CHN: Reconciliation Delayed: Congress Puts Off Cuts to Medicaid and Food Stamps In the Wake of Hurricane Katrina

As they struggle to respond to needs created by Hurricane Katrina, Congress has pushed back its timetable by at least one month for making deep cuts to mandatory programs and passing more tax cuts.
The budget resolution Congress agreed to earlier this year set a deadline of September 16 for various committees to cut spending by a total of $35 billion. Medicaid was targeted for up to $10 billion in cuts. The Agriculture Committee (which has jurisdiction over farm subsidies and food stamps) would have to cut programs by $3 billion. In addition, the resolution set a target of September 23 for $70 billion in additional tax cuts.

Those dates have slipped, however. Earlier this week Senate Republican leaders announced authorizing committees (such as the Senate Finance Committee) would have until the week of October 17-21 to produce their individual bills making cuts. The Budget Committee would have until the week of October 24-28 to wrap those bills into one package. That package would then be sent to the Senate floor for a vote. The House will follow a similar schedule.

The fate of the $70 billion tax cut legislation as prescribed by the budget resolution is somewhat more murky. Some Congressional staff have speculated that Congress will move the tax cuts in early November. It is also possible Congress will scrap the planned tax cuts or wrap them into a wider “Katrina relief” tax package.

Although Senate Budget Committee Chairman Judd Gregg (R-NH) remains adamant that Congress must cut mandatory spending, Democrats and some Republicans are expressing reservations about cutting the Medicaid and Food Stamps in light of the soaring need caused by the hurricane disaster.

A bipartisan group of Senators sent a letter to Finance Committee Chairman Charles Grassley (R-IA) asking him to indefinitely postpone reconciliation:

Republican Senators Gordon Smith (OR) and Olympia Snowe (ME) signed on with Democrat Senators Jeff Bingaman (NM) and Blanche Lincoln (AR). Another bipartisan group of Senators sent a letter to the Agriculture Committee Chairman Saxby Chambliss (R-GA) and Ranking Member Tom Harkin (D-IA) asking them not to cut food stamps when it makes decisions about where to trim $3 billion: Republican signatories to the food stamps letter are Senators Smith, Snowe, Dole (NC), Specter (PA), Collins (ME), DeWine (OH), Hatch (UT) and Chafee (RI).

Human needs advocates will continue to press Congress to give up its reconciliation plans entirely. A New York Times editorial of September 14 points out the senselessness of going forward with cuts while at the same time granting emergency Medicaid and food assistance for those affected by the hurricane:

Poverty is increasing and there are more uninsured, according to new Census data: An ongoing lack of public investment in poor communities surely contributed to the scope of disaster. Noting persistent racial and economic disparities made so visible by the hurricane, many organizations have issued particularly eloquent statements tying these themes together. Representatives of several mainline Protestant churches wrote a letter to Congress noting the increase in poverty reported by the Census Bureau as disaster struck the Gulf Coast. It continues: “Believe us when we tell you that even before Hurricane Katrina or the Census Bureau’s report, neither we nor our friends of other faiths had the resources to turn back the rising tide of poverty in this country. The FY ’06 reconciliation bill that is working its way through the authorizing committees will send more people searching for food in cupboards that, quite frequently, are bare.”

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