired. On Thursday and possibly Friday Senators will vote in quick succession on amendments (this is known informally as “vote-a-rama”).

The bill is a package of several separate pieces of legislation passed by various committees in the past two weeks.

In general, the Senate bill is less draconian than the House bill in terms of cuts that will affect low-income people. However, advocates are still concerned about what will happen when the Senate bill goes to conference with the House. Here are some key aspects of the Senate bill:

•  There are no cuts to foster care , SSI , child support enforcement or child care in the Senate bill.

•  The Senate does not include provisions to reauthorize TANF .

•  The Senate Agriculture Committee declined to cut Food Stamps and instead made larger cuts to commodities and conservation programs

•  Unlike its House counterpart, the Senate provisions on Medicaid do not require beneficiaries to pay more towards their care. The Senate bill also attempts to close loopholes for seniors who transfer assets in order to qualify for Medicaid nursing home care – but the provisions in the two bills differ, with the Senate’s provisions more narrowly targeted.

•  Many of the cuts to Medicaid come from closing loopholes on prescription drugs and revising how Medicaid pays for prescription drugs.

•  The Senate bill cuts about $16 billion from Medicare by eliminating the Medicare stabilization fund for private health care plans, linking Medicare payments to quality of care, and through other cuts not expected to affect beneficiaries.

•  The bill approved by the Senate Finance Committee actually cuts much more than $10 billion from Medicaid and Medicare. But it also includes provisions that increase costs, so the net cut equals close to $10 billion. One expensive provision will increase physician reimbursement rates for Medicare (not in the House bill). The Senate bill also redistributes State Children’s Health Insurance Program (SCHIP) surpluses to those states with SCHIP shortfalls, adding $138 million.

•  The Senate bill allows families with disabled children who have incomes slightly above poverty to retain Medicaid coverage, which costs $834 million. (Versions of the Family Opportunity Act have been approved by previous Senates.) Like the House, the Senate bill provides 100 percent federal Medicaid matching payments to states for persons living in areas affected by the hurricanes.

•  The Senate bill contains $13.7 billion in cuts to student loans, which student aid groups estimate will cost students an average of $3,800 in additional costs.

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Actions by the House were part of their goal to trim $50 billion from entitlement programs – programs such as Medicaid and Food Stamps that are automatically funded. The budget resolution for 2006 passed earlier this spring directed several House committees to cut $35 billion from programs under their jurisdiction as part of a budget reconciliation process. This week conservatives attempted to take a non-binding vote to increase cuts to entitlement programs from $35 billion to $50 billion, to eliminate a list of programs, and to impose across-the-board cuts on others. But Republican leadership lacked the votes to pass the measure, in large part because of an outpouring of opposition from constituents. However, even without a formal vote of the House, committees can go ahead and cut more deeply than originally required. And they proceeded to do so through the week of October 24.

Once committee action is concluded, the next step is for the committee bills to be packaged together and approved by the House budget committee next week (possibly November 3). The unified budget reconciliation bill is expected to be sent to the floor for a vote the week of November 7. Here is how the cuts were made:

MEDICAID – House Energy and Commerce Committee

Early Friday morning the House Energy and Commerce Committee approved a bill that cut $9.5 billion from Medicaid over the next five years. The bill changes Medicaid to make children, families, elders, and people with disabilities pay more and/or receive less. Those with incomes at or above the poverty level will for the first time be subject to pay for premiums if states choose to impose them. Unlike the Senate, the House did not consider cutting Medicare, although Chairman Joe Barton (R-TX) indicated that cuts to Medicare may occur in conference with the Senate.

•  Except for children in families below the poverty line, pregnant women and a few others, the committee gave states the option to require Medicaid recipients to pay towards the cost of medical and prescription drug costs, up to 5 percent of their income. States will also gain the authority to restrict the Medicaid benefits package for some beneficiaries.

•  The bill imposes many restrictions related to people transferring assets in order to qualify for Medicaid nursing home care, some of which may exclude people who are not sheltering assets.

•  The bill provides 100 percent federal Medicaid matching payments to states for persons living in areas affected by the hurricanes.

FOSTER CARE – House Ways and Means Committee

While the budget resolution passed by Congress last May directed this committee to cut $1 billion, Chairman Thomas (R-CA) is complying with a House leadership push to cut far more – about $8 billion, the majority affecting low-income children, elders, and people with disabilities.

•  Certain poor grandparents or other relatives caring for their relative’s children are the targets for the Ways and Means cuts. If those children are living with their poor relatives because they were removed from their parents’ home, a federal appeals court ruled that their relative caregivers’ low income should qualify them for federal foster care assistance. The Ways and Means cut would overturn this ruling by requiring the child’s eligibility to be based on the financial circumstances of their parents when they were living with them (even though that’s not where the child now resides).

•  The bill also would limit foster care assistance to relatives by imposing strict licensing requirements on a fast timetable – those who couldn’t comply would lose support.

•  Together, these cuts would amount to about $600 million over 5 years. The impact on families: in the nine states under the appeals court’s ruling (including California and other western states), some states may replace foster care assistance with smaller TANF payments. Other states may pick up all the foster care costs. The twin restrictions on relative care will result in some children being separated from their family members and placed in other foster care homes – a further disruption in the children’s lives.

SSI – House Ways and Means Committee

The House Ways and Means proposal would cut $730 million over 5 years by making poor seniors or people with disabilities wait longer for the Supplemental Security Income (SSI) payments they are owed. In effect, the federal government would force poor elderly and/or sick people to lend it money that will be used to pay for tax cuts for the well-heeled.

•  SSI typically takes many months to approve new cases while applicants hang on, piling up bills with little or no other income coming in. Once approved, people now can receive a lump sum payment of up to 12 months of back benefits, helping them to pay off debt. The new proposal would only allow a lump sum of up to 3 months, with the rest paid out in installments.

•  Part of the savings to the federal government will occur because some people will die and never receive the remainder they are owed. (In contrast to the proposal to eliminate the estate tax for the richest 1 percent of estates, poor SSI recipients would in death be taxed at 100 percent of their still-owed benefits.)

•  Ironically, another Ways and Means proposal would increase the reviews of SSI applications, further delaying approval and increasing the amount that would be owed.

CHILD SUPPORT – House Ways and Means Committee

Child support payments lifted one million children out of poverty in 2002 and encourages work among single parents by providing an essential supplement to earnings. Every dollar invested in child support enforcement results in $4.38 in collections. Nearly $22 billion was collected in 2004 at a total cost of $5.3 billion. The Ways and Means bill cuts child support enforcement by nearly $5 billion over 5 years by steadily reducing the federal share of the costs.

•  According to an estimate by the Congressional Budget Office, slashing this much from enforcement efforts will mean a 5-year loss of $7.9 billion in collections that would otherwise have gone to support low-income children. Over 10 years, the loss to children in single-parent families is estimated at $24.1 billion.

•  The rationale for cutting is that the 66 percent federal share of enforcement costs (the rest paid by states) is higher than the match rates paid in other programs such as TANF or Medicaid. That is not uniformly true – the federal share of TANF and Medicaid costs can reach up to 80 percent. The current child support enforcement cost is a good deal for the federal government, because greater collections have saved billions in public assistance payments.

WELFARE and CHILD CARE- House Ways and Means Committee

The Ways and Means bill includes legislation to reauthorize Temporary Assistance for Needy Families and the child care block grant. The bill does not cover even the inflation costs of child care, much less the increased demands from the bill’s harsher work rules. That means in 2010 270,000 fewer children will receive child care assistance than in 2004.

•  The bill claims to add a net $1 billion in TANF spending over 5 years. In reality, no money is added over current expenditures. The bill continues the $319 billion a year in existing supplemental grants to low-income states which are counted misleadingly as new money.

•  The real new spending in the bill – a meager $500 million over 5 years for child care and $1 billion for marriage promotion activities – is paid for by eliminating current bonuses to states for high performance in job placement, retention, earnings, families’ access to certain support services, and reduction of out of wedlock births.

•  Earlier versions of the House TANF bill included double the new child care funding (still inadequate) and reduced but did not eliminate the bonus for states’ welfare to work high performance. Even though the bill effectively reduces the resources states will have to help parents find and keep jobs, the bill ratchets up the work requirements – rising to 70 percent of the caseload required to work 40 hours a week while receiving assistance, while reducing access to vocational education and other services that would help parents leave assistance for work at real jobs with decent pay.

FOOD STAMPS – House Agriculture

The House Agriculture Committee began to mark up its bill on Friday, October 28. Chairman Bob Goodlatte’s (R-VA) bill cuts $884 million from Food Stamps . In total, the committee plans to cut $3.7 billion from all agriculture programs – more than the $3 billion they were instructed to cut by the budget resolution.

•  The committee goes farther than President Bush’s proposed plans for Food Stamp cuts. The President proposed that 7 percent of the Agriculture Committee cuts come from Food Stamps. In contrast, under Chairman Goodlatte’s bill, Food Stamps bear 25 percent of the total cuts to the Agriculture Committee.

•  The Committee’s bill goes along with a cut proposed by the Bush Administration that the Congressional Budget Office now estimates would exclude an estimated 225,000 people from the Food Stamp Program – mostly low-income families trying to make the transition to work.

•  In addition, the bill will make legal immigrants ineligible for food stamps for seven years after entering this country legally, regardless of how poor they are. (Current law allows legal immigrants to receive food stamps after five years.) This change is expected to cut off benefits to an estimated 70,000 legal immigrants in an average month.

•  The House Agriculture Committee took an approach dramatically different from its Senate counterpart. Senators found the need for Food Stamps so compelling that they rejected all cuts to the program. They were right – Food Stamps is an effective program that serves 25 million low-income Americans, including 13 million children, providing for basic nutrition at an average cost of less than $1 per meal.

STUDENT LOANS – House Education and Workforce

The House Education and Workforce Committee approved legislation to cut $15 billion from student loans. Student groups estimate the cuts will result in an average increase of $3,800 in students’ loan payments.

The post CHN: House Committees Slash Medicaid, Child Support, SSI, and Foster Care; Reduce Planned Increases for Child Care, Welfare Programs appeared first on Coalition on Human Needs.