Budget Committees Endorse Bush Tax Cut at the Expense of Vulnerable Americans
A week after the Congressional Budget Office (CBO) projected that the President’s tax cut plan would lead to a $1.8 trillion deficit over the next decade, the House and Senate Budget Committees marked up their respective budget resolutions for fiscal year 2004 – which largely endorse Bush’s proposal. To afford the huge tax cuts they favor, Budget Committee Chairmen in both chambers put forth resolutions that drastically under fund vital social safety-net programs.
In the House, Budget Committee Chair Jim Nussle (R-IA) introduced a package that would – similar to the President’s plan – cut taxes by almost $1.4 trillion over the next ten years. This figure includes $726 billion for Bush’s “economic stimulus” plan. To offset the costs of these tax cuts and achieve a balanced budget by 2010, Nussle would slash $470 billion from mandatory spending programs.

Under the Nussle plan, Medicare would see its funding drop by around $214 billion, while Medicaid expenditures would be cut by about $93 billion over the next decade. Food stamps, child nutrition programs, school lunches, veterans programs, and student loans are among the other vital services that would be cut. The House Budget Committee approved the GOP resolution by a 24-19 party-line vote on March 13.

The Senate Budget Committee approved its FY 04 budget resolution on March 13 as well, by a 12-11 partisan vote. Like its House counterpart, the Senate measure endorses President Bush’s tax cutting agenda, although it does not cut mandatory programs. Instead, the Senate measure freezes funding for key social programs and uses a plethora of unrealistic assumptions about future spending to pay for the tax cuts and achieve a balanced budget by 2013.
Democrats and some moderate Republicans object to the GOP budget blueprints, arguing that they will worsen the country’s deficits while doing nothing to stimulate the economy, and reap benefits on the wealthy while slashing programs that assist moderate- and low-income families. Many members of both parties also oppose supporting massive tax cuts at a time when a war with Iraq – the costs of which are unknown – appears imminent.

Attempts by centrist Senators to force a compromise at the committee level were unsuccessful. Democrats John Breaux (LA) and Max Baucus (MT) teamed up with Republicans George Voinovich (OH) and Olympia Snowe (ME) to push a measure that would cut Bush’s tax plan by more than half, to $350 billion. While the Moderates’ plan failed to generate enough Republican support to affect committee deliberations, it may still prevail on the Senate floor. For their part, liberal Democrats in both chambers favor a budget that greatly minimizes tax cuts, and instead provides for party priorities such a prescription drug benefit for seniors.

Both the House and Senate are expected to vote on their respective budget resolutions next week. Anti-poverty advocates are urging lawmakers to reject the GOP-backed plans, arguing that they will seriously undermine the programs and services that provide a lifeline to the nation’s vulnerable populations.

DEBATE CONTINUES OVER TANF REAUTHORIZATION IN 108th CONGRESS
Senate Finance Committee Hearing Reveals Concerns Over Childcare and Work Hours

The Senate Finance Committee, now chaired by Republican Senator Charles E. Grassely (IA), held a hearing on Wednesday to address the reauthorization of Temporary Aid for Needy Families (TANF). The House passed its welfare bill (HR 4) on February 13, by a vote of 230 to 192. The bill is nearly identical to both the Bush Administration’s reauthorization proposal and the bill passed by the House last year on an essentially party-line vote.

Last year, under Democratic control, the Senate Finance Committee approved a bill to maintain current law’s 30-hour workweek requirement for TANF recipients, provide an additional $5.5 billion in childcare funding over the next five years, to give states the option of restoring cash benefits to legal immigrants, and to provide some participants with health insurance under Medicaid and the State Children’s Health Insurance Program (SCHIP). In contrast to last year’s Finance Committee bill, HR 4 mandates an increase in work requirements to 40 hours per week and a decrease in childcare funding – a $1 billion addition over five years, only $200 million of which would be mandatory.

A few Republican and all Democratic Senate Finance Committee members at Wednesday’s hearing expressed concern that this increase in childcare money is far from sufficient to meet current need, let alone the demand that would be produced by an increase in work hour requirements. The Congressional Budget Office (CBO) estimates that even without changes in work requirements, an additional $5 billion in childcare funding over the next five years would be required to meet current need. While the administration contends that HR 4 will increase state flexibility, advocates believe that added work mandates without matching childcare dollars would greatly reduce states’ flexibility to structure their programs.

Health and Human Services (HHS) Secretary Tommy Thompson served on the first of two panels at Wednesday’s hearing. Thompson fielded questions challenging HR 4 with statements of support for what he called the four principles of the Bush welfare plan: promoting more work for more recipients; promoting “strong families” through the marriage initiative; state flexibility; and “compassion to those in need.”

Heavy-handed work requirements and insufficient childcare funding will likely continue to be the two main points of contention in the Senate’s attempt to reauthorize the 1996 legislation. TANF is currently funded through the fiscal 2003 omnibus appropriations bill (HJ Res 2 – PL 108-7), which extended the law through June of this year. Aides to Chairman Grassley have said that the Senator plans to finish TANF reauthorization this year. Grassley is working with members to produce a bipartisan bill that will likely be introduced after work is completed on an economic stimulus package and Medicare overhaul legislation.

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