Congress Passes Fiscal Year 2006 Budget with Severe Cuts
in Domestic Programs
by Mary A. Cooper
Although FY 2006 began on October 1, Congress did not finish work on the budget
for that period until February 1. Late last year the House and Senate passed
slightly differing versions of a budget reconciliation measure that would cut
nearly $40 billion over five years from programs such as Medicaid, welfare, child
support enforcement, and student loans in order to make a small start on reducing
the massive federal deficit. A final vote by the House, accepting the Senate's
small changes, was required after the House returned from a six-week holiday
recess.
Religious groups worked during the holiday break with social service and public
interest organizations to persuade Representatives to change their votes. The
Stated Clerk of the Presbyterian Church (USA) joined heads of four other major
denominations in sending a letter to House members that said the budget package's
provisions "benefit the rich but are paid for by the poor and most vulnerable
in our land," adding that "the final legislation is harsher for those
must vulnerable and in need than previously understood."
The measure had originally passed the House narrowly on a 212-206 vote and
the Senate tied at 50-50, with Vice President Cheney casting the tie-breaking
vote for passage. The budget reconciliation bill was even more narrowly passed
on February 1, by a final vote of 216-214. Several Republicans changed their
votes, joining House Democrats in opposition. Three House Members were absent.
President Bush signed the bill into law on February 8.
TANF
Among features opposed by the religious community, the legislation reauthorized
TANF for five years, despite the fact that the Senate had not debated or voted
on the measure. The TANF provisions require the states to put greatly increased
proportions of their welfare population to work, without providing resources
to help them accomplish the new goals. Only $1 billion in additional child care
funding is provided over five years, despite the increased work requirement.
Other Cuts
A heavy burden falls on recipients of Medicaid under the reconciliation bill.
The Congressional Budget Office estimates that 13 million poor recipients will
have to pay more toward their health costs while 65,000 now on Medicaid will
lose their benefits. The cost for collecting child support from non-custodial
parents will be shifted from federal to state governments, and interest rates
on some student loans increased.
Post-Katrina in New Orleans
In the more than five months since hurricanes devastated the Gulf Coast, so
little progress has been made at returning the area to livability that some residents
of New Orleans describe themselves as living in Limbo Land.
Because their housing and places of work were destroyed, hundreds of thousands
left the Gulf area for shelter and employment elsewhere. Consequently, businesses,
especially in Louisiana and Mississippi, do not have enough staff to serve their
customers or enough clients to provide the income to hire staff. Although gambling
boats are back in operation and restaurants are serving meals again, many hotels
were damaged. Those that were not are filled with relief workers, construction
crews, and displaced residents, leaving little space for tourists who are the
life-blood of the area. Until housing, health care, and public services are
restored, visitors will not come and former residents cannot return. Without
them, the communities do not have the tax base to pay for their most basic needs.
The federal and state governments have not provided the assistance that would
make it possible for devastated areas to recover. Thousands of homes and businesses
are still without electricity and clean water. In New Orleans, only one-third
of the hospitals are functioning and just 15 percent of the schools have reopened.
Automobiles and homes destroyed by flooding still litter the streets and sidewalks,
making debris clearance difficult. Public transportation systems have too few
riders to operate efficiently.
One of the greatest problems is that nobody seems to know where or when clearance
and rebuilding will begin. People whose houses might be repairable often do not
have operating utilities and are afraid to invest in repairs, only to be told
later that their homes have been condemned. The Federal Emergency Management
Agency (FEMA) is expected to provide maps in the spring that will show which
areas can rebuild and where people will be able to get flood insurance, but the
guidelines for reconstruction may not come out until August, well after the start
of the next hurricane season.
The plight of the area was summed up in an understated fashion by two people
from Louisiana interviewed by The Washington Post. Said a lawyer, "Nobody
is doing any business*.We don't have a lot of commerce." Another, whose
house was not seriously damaged, said he would bring his family home except that
the schools are still closed and his business has been destroyed. "We'd
like to move back, he said, "but the future of New Orleans is so uncertain."
FY 2007 Federal Budget
On February 6 President Bush's $2.77 trillion proposal for FY2007 arrived
on Capitol Hill. In it, as well as in his State of the Union address, the President
declared his intent to cut the federal deficit in half by the end of the decade
through restraining growth in spending. He proposed no new taxes and no tax increases,
and thus no new source of income. The State of the Union message did not mention
tax reform, instead stressing the importance of making current tax cuts for the
affluent permanent.
The Administration's plan would increase the deficit from $318 billion last
year to $423 billion in 2006, projecting it to drop to $183 billion in 2010.
These reductions are based on extremely optimistic assumptions, including the
unlikely projection that there will be no military expenditures for either Iraq
or Afghanistan after 2007. Another assumption is that Congress will reduce domestic
spending in every year after 2007, and no provision is made for unforeseen disasters
such as another severe hurricane season.
The largest increases are proposed for the Departments of Defense and Homeland
Security. The deepest cuts are proposed for the Departments of Transportation,
Justice and Agriculture, which funds nutrition assistance programs.
Despite committing in the State of the Union message to expand health care,
primarily through expanded access to Health Savings Accounts, Medicare and Medicaid
are slated for cuts. In his message transmitting the budget to Congress, the
President called the cost of entitlement programs that provide a safety net for
the poor, the elderly and the disabled "unsustainable," saying they
present "the biggest challenge to our nation's fiscal health." Specifically,
Mr. Bush has called for cutting $65 billion in entitlement spending over the
next five years, with $36 billion coming from the Medicare program for older
and disabled individuals.
Hurricane Relief
In the State of the Union message, President Bush made only a passing reference
to the plight of those whose lives and homes were shattered by Hurricanes Katrina
and Rita. The FY2007 budget would provide for modest increases in overall disaster
preparedness and response for future events. In fact, one of the funding cuts
proposed would take $15 million from states that is designated for disaster evacuation
plans. The Administration, in a separate supplemental funding measure, has asked
Congress for $18 billion in hurricane relief, bringing the total for the current
year to nearly $100 billion. Sen. David Vitter (R-LA) protested the absence of
funds in the 2007 budget, saying "... any suggestion that that's it for
a couple of years would be disastrous to the recovery."
Social Security
The President's Social Security privatization proposal makes another appearance
in the 2007 budget. Although Administration officials say it will eventually
save money, they acknowledge that the transition to private accounts would cost
$712 billion over the first ten years. The budget includes benefit cuts for Social
Security recipients. It would eliminate the $255 lump sum payment to surviving
dependents that many families use for funeral costs. Another provision would
require that dependent children aged 16 and older attend school in order to continue
to receive survivor benefits.
Programs to be eliminated if the Administration has its way:
- The Commodity Supplemental Food Program, which provides nutritious
food packages for less than $20 per month for 400,000 low-income elderly people;
and
- The Community Services Block Grant, which funds social services and
other aid for impoverished families and elderly and disabled people.
- Programs proposed for deep cuts include:
- Housing for low-income elderly and disabled people, slated for reductions
of 26 percent and 50 percent respectively; and
- Subsidized child care for low- and moderate-income families. The
Administration proposes to cut $1 billion over five years, eliminating child
care for 400,000 children by 2011.
Many Republicans have expressed grave concern about the President's budget
saying it does too little to restrain spending and cut the burgeoning deficit.
On the other hand, Rep. John M. Spratt, Jr. (D-SC), senior Democrat on the House
Budget Committee, said "A budget is a statement of moral choices, and this
budget makes the wrong choices." It is now Congress' turn to develop their
budget proposals for fiscal year 2007. Action on House and Senate budget resolutions
is expected in March.
Minimum Wage
Since this is an election year, Congress probably will concentrate on the
budget and a few other major issues that must be dealt with before adjourning
to go on the campaign trail. Few new initiatives are likely to be considered,
but one perennial issue important to low-income workers will be the focus of
attention for the advocacy community.
Proposals to raise the minimum wage have been put forward every year since
it was last increased in 1997, when the federal minimum was raised to $5.15 an
hour, for an annual income of $10,712 for a person working 40 hours a week, 52
weeks a year. The U.S. Department of Health and Human Services 2006 poverty line
for a family of three is $16,600, meaning that a single parent with two children
and a full-time minimum wage job would earn nearly $6000 below the poverty line.
Opponents of an increase contend that minimum wage workers are mostly teenagers
working part-time to earn petty cash to pay for luxuries. In truth, according
to the Economic Policy Institute, more than 70 percent of minimum wage earners
are adults and nearly half work full-time. Many are retirees who have gone back
to work to supplement meager pensions.
For the last several years, Sen. Edward M. Kennedy (D-MA) has led efforts
in Congress to raise the minimum wage. He has proposed increasing the figure
to $7.25 per hour, with an increase of 70 cents upon passage of the legislation,
another 70 cents a year later, and the final 70 cents the following year. The
religious advocacy community supports this effort and will work for its passage
in conjunction with the Let Justice
Roll Living Wage Campaign,
a joint effort of many state and national religious and anti-poverty groups.
General Assembly
The 207th General Assembly (1995) of the Presbyterian Church
(U.S.A.) called on Congress "to defeat any proposals that base budget or
deficit reductions primarily on the services provided to children, families,
the needy, and the homeless" and urged strengthening of federal commitments
to these groups. The Assembly also called on Congress "to insist on a government
that follows ethical values of justice for the poor, welfare for children, hospitality
to the stranger, and assistance to the disadvantaged." (Minutes,
p. 718)
Minimum Wage: "In light of the growing disparity in household income
and the past positions of the General Assembly," the 200th General Assembly
of the Presbyterian Church (U.S.A.) "urge[d] the President and Congress
of the United States to raise the minimum wage to its historical level of 50
percent of the average non-supervisory, nonagricultural wage and provide for
regular increases that will keep the minimum wage at an adequate level to lift
people out of poverty." According to the Bureau of Labor Statistics, the
average hourly earning of production workers was $15.85 in 2004.
Budget: The 200th Assembly also urged the President and Congress "to
oppose further cuts in social programs that benefit poor people and to increase
support for programs unable to serve all eligible persons due to lack of funds." (Minutes,
PC(USA), p. 364)
Social Security: In 2004, the 216th General Assembly of
the Presbyterian Church (U.S.A.) passed a resolution Reaffirming the Importance
of Our Nation's Social Insurance System (Social Security and Medicare) and called
for supporting and maintaining the fundamental structure and intent of Social
Security, expressly that it continue to be:
- universal, covering all persons in paid employment and their families,
- compulsory, requiring all working Americans to contribute to our future
security,
- an earned right, based on contributions out of past earnings rather than
charity,
- contributory and self-financed, out of dedicated taxes, e.g. wage-related
rather than means tested,
- protected against inflation, by periodic, guaranteed, cost-of-living adjustments,
and
- backed by the full faith and credit of the United States, rather than
depending on the erratic performance of the stock market or the unpredictable
financial stability and profit interests of a private company.
Katrina Resources:
Rebuilding Just Communities: On April 23 or another dedicated
Sunday, celebrate God's creation with the 2006 Earth Day Sunday Resource. Each
year, the National Council of Churches'
Eco-Justice Program with the Eco-Justice
Working Group produced Earth Day Sunday resource materials for congregations
wishing to explore issues pertaining to caring for God's creation. |
