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.

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The House Goes Home for Christmas: Its Top Priorities: Slash Health Care, Nutrition, and Federal Pay, Raise Taxes on Working Families, Preserve Pentagon Spending, and No Fingerprints on Tax Increases Even for the Very Rich

If you are reading this, the world did not come to an end on December 21.  Congressional action did, though, at least through Christmas.  Despite predictions by Speaker Boehner (R-OH) and Majority Leader Cantor (R-VA) that there would be enough Republican votes for Boehner’s plan to raise tax rates on income over $1 million, their caucus rebelled.  Without enough votes for passage, Speaker Boehner cancelled the vote, and the House went home.  They might come back before New Year’s, if a deal can be put together to avert the spending cuts, tax increases, and loss of unemployment benefits for 2 million long-term jobless people that will mark the start of 2013.

The House did cast votes on Thursday evening.  They re-adopted a bill they had passed last spring, which replaced the $110 billion in automatic spending cuts scheduled to start January 1 with a large number of domestic cuts.  That bill went nowhere last spring, and the President and Senate Majority Leader Reid (D-NV) confirmed its fate will be the same now.  The new-old bill, The Spending Reduction Act of 2012 (H.R. 6684), passed 215-209, with no Democrats voting for it and 21 Republicans joining all 188 Democrats to oppose.

The bill was not originally part of Speaker Boehner’s plan for Thursday.  He had hoped there would be enough support to pass an amendment he called “Plan B”, continuing the current tax rates for everybody except millionaires, whose income tax rates would rise to where they were before the Bush tax cuts were enacted.  Because other favorable treatment for millionaires and multi-million dollar estates would remain, those with incomes over $1 million would still get tax cuts averaging $50,000 each.  Treatment of 25 million low-income working families with children was not so favorable – they would see their taxes rise by an average of $1,000 each.  (For more detail, see below.)  Even Grover Norquist, originator of the anti-tax pledge that has a stranglehold on most Republicans, said that passing Boehner’s “Plan B” would be okay, because it would be preventing a tax increase on everybody else.  But that wasn’t enough to gather the near-unanimity among Republicans necessary to pass Boehner’s bill with little or no Democratic support.

Republican House members either objected to raising any taxes on anyone, balked at passing something that did nothing to stop the looming Pentagon and domestic spending cuts, or both.  To mollify enough of them, the Speaker agreed to let the House vote again on the bill to replace the “sequester,” or automatic spending cuts.  In voting for this, the majority made its priorities clear.  The bill would eliminate all the $55 billion in Pentagon sequestration cuts in 2013 and would replace about $38.5 billion in across-the-board cuts to domestic appropriations, in part by substituting $19.1 billion in spending reductions to be achieved by lowering the total cap on appropriations for FY 2013.  Medicare cuts of about $16 billion that were originally included in sequestration would stay in place.   The money lost by stopping the Pentagon cuts and some of the domestic reductions would be made up (and then some) by more than $217 billion in cuts over 10 years  to SNAP/food stamps, Medicaid, premium subsidies and other funding for the new health care law, the Child Tax Credit, and several consumer protection measures.  It also raised nearly $88 billion in revenues over 10 years by requiring federal employees to pay more of their retirement costs.  (More details about these provisions below.)

But although the House passed these spending cuts, it did not win over enough Republicans to get a majority for the Plan B increase in millionaire tax rates.

So what’s next?  Despite repeated assertions on the House floor by House Budget Committee Chair Ryan (R-WI) and others that President Obama has not come out with specific spending cut proposals in his deficit reduction plan, the President has put forth several offers in his negotiations with Speaker Boehner.  The President’s most recent proposal includes tax cuts for everyone, but reduces the tax breaks at the top, for a new revenue total of $1.2 trillion over ten years, and cuts spending by $930 billion, plus another $290 billion in debt interest savings.  Some of the savings are highly controversial among Democrats (see below).  If a solution is to be found, either before or soon after the beginning of the new year, it appears less likely to be achieved by legislation that can draw majority Republican support in the House.  Another option – passing a plan in the House with bipartisan support (lots of Democrats and some Republicans.  It remains to be seen whether Speaker Boehner will exercise leadership in pressing for that, or leave it to others to work around him.  In announcing the House’s departure, the Speaker did not seem to be signing up for a renewed battle to win over his caucus.  Instead, he said “Now it is up to the president to work with Sen. Reid on legislation to avert the fiscal cliff.”

Taxes

Taxes were a major issue during the Presidential campaign with a focus on the ’01 and ’03 Bush-era income tax rates set to expire at the end of this year.  On November 14, newly off an election victory where he campaigned for higher taxes on incomes over $250,000 and with opinion polls solidly favoring his position, the President at his first post-election news conference reiterated his position on income tax rates and pressed for $1.6 trillion in revenue as part of a comprehensive deficit reduction deal.  Democrats were buoyed by the President’s approach.  Republicans had strongly resisted any increase in personal income tax rates but some conceded that the election results would likely mean rates for high-income taxpayers would go up.  Others pressed for no rate increases and instead talked in vague terms about tax reform that included closing unspecified tax loopholes and ending some tax deductions.  In return they also wanted deep cuts in spending.

The President presented a more detailed deficit reduction plan on November 29, outlining nearly $1.6 trillion in addition tax revenue over 10 years.   Tax rates for income of less than $250,000 would remain the same while the two top rates of 33 and 35 percent would revert back to 36 and 39.6 percent; the rate on capital gains would increase from 15 percent to 20 percent and dividends from 15 percent to the ordinary income tax rate; the maximum value of tax deductions would be lowered to 28 percent (someone in the 35 percent tax bracket can currently deduct up to 35 cents for every dollar in deductions) and additional limits would be placed on itemized deductions for higher-income taxpayers; and the estate tax would revert back from its current $5 million exemption level and maximum rate of 35 percent to its 2009 exemption level of $3.5 million and 45 percent maximum rate .  The tax package would also continue the expansions made in the 2009 economic recovery act to the refundable Child Tax Credit and Earned Income Tax Credit (EITC) for low-income working families; extend for one year the 2 percent payroll tax cut for individuals; provide a one-year fix to the Alternative Minimum Tax (ATM), keeping new taxpayers from being hit with an average income tax increase of $2,250 according to the Tax Policy Center; and extend a number of business tax breaks.

In response to the President’s plan Speaker Boehner, the Republicans’ lead negotiator in deficit reduction talks with the President, offered $800 billion in revenue through limiting tax expenditures in tax reform that would occur next year.  His plan did not specify which tax expenditures would be limited.  Many of the most costly expenditures in terms of lost revenue are very popular and have powerful lobby shops supporting them, for example the home mortgage interest deduction, making them politically difficult to reduce significantly.

Under earlier House Republican tax proposals and plans proposed by Speaker Boehner, the 2009 improvements in the Child Tax Credit and EITC would be allowed to expire.  This means that 12 million families benefiting from the Child Tax Credit would see their taxes go up by $800, on average.  Six million families would pay an average $500 tax increase because of cuts to the EITC.

In early December deficit reduction talks between Speaker Boehner and the President continued.  On December 17, the President presented a new proposal containing both new savings on the spending side and a reduction in revenue.  The proposal reduced revenue by increasing from $250,000 to $400,000 the income threshold at which the lower tax rates would be extended.   The 33 percent income tax rate would be extended rather than reverting back to 36 percent.

Speaker Boehner seemed to be making a significant move toward the President on revenue when he indicated that he would let tax rates on income over $1 million expire.  However, coupled with extending the Bush-era tax rates on income up to $1 million, extending limits on certain tax deductions set to end on January 1, taxing dividends at 20 percent rather than at the rate of regular income, and continuing the current generous estate tax provisions, people with incomes of over $1 million would receive an average tax cut of $108,500 according to the Tax Policy Center.

In a high-risk strategy Speaker Boehner decided to take this so-called “Plan B” to floor of the House for a vote on December 20.  When conservative Republicans revolted, Speaker Boehner pulled the bill knowing that it would not pass.  It is not yet clear what the impact of his failure to pass the bill will have on future talks with the President.  Democrats and the White House are urging him to return to the negotiating table with the President.

See Citizens for Tax Justice report from December 20 comparing Speaker Boehner’s “Plan B” and the President’s original and December 17 proposals at: http://www.ctj.org/pdf/latestfiscalcliff.pdf.

The Real Cliff:  Unemployment Insurance About to Expire, Leaving 2 Million With No Help

The House spectacle before the abrupt departure was remarkable both in showing what the majority wanted to do and what it didn’t care to tackle.  Although 4 in 10 of the unemployed today have been out of work for more than six months (most for more than a year), and have run out of state unemployment benefits, the House took no action to continue the federal Emergency Unemployment Compensation program for the long-term jobless.  It will expire at the end of December.  Two million will be denied unemployment benefits right away, followed by another million by the end of the March in 2013.  The proportion of the long-term unemployed has risen dramatically over the years.  After the 1980’s recession, 26 percent of the unemployed were out of work six months or more.  The President’s plan includes the extension of unemployment benefits for a year, at a cost of $33 billion.

Shrinking the Adjustment for Inflation:  “The Chained CPI”

One of the most controversial provisions in President Obama’s deficit reduction package is a change in the way the Consumer Price Index (CPI) would be calculated for purposes of calculating benefits for Social Security, and also affecting many other low-income programs that rely on annual inflation adjustments for eligibility or benefit levels.  In what ultimately turned out to be abortive negotiations with Speaker Boehner, the President responded to the demand that benefits to entitlement programs be cut by agreeing to this change, which is called the “chained CPI.”  It reduces the inflation rate by assuming that when certain prices go up, consumers are likely to switch to other comparable but cheaper products.  Some research questions whether the elderly, or low-income people generally are able to make such substitutions as easily as the population as a whole.  According to the Center for Economic and Policy Research, after 10 years, the Chained CPI would result in a 3 percent cut in Social Security benefits, about 6 percent after 20 years, and nearly 9 percent after 30 years.  For an average worker retiring at 65, this reduced measure of inflation would result in benefits being cut $1,130 a year at age 85.  Women would be disproportionately affected, because they live longer and are more likely to be poor.  The Administration’s Chained CPI proposal, which is estimated to save $130 billion over 10 years, does provide exemptions for low-income elderly and disabled making use of Supplemental Security Income (SSI), but that alone does not offer adequate protection to low-income people.  If the revised calculation is applied to the federal poverty guidelines, it will lower the annual increases in the poverty line, which would be likely to reduce benefits or shrink eligibility for means-tested programs.  Many progressive groups, including labor, have strenuously opposed making use of the Chained CPI.

SNAP in Farm Bill and House Bill 

Prospects for a 5-year reauthorization of a farm bill including the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) before this Congress ends on January 2 has all but disappeared. There is not time for action on a separate bill and prospects for attaching it to the elusive larger deficit reduction package are fading.  The full Senate passed a 5- year farm bill extension in June with $23 billion in savings over 10 years, including $4.5 billion in cuts to SNAP.  In July the House Agriculture Committee approved bipartisan farm bill legislation with $35 billion in savings over 10 years, including $16 billion in cuts to SNAP.  The House Republican leadership has refused to allow a floor vote to happen because some Republicans want deeper cuts to SNAP while many Democrats do not support any cuts to the program.  The commodities provisions in the two bills that subsidize farmers also split members, more along geographic than party lines.  The Senate bill tends to favor northern commodities like corn and soybeans and the House bill rice, peanuts and wheat grown in the southern states.

Absent a full reauthorization, there is faint hope that a shorter-term extension of the current farm bill might pass.  The SNAP program will continue to operate uninterrupted without an extension of the full bill because the rules governing the program will not expire and funding was included in the continuing resolution through March 2013.  However, some programs would be affected.  Dairy subsidies would revert back to a 1949 law, likely doubling milk prices.  Dairy products are a large portion of the Women, Infants and Children (WIC) federally-funded nutrition program, and the price increase would lessen the buying power of WIC recipients.

The Spending Reduction Act passed by the House on Thursday night included $32.3 billion in cuts to SNAP/food stamps.  The House majority would return SNAP benefits to their old level of about $1.30 per meal, an amount judged by nutrition experts to be inadequate.  While current law would have started that reduction in November of 2013, this bill moves it up to February.  Recent analysis estimates that this cut will result in a loss of $8 – $10 per person per month.  The House will also deny SNAP to 2 million people who now get benefits because their low incomes qualify them for programs such as Temporary Assistance for Needy Families.  This change will also result in 280,000 low-income children losing free school meals.  In addition, the House agreed to make it harder to streamline eligibility for SNAP benefits, which now can be received without additional documentation if certain households already qualify for Temporary Assistance for Needy Families (expected to cut assistance to 1.8 million individuals).  This change will also result in 280,000 low-income children losing free school meals.  These restrictions were estimated last spring to save $11.7 billion over 10 years.  Further, this bill would reduce SNAP benefits to people who now receive a small benefit from the Low Income Home Energy Assistance Program, said last spring to reduce SNAP spending by over $14 billion.  Despite this time of high unemployment, the House would drop certain federal spending for SNAP employment and training programs (saving about $3.1 billion over 10 years) and would end federal bonus payments to states to encourage good performance in administering SNAP.

Health Care Spending Reductions

The President’s most recent offer calls for $400 billion in savings in health care programs over 10 years, said to come mainly from Medicare, with relatively little from Medicaid (although details were not available).  The House Spending Reduction Act keeps the $16 billion in Medicare cuts scheduled to take place as part of the automatic FY 2013 cuts imposed by the Budget Control Act ( 2011 legislation that set up the “sequestration” cuts to start in January 2013 if Congress could not agree on a deficit reduction plan).  In addition, the House bill slashes health care premium subsidies under the Affordable Care Act for 350,000 people, and cut Medicaid funding to Puerto Rico and other territories even though Puerto Rico, despite its disproportionate poverty, receives far lower federal Medicaid payments than any state (a high of 35 percent in 2010; states receive no less than 50 percent of Medicaid costs).  The amendment also allows states to make cuts in their Medicaid programs below the levels in place when the Affordable Care Act passed, which could reduce eligibility or benefits for millions of people.  Further, it includes a number of funding cuts aimed at undermining the Affordable Care Act (the major new health care legislation now being implemented).  These savings are estimated at $47.3 billion over ten years by the Congressional Budget Office.

The President’s plan is said to assume at least one-year funding for continued higher payment levels to physicians under Medicare.  Their payments were supposed to be cut by Sustainable Growth Rate (SGR) reductions passed by Congress some years ago, but Congress has not been willing to implement these cuts.

Debt Ceiling

President Obama has been emphatic in not wanting to undergo another crisis negotiation in which Republicans insist on spending reductions commensurate with increases in the debt ceiling.  The debt ceiling is expected to be reached within the next month or two.  If Congress does not authorize continued borrowing, the crisis would stall spending, spook federal bond-holders, with threats of catastrophe for our economy, according to people like Federal Reserve Chair Ben Bernanke.  Holding spending on domestic priorities hostage to deeper and deeper cuts to get the debt ceiling increased would be very dangerous to human needs programs.  Obama’s position initially would have reduced Congress’ role in debt ceiling increases permanently; more recent proposals have called for a two-year debt ceiling increase.

Appropriations

The President’s most recent offer called for cuts of $100 billion to defense and $100 billion to non-defense appropriations over 10 years, beyond the $1.5 trillion in cuts to these programs already set in motion over the next decade.  These cuts are much lower than the approximately $1 trillion in additional Pentagon, domestic, and international program cuts that are now scheduled to start in January and continue over 10 years.  Still, domestic appropriations are being cut deeply already, affecting education, housing, child care, WIC, Head Start, home energy assistance, and much more, and many groups oppose any further cuts.  On the other hand, many military spending experts believe that much more could be cut from military spending than the $100 billion called for in the President’s plan.

As noted above, the House spending reduction bill cuts appropriations by another $19.1 billion in FY 2013 by lowering the appropriations cap by that amount.  The bill also prohibits further military cuts.

The post CHN: The House Goes Home for Christmas appeared first on Coalition on Human Needs.

Senate Agriculture Committee Chairwoma n Debbie Stabenow (D-MI) explained in a recent conference call with reporters that producing a five-year farm bill during the lame-duck session might be difficult but it would not be impossible.  Both chambers in Congress have agreed to act on the stalled legislation when they return after the November 6th elections. But the deep divides  have held up the bill so far.  The farm bill expires on September 30th but the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) continues to operate uninterrupted because the rules governing SNAP will not expire at that time and funding was included in the continuing resolution  through March 2013 (see Congress Passes 6-Month Spending Bill for Fiscal Year 2013 in this issue). The Commodity Supplemental Food Program is also protected.  The September deadline will no t a ffect farmers immediately either but Congress must act by the end of the year in order for farmers to plan next year’s crop season. If Congress fails to strike a deal by December 31st crop subsidies will revert back to 1940’s farm bill levels. This would include substantial reductions subsidies for dairy and soy farmers and increased subsidies for wheat farmers.

In July the House Agriculture C ommittee approved bipartisan farm bill legislation with $35 billion in savings over 10 years, including $16 billion in cuts to SNAP. The full Senate had passed a five – year farm bill extension in June with $23 billion in savings over 10 years, including $4.5 billion in cuts to SNAP over the same period of time.  The House Republican leadership has refused to allow a floor vote to happen because of several disagreements. Some Republicans want deeper cuts to SNAP; most House Democrats do not support any cuts to the program. Speaker John Boehner was quoted in a September 20th CQ article saying that the House would consider a multi-year measure or an extension of the current law, including a one – year or a three – month extension.

Although the bill has been punted to the lame-duck session, it has become a major election issue for some farm state lawmakers who must return home this week without certainty for their constituents. A discharge petition has been circulated to House members that would force a vote later this year should the petition attract 218 signatures. Over 50 Representatives including members from both major parties have signed on already. The petition gained attention on September 14th when two new Republicans, Representative Scott Tipton (R-CO) and Representative Renee Ellmers (R-NC) added their names. Later that same day both withdrew their signatures. Tipton, who is in a competitive reelection race, cited that his initial signature was “just to send a message that we need to move on this”.  House members in North Dakota and other Midwestern states are also using this petition to show constituents concerned about the lack of action that they support moving the bill.

House agricultural leaders told CQ reporters that they are already concerned that an agreement on a five-year farm bill may not be reached when Congress returns. The committee’s ranking Democratic member, Representative Collin Peterson (D-MN) and Chairman Frank Lucas (R-OK) have agreed to move a bill forward in February 2013 if no earlier action occurs in Congress.

The post CHN: Farm Bill Programs (Mostly) Will Expire September 30; SNAP is Protected: Congressional Leaders Opting to Delay a Fight Over the Farm Bill until after the Elections appeared first on Coalition on Human Needs.

Congress left for the August recess without coming to agreement on a Farm Bill.  The current 5-year bill is set to expire on September 30th. That leaves the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) funding and other farm programs unresolved until Congress returns in September. On August 2nd, House Speaker John Boehner (R-OH) told Congressional Quarterly reporters that “the House is pretty well divided” because of proposed cuts to SNAP. The farm bill contained over $16 billion in cuts to SNAP and the free school lunch program over 10 years.  Conservatives want that number to go higher and Democrats would prefer it to go lower.

Nutrition cuts weren’t the only thing dividing Congress on the Farm Bill. Despite a severe drought and sense of urgency to deal with disaster relief aid for farmers, the House and Senate also failed to agree on an aid package for drought relief. House Republicans proposed a one-year extension (H.R. 6228) in order to move the Farm Bill forward before the August recess, but did not get support from farmers or nutrition advocates for the plan. On July 26, House Republicans decoupled the farm bill from the disaster relief aid, pushing the Farm Bill to the sidelines and passing an aid-only bill instead (H.R. 6233). This House tactic could have forced the Senate to pass a bill before recess began, but Senate Democrats refused to take up the stand-alone bill because of many dividing factors. Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) said that she would not pass a bill that only covers help for some producers. In particular she was concerned that the aid package did not include fruit and vegetable growers and dairy producers, many of whom are her constituents. The House-passed aid bill would cut the Conservation Stewardship Program and the Environmental Quality Incentives Program by $639 million, providing $383 million to disaster aid and using the remainder for deficit reduction. Farm groups are concerned that this would just add to the cuts they are already expecting in a new Farm Bill. Some were also concerned that passing a short-term measure might delay a long-term, comprehensive bill.

It is unclear how the House and Senate will come to agreement on an extension of the Farm Bill before it expires but Chairwoman Stabenow has reiterated her commitment to working out a deal before the end of September. Agriculture Committee leaders could bypass House floor action, write their own compromise bill and attach it to “must-pass” legislation, but it is unlikely that this process will occur because Stabenow has said that the House must take action on the Farm Bill before a deal can be struck.

The post CHN: Congress Leaves Without Passing Farm Bill appeared first on Coalition on Human Needs.

Advocates worked hard to garner support for an amendment offered by Rep. Jim McGovern (D-MA) to reverse the $16.5 billion cut to SNAP.  All Republicans and five Democrats rejected the amendment 15-31. The committee also rejected an amendment to double the size of the SNAP cut to $33 billion offered by Rep. Tim Huelskamp (R-KS), defeating it 13-33.  An amendment sponsored by Rep. Kurt Schrader (D-OR) to reduce the SNAP cut to $4.5 billion, the same level as passed earlier by the Senate, failed 15-28. See details of the Senate bill in the July 9 Human Needs Report.

Rep. Martha Roby (R-AL) offered an amendment to require states to use the SAVE [Systematic Alien Verification for Eligibility] program to determine whether applicants’ citizenship status makes them ineligible for SNAP.  Currently, states have the option to use the SAVE program.  The Committee approved the amendment by voice vote.  This measure will not change eligibility law nor is it expected to put undue burdens on applicants.  Advocates were relieved when Rep. Roby, at the urging of Committee leadership, withdrew an amendment that would prevent millions of low-income U.S. citizen children from participating in the SNAP program.  It would require that all members of the household provide proof of citizenship or immigration status, even if they are not seeking benefits for themselves. In families with different statuses, this would prevent even eligible individuals from applying for much-needed nutrition assistance. Currently, states may not deny SNAP to eligible individuals based on the status of other family members who are not seeking services.  In addition to denying SNAP benefits to mixed status families, this amendment would impose onerous documentation requirements on all applicants.

Other amendments adopted by voice vote in the Committee include one sponsored by Rep. Robert Goodlatte (R-VA) and Rep. Jean Schmidt (R-OH) that cuts $5 million in SNAP funding for program outreach advertising and reinvests it in The Emergency Food Assistance Program (TEFAP). SNAP outreach helps enroll eligible families in need of SNAP assistance, decreasing pressure on food banks.  TEFAP distributes commodity foods made available by the U.S. Department of Agriculture to food banks.  Advocates who support both programs object to increasing TEFAP at the expense of SNAP.  An amendment by Rep. Tim Johnson (R-IL) that takes $50 million from the $100 million increase in Community Food Project to incentivize the use of SNAP benefits to purchase fresh fruits and vegetables at farmers markets was approved.  Rep. Chellie Pingree’s (D-ME) amendment that allows SNAP participants to use their benefits to pay in advance for food provided through a Community Supported Agriculture program was also adopted.

After the Committee passed H.R. 6083, Department of Agriculture Secretary Tom Vilsack released a statement which in part says, “Unfortunately, the bill produced by the House Agriculture Committee contains deep cuts in SNAP, including a provision that will deny much-needed food assistance to 3 million Americans, mostly low-income working families with children as well as seniors. The proposed cuts will deny 280,000 children in low-income families’ access to school meals and reduce farm income across rural America. These cuts wouldn’t just leave Americans hungry – they would stunt economic growth.”

The Senate passed its bill, S. 3240, on June 20.  It contains a smaller $4.5 billion cut to SNAP and overall savings of $23 billion compared to $35 billion in the House bill.  Chances for floor action in the House may have increased because of bi-partisan support for the Committee bill.  However, Speaker John Boehner (R-OH) has not yet scheduled floor time for the bill, and could face opposition from within his own caucus, particularly among the tea party members.  Many Democrats will not support the bill because of the deep cuts to SNAP.  The current agriculture legislation expires on September 30.  If Congress is unable to agree on a way forward before then, it will have to pass at least a temporary extension of current law, which provides for annual spending of about $20 billion on commodity and crop insurance subsidies and $80 billion on SNAP.

The post CHN: House Committee Passes Farm Bill with Deep Cut to SNAP appeared first on Coalition on Human Needs.

As reported in the June 19 Human Needs Report, the full Senate took up the farm bill after an agreement to consider 73 amendments on the floor.  Before this agreement, the Senate had separately considered and rejected an extreme proposal by Senator Rand Paul (R-KY) to block-grant and slash SNAP/food stamps.  That failed on a bipartisan basis, with 65 senators agreeing to table the amendment.

Advocates had strongly backed an amendment by Senator Kristin Gillibrand (D-NY), which would have restored the $4.5 billion in SNAP cuts made in committee.  But Agriculture Committee Chair Stabenow (D-MI) worked hard to persuade her colleagues that rejecting this cut would place the deal around the entire bill at risk.  In the end, the amendment failed 33-66.  If the cut remains in the final farm bill, 500,000 SNAP households will lose $90 a month in benefits because states will no longer be allowed to coordinate benefits of SNAP and the Low Income Home Energy Assistance Program (LIHEAP).  Because LIHEAP funding is very limited, only about 20 percent of the eligible population receives home heating or cooling assistance, and those households receive very little.  The provision prohibited in the Senate bill makes it possible for households getting very little in LIHEAP funds to receive higher SNAP benefits based on a reasonable estimate of their shelter costs (which include home energy).  It was disappointing to advocates that the Senate was willing to cut SNAP benefits.  The House is expected to do worse, and if the farm bill ever gets to the point of being negotiated by a Senate-House conference committee, SNAP (and its millions of households in need) will be more vulnerable as a result.

But while the Gillibrand amendment did not succeed, neither did efforts to cut SNAP further.  There were several amendments to eliminate payments to states that serve as incentives for improving the administration of SNAP.  A Sessions amendment (S.A. 2172) would have eliminated these incentive payments altogether; it failed 41-58, with all Democrats joined by Republican Senators Brown (MA), Collins (ME), Heller (NV), Murkowski (AK), and Snowe (ME) in rejecting this cut.  Another amendment (S.A. 2360) to eliminate these state bonuses was introduced by Senator Boozman (R-AR).  While permanently eliminating the incentive payments to states, it would have redirected $43 million for only one year to The Emergency Food Assistance Program (TEFAP).  Feeding America, the organization which supplies emergency food to food banks across the U.S., opposed this amendment, even though they badly need an increase in TEFAP funds.  They recognized, however, that the permanent loss of funds that encourage better SNAP performance by states would hurt the same hungry families they are trying to serve – far too high a price to pay.  The amendment failed 35-63, with a dozen Republicans joining all Democrats in opposing.

An amendment aimed at cutting down the number of households qualifying for SNAP was introduced by Senator Sessions (R-AL).  It would have restricted the ability of states to determine households eligible for SNAP if they receive any form of assistance through Temporary Assistance for Needy Families (TANF).  Some low-income families with children do not receive TANF cash benefits, but do receive in-kind help with child care or transportation.  Now, some states determine households as eligible for SNAP if they receive such benefits without having to submit eligibility documentation all over again.  The Sessions amendment (S.A. 2174) would only allow this form of “categorical eligibility” if TANF recipients were getting cash assistance, resulting in an estimated 2-3 million low-income people losing SNAP benefits.  In addition, the Congressional Budget Office estimates that 280,000 children would lose free school lunch benefits, because children losing SNAP benefits would no longer be automatically deemed eligible for free school lunches.  This amendment failed 43-56, with Republican Senators Brown, Collins, Heller, and Snowe joining all Democrats in opposition.

The House Agriculture Committee is scheduled to take up its version of the farm bill on July 11.  It is expected to cut $16.5 billion from the nutrition title, all from SNAP.  In addition to the Senate’s Heat and Eat cut, the House bill would restrict categorical eligibility only to TANF recipients with cash assistance, as in the Sessions amendment described above.  This would cut more than $11 billion over 10 years.  It would also repeat the failed Senate proposals to end performance bonuses (a cut of $480 billion over ten years to states).

Many observers do not believe Congress will manage to agree on a final farm bill before the end of this year.  Whether or not work on the farm bill can be completed, anti-hunger advocates will work hard to let House members know that SNAP cuts affecting millions of people as expected in the House Agriculture Committee bill are unacceptable.

The post CHN: Farm Bill Passes in Senate; House Committee Action Expected July 11 appeared first on Coalition on Human Needs.

An amendment taken up prior to the full agreement would have eliminated the Supplemental Nutrition Assistance Program (food stamps, now called SNAP) and replaced it with a block grant with drastically reduced funding.  A radical approach proposed by Senator Rand Paul (R-KY), the Senate rejected it with a bipartisan vote of 65 – 33 to table (the procedural motion to oppose).  Among those voting, all Democrats supported the motion to block the Paul amendment; they were joined by 13 Republicans.

This year, SNAP is funded at about $80 billion; it serves over 46 million people.  Under the Rand proposal, funds would drop to $45 billion next year, and then be permanently fixed at that level, with no adjustments for rising food costs or caseload growth.  Over ten years, the Paul block grant would have slashed $322 billion from SNAP.  His amendment would also have eliminated The Emergency Food Assistance Program (TEFAP) and the Food Distribution Program in Indian Reservations (FDPIR), which supply food to food banks.

Among the 73 amendments to be debated this week, an amendment restoring $4.5 billion in SNAP funding was filed by Senator Kirsten Gillibrand (D-NY) is strongly favored by anti-hunger advocates.  The amendment (SA 2156) would undo a proposed cut of $90 a month in benefits affecting 500,000 SNAP participants (see Human Needs Report, April 30, 2012).  The Gillibrand amendment would also add $500 million over ten years for a fresh fruit and vegetable snack program.  It would be paid for by a reduction in crop insurance payments.

Anti-hunger advocates were pleased to see another extreme amendment dropped from consideration on the Senate floor.  An amendment offered by Senator Jeff Sessions (R-AL) would have denied SNAP assistance to all members of a household if any member of that household were unable to provide a limited set of documents showing that they were citizens or immigrants here legally.  This amendment (SA 2171) would have prevented poor citizen children in mixed households from receiving SNAP, even though they are eligible.  It would also have denied aid to many thousands of citizens who simply do not have the birth certificate or passport required as proof.  When similar restrictions were put in place for Medicaid and the Children’s Health Insurance Program, almost no undocumented people were found to be wrongly applying for these benefits, but thousands of children and seniors were denied medical help.  For example, Virginia and Kansas dropped 11,000 and 14,000 children from their Medicaid programs respectively because their families could not supply proper documentation; each state found one (1) person falsely claiming to be a citizen, according to the Center on Budget and Policy Priorities.

Some other amendments to cut SNAP will be considered on the Senate floor.  Another Sessions amendment (SA 2174) would limit a policy that has reduced the paperwork burden of applying for SNAP benefits.  Now, households applying for SNAP who have previously qualified for cash or non-cash TANF benefits or certain other assistance programs are deemed eligible for SNAP without having to supply all their eligibility documentation all over again.  This Sessions amendment would limit this streamlined approach (called “categorical eligibility”) to those receiving TANF cash assistance.  Low-income working families now qualifying for SNAP because they receive only non-cash child care or transportation assistance from TANF will now have to jump through more documentation “hoops.” This restriction would cause an estimated 2-3 million people to lose SNAP benefits, and would result in 280,000 children losing free school meals.

Two amendments to eliminate incentive payments to states under SNAP will get Senate floor time:  Another Sessions amendment (SA 2172) would end the $48 million in annual payments, which have been effective at improving state approaches to reach more people in need who qualify for SNAP benefits.  A Boozman (R-AR) amendment (SA 2360) also eliminates the incentive payments, but in FY 2013 alone takes $43 million that would have been spent on these payments and uses it instead to fund emergency food aid for food banks (through TEFAP, The Emergency Food Assistance Program).  Feeding America, which provides food to food banks nationwide and is struggling to meet growing need, opposes this amendment, saying “…these investments must not come at the expense of SNAP.”

In contrast to these cuts, a Nelson amendment (SA 2243) would maintain SNAP’s effectiveness by requiring states to reinvest performance bonuses they receive in their SNAP programs.

Once action on all the amendments is completed and the full farm bill is approved in the Senate, the House will have to act and differences between the two bodies resolved before a bill can become law.  The Senate’s agreement to move forward signals that the farm bill is one area where both parties see a need to get results before the election.

The post CHN: Senate Rejects Extreme Food Stamp Proposals in Farm Bill; Agreement is Reached to Bring 73 More Amendments to the Senate Floor appeared first on Coalition on Human Needs.

SNAP is a highly effective anti-hunger program that helped provide food to more than 46 million low-income persons in January 2012.  Approximately 92 percent of the program cost goes directly to beneficiaries to purchase food with the remaining used primarily for administrative costs.  Program critics have attacked the steep increase in program participation during the last several years. The increased participation rates reflect the counter-cyclical nature of the program which is designed to expand to meet the need when the economy is in a downturn.  Contrary to inflated allegations of fraud and abuse in SNAP, according to the Center on Budget and Policy Priorities the combined error rate (overpayments and underpayments) was at an all-time low of 3.81 percent in 2010.  Nonetheless, one change made in the nutrition title of the bill lowers the quality control tolerance threshold from $50 to $25.  Minor errors in the $25-50 range will increase states’ payment error rates, subjecting the program to more allegations of fraud and abuse.

Several programs in the nutrition title of the bill would receive modest increases from reinvesting a small portion of the SNAP cut.  Mandatory funding for the Emergency Food Assistance Program (TEFAP) commodity purchases is increased by $150 million over 10 years, frontloaded in the first years in light of the immediate need.  The bill provides $5 million annually for Community Food Projects.  The bill would add $185 million over 10 years to prevent the sale of SNAP benefits.  The net cut to the nutrition title of the bill is $4.024 billion over 10 years.

In total, the Agriculture Reform, Food and Jobs Act of 2012 would save $24.7 billion over 10 years.  In addition to the SNAP cuts, the bill would end direct payments to grain and cotton farmers, consolidate farm and conservation programs and tighten restrictions on federal payments to farmers.  The bill passed the Committee by a vote of 16-5 with Senator Gillibrand (D-NY) the lone Democrat opposing the bill due to its deep cuts in SNAP.  She plans to offer an amendment addressing the cut when the bill comes to the Senate floor.  Four Southern Republican Senators – Boozman (AR), Chambliss (GA), Cochran (MS), and McConnell (KY) – opposed the bill due at least in part to treatment of commodities grown in their states.  Committee Chairwomen Stabenow (D-MI) has agreed to work with them to address their concerns.

The current farm law expires on September 30.  It will be a challenge to complete a reauthorization bill to meet that deadline.  It is expected that a temporary extension of current law will be needed.

The post CHN: Senate Takes First Step to Reauthorize the Farm Bill; SNAP/Food Stamps Cut appeared first on Coalition on Human Needs.

The Senate bill took $2.2 billion from SNAP by advancing the cut to 2013, and also took $1.3 billion from SNAP nutrition education funding, to pay for most of the child nutrition provisions.  These offsetting sources of funding were seen as acceptable to Republicans who might otherwise have stood in the way of the Senate bill’s passage.

In the House, however, enough opposition arose to further cuts in SNAP that the House leadership saw it would be impossible to get the two-thirds needed to pass the bill.  One clear sign of House concerns was an August 13 letter to the Speaker signed by 106 Representatives opposing additional SNAP cuts.  The House leadership agreed to seek other offsets and to work towards expanded access to meals programs for low-income children in final negotiations with the Senate and the Administration, in hopes a final bill can be approved during the lame duck session.

The new poverty data released by the Census Bureau in September underscored the importance of adequate SNAP benefits.  According to the Census Bureau, in 2009 SNAP aid, if counted in the official poverty measure, would have lifted 3.6 million people out of poverty.  With nearly one in four children under age 5 living in poverty, SNAP benefits are particularly important, since children not yet in school do not benefit from school meals programs.  Advocates are hoping that Congress and the Administration can agree on a means of funding much-needed child nutrition improvements that does not come at the expense of child nutrition.

The post CHN: Child Nutrition Renewal Pushed into Lame Duck Session; House Objects to Cutting Food Stamps to Pay for It appeared first on Coalition on Human Needs.

To ensure that the proper procedures were followed, Congressional leaders scheduled votes on the complete Food, Conservation, and Energy Act of 2008, H.R. 6124. Before adjourning for the Memorial Day recess the House passed the new bill, 306-110. The week the Senate returned from recess, on June 5, it passed the bill by a vote of 77-15. On June 18, as expected, the President vetoed the bill. That same day both the House and Senate overrode the President’s veto by votes of 317-109 and 80-14, respectively, leaving no doubt that the farm bill was now law in its entirety.

The farm bill, which is now Public Law 110-246, has a $289 billion price tag, of which more than $10 billion is for increases for domestic nutrition programs over ten years. Of the $10 billion:

• $7.8 billion is for The Food Stamps program, which has been renamed the Supplemental Nutrition Assistance Program (SNAP);
• $1.26 billion is additional funding for the 2008 to 2017 period for The Emergency Food Assistance Program (TEFAP), which purchases food for the emergency feeding organizations; and
• $1 billion is for the free Fresh Fruit and Vegetable Programs targeted to schools with large shares of low-income families over the 2009 to 2017 period.

The farm bill makes numerous important improvements to the Food Stamps program. For starters, it raises the minimum food stamp benefit individuals can receive for the first time in 30 years and indexes it for inflation. The $10 a month minimum benefit level will increase to about $14 in October of this year, with adjustments for inflation in later years. As a result, approximately 78,000 people, mainly seniors and people with disabilities, will receive a higher minimum benefit. The standard deduction for food stamps, frozen since 1995, will also be raised from $134 to $144 and indexed for inflation. Retirement accounts and education accounts would no longer be counted when determining a household’s eligibility for food stamps, and the cap on the dependent care deduction would be eliminated, allowing families to deduct the full amount of dependent care costs they incur. It is estimated that this change will provide an average of $500 a year to about 100,000 working households that pay high child care costs.

Other changes to the food stamp program include:

• Indexing the current $2,000 and $3,000 asset limits for inflation;
• Giving states the option to allow households to apply for food stamps over the phone; and
• Phasing out the food stamp coupons.

All of the food stamp provisions will go into effect October 1, 2008.

For a more detailed summary of the food stamp provisions enacted through H.R. 6124, see the Center on Budget and Policy Priorities paper, “Food Stamp Provisions of the Final 2008 Farm Bill” at: http://www.cbpp.org/5-23-08fa.htm.

The post CHN: Without a Doubt, Farm Bill Becomes Law appeared first on Coalition on Human Needs.