Congress has delayed by one month its plans to cut $35 billion from services that mostly help low-income individuals, such as Medicaid, Food Stamps and student loans. Plans for an additional $70 billion in new tax cuts have also been delayed. (See September 16 Human Needs Report .)
Although some members of Congress continue to be uncomfortable making cuts to vital services, others justify cuts as a way to pay for the high costs of Katrina recovery. The original budget resolution set September deadlines for various committees to cut spending from mandatory programs by a total of $35 billion and for the tax writing committees to produce a bill cutting taxes by $70 billion. Mandatory programs include Medicaid, Food Stamps, Temporary Assistance for Needy Families (TANF), the Earned Income Tax Credit and Supplemental Security Income (SSI).

A group of 100 conservative House members released a report September 21 calling on Congress to find “offsets” for hurricane relief – in other words, cut spending to pay for the costs. Many of the offsets chosen by the Republican Study Committee (RSC) are not palatable politically and will not end up in any legislation. But it is worth noting that many of their options for place the burden on low-income families (such as Medicaid cuts).

Other members of Congress have raised the possibility of making steep across-the-board cuts to programs funded through the annual appropriations process. Education, child care, Head Start, veteran’s benefits, education for children with disabilities, certain nutrition programs, and many other services are funded through the appropriations bills – and would be at risk for deep cuts.

A number of advocates view with some surprise Congress’s newfound concern about spiraling deficits. The deep tax breaks of 2001 and 2003 that overwhelmingly benefited the wealthiest Americans were not paid for – and contributed mightily to the deficit. This year people earning more than $200,000 will get back more than $250 billion from the 2001 and 2003 tax cuts.

The budget resolution would actually make the deficit worse – because the new tax breaks are twice the size of the spending cuts. Those tax breaks are expected to include extending the reduced capital gains and dividend rates for investors.

Advocates are gearing up to meet with their members of Congress during the District work period the week of October 10 through 14. The Coalition on Human Needs and other groups are organizing call-in days on October 17 and 18 to tell Congress to abandon its plans to cut services for the poor while cutting taxes for the rich.

Gene Sperling of the Center for American Progress writes with clarity about this topic: Deficits and Katrina: Right Topic, Wrong Question

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