2005 Still Lingers on Hill

Published: January 16, 2006

by: Jan Richter

The ball dropped. The champagne flowed. But at least on Capitol Hill, 2005 is stubbornly hanging around. Republican leaders were unable to get the House and Senate to pass identical versions of the 2005 budget reconciliation bill, so the legislation faces a final vote in the House on February 1. Meanwhile, Congress is contemplating more tax changes.

Congress worked up to the last minute in 2005 on a budget reconciliation bill that includes cuts to federal spending in bedrock social programs like Medicaid, student loans, child support enforcement, and child care assistance.

But in the face of increased resistance from Democrats and moderate Republicans, the GOP leadership was unable to get both the House and Senate to pass identical reconciliation measures. Changes made by the Senate in the waning days of 2005 will require the House to vote one more time on the final budget reconciliation bill.

That vote is scheduled for February 1, 2006. Advocates see this as a last chance to forestall final approval of five-year cuts [1] that could make it harder for children to see a doctor, get quality child care or college aid.

At the same time, Congress is poised to vote on a tax reconciliation bill that will cost another $60 billion [2] and according to an analysis by the Center for Budget and Policy Priorities will target benefits to the top one in a hundred taxpayers.

The Congressional Budget Office [3] documents that the 2001 and 2003 tax cut laws already gave the poorest one-fifth of the country, almost 23 million households, a tax hike in 2003, while those with low and modest incomes got refunds from $100 to $300. The real winners were the million households making over $700,000 in after-tax income. They got a tax cut worth an additional $53,300 in 2003.

Here are the details.

It took the vote of Vice President Dick Cheney to break a tie in the Senate on the budget reconciliation bill. As approved on December 21, the legislation would cut federal spending by nearly $40 billion over the next five years. It makes significant cuts to Medicaid, mandates welfare changes that will encourage states to cut child care and other aid to poor families, changes child support enforcement in a way that some estimate will reduce payments to families by over $8 billion in the next ten years, and continues to provide far too little in federal funding to provide child care assistance for eligible working families.

Food Stamps, initially a target for cuts, were spared [4].

A Center on Budget and Policy Priorities summary of Congressional Budget Office figures finds that the budget plan would impose greater hardships on low-income families [5] by allowing states to limit benefits and require families to pay higher Medicaid co-payments and premiums, a step which many states will be forced to do because of fewer federal dollars to help them meet Medicaid costs.

There is also a new provision to require patients to show a birth certificate or passport [6] in order to receive Medicaid-covered medical services. Advocates fear that could exclude many eligible immigrant families and older African-Americans from receiving needed health care, for lack of documents.

The budget bill would also cut federal student loan assistance [7] by $12.7 billion over five years.

While the cuts in critical social programs are about $10 billion less than the $50 billion proposed when Congress began its budget process, many advocates for children and families are still worried about the harm to low-wage families and vulnerable children from the budget's cuts [8] in health care, student loans, child support enforcement, aid for foster families, and child care assistance.

Federal Spending Bills Cut Funds that Serve Children

Education, child nutrition programs, job training and a host of other family services are funded through the discretionary part of the federal budget, requiring annual appropriations to be approved each year. In the last days of 2005, Congress passed and President Bush signed into law two spending bills which make major cuts in education and other public services.

The biggest domestic spending bill [9], the Labor-HHS-Education appropriations bill, cut education spending for the first time in a decade.

"When it comes to public education, the actions of Congress, particularly in the final days of this session, have been abysmal," [10] says Joan Schmidt, President of the National School Boards Association.

The defense spending bill, passed in the last day of the 2005 session, included a one-percent across-the-board spending cut [11] for all federal discretionary spending, except that for veterans—an across-the-board cut that will cut even more federal dollars from schools, job training, community development block grants and a host of other public services.

The National Association for the Education of Young Children says the one-percent across-the-board cuts in the defense spending combined with cuts in the Labor-HHS-Education spending bill will cut funding for many education programs by millions of dollars below FY05 levels: $126 million-cut from Even Start funding, $20.8 million cut in the Child Care Development Block Grant, $57 million cut in Head Start, a $9.9 million cut in 21st Century Community Learning Centers (after school programs) and a $126 million cut in Title I grants for schools serving disadvantaged students.

The Senate also stripped a provision from the conference report [12] that would have allocated an additional $2 billion to home heating assistance programs this winter.

Can We Expect Better Budget News in 2006?

President George W. Bush is expected to propose more cuts in mandatory programs as well as discretionary spending in his budget proposal scheduled to be released to Congress on Feb. 6.

Conservative leaders in Congress are also expected to push for more cuts to entitlement programs and spending bills, while at the same time trying to make permanent the temporary tax cuts passed in 2001 and 2003.

But faced with mid-term elections and voter dismay over Congressional ethics, domestic spying, and other issues, there is some hope among advocates for children and families that legislators may be paying more attention to issues such as schools, health care, and jobs that pay a living wage.

Source URL:
http://www.connectforkids.org/node/3850

Links:
[1] http://www.connectforkids.org/action_central
[2] http://www.cbpp.org/12-7-05tax.htm
[3] http://www.cbo.gov/ftpdocs/70xx/doc7000/12-29-FedTaxRates.pdf
[4] http://www.clasp.org/federal_budget/index.htm
[5] http://www.cbpp.org/11-7-05bud2.htm
[6] http://www.cbpp.org/1-5-06health.htm
[7] http://www.frac.org/Legislative/Budget_06/Alerts/12.20.05.html
[8] http://www.cbpp.org
[9] http://www.pta.org/ia_newsletters_issue_1135007748015.html
[10] http://www.nsba.org/site/doc.asp?TRACKID=&VID=2&CID=90&DID=37523
[11] http://www.cbpp.org/12-8-05bud2.htm
[12] http://www.cbpp.org/12-22-05bud.htm