CHN: Reconciliation Instructions Put Human Needs Programs at Risk

Armed with the budget blueprint they approved on April 28, members of Congress are beginning to contemplate how to meet the blueprint’s requirements to cut spending on low-income programs. In June and July, Congressional committees will begin writing legislation that will cut spending and reduce taxes as part of the reconciliation process. But tough talk from at least one powerful House member has made advocates worry that Congress will go even farther than the budget resolution in making cuts to human needs programs.
The budget resolution requires the House Committee on Energy and Commerce and the Senate Finance Committee to pass legislation that finds a net $10 billion in savings. (See Medicaid story, this issue.) The resolution assumes those “savings” (cuts) would come from the Medicaid program. The House and Senate Agriculture committees are tasked with cutting $3 billion from programs under their jurisdictions – some of which could come from Food Stamps.

The House Education and Workforce Committee and the Senate Health Education, Labor and Pensions (HELP) Committee must cut more than $12.7 billion from their programs. The Center on Budget and Policy Priorities estimates that this could include student loan cuts of as much as $7 billion over five years. All of these cuts must be developed bySeptember 16. In the Senate, a reconciliation bill will need just 51 votes for passage – not the typical 60 votes required for most legislation.

But the cuts to the mandatory programs as outlined in the budget resolution may be just a floor – not a ceiling. Chairman of the House Ways and Means Committee Bill Thomas (R-CA) – whose committee must only find $1 billion in cuts over five years – has said he may produce a bill with deeper cuts. Mandatory programs under the Ways and Means Committee include SSI, the Earned Income Tax Credit (EITC), child welfare programs, child care, child support, and Temporary Assistance for Needy Families (TANF).

If Chairman Thomas chooses to target SSI, he may try to change the definition of disability in order to generate the “savings,” making it more difficult to qualify. Such a move would be strongly opposed by people with disabilities and advocates for the vulnerable.

If Congress first reduces assistance for people with disabilities and the poor while cutting taxes for the wealthy a week later, certain awkward questions of fairness are bound to be raised.

Congress initially wanted to keep separate its actions to cut taxes and services, to minimize the awkward questions. But the budget resolution only left a week in between the reconciliation bill dealing with spending cuts (September 16) and the one for tax cuts (September 23). If the bills remain separate, that poses a technical roadblock to making cuts in the EITC (because EITC cuts across spending and tax provisions). If Congressional leaders conclude that there are no longer “message” advantages to considering two separate bills just a week apart, they may combine them. Limiting or ending the EITC for certain tax filers would then be in order. Since House Budget Chairman Nussle (R-IA) had initially singled out the EITC as a potential source of cuts, advocates will watch the reconciliation developments closely. For more about a tax reconciliation bill, see article this issue.

Advocates for low-income people, the elderly, children and people with disabilities will spend this summer demanding that members of Congress draft reconciliation bills that do not harm the most vulnerable.

Better Budget for All
Budget and Appropriations
Budget Report 2012 - Self-Inflicted Wounds
child nutrition
Fact of the Week
Food and Nutrition
Income Support
Labor and Employment
Our American Story
Policy Analyses and Research
SAVE for All
Social Services
tax policy
Temporary Assistance for Needy Families
unemployment insurance