The Buzz on the Budget
by: Jan Richter

"Question: should we...

• ... keep repairing our old car, or take out a loan for a new one?
• ... go out to an expensive restaurant for Valentine's Day, or not, given the bills we're expecting in the mail?
• ... restrict our options to a local public college or community college, or go deeper into debt to pay for an out-of-state college?"
  

A family's wish list gets very real very fast, when you talk about money. The situation isn't much different for the federal government. A federal budget proposal turns rhetoric and priorities into reality very quickly.

Every year the minute the President's budget is released in February, the media, advocates, business leaders and lawmakers are primed to analyze the numbers to see who the "winners" and "losers" are, what the balance is between debt and expenditures, what proposals seem like good investments—for a stronger job market, a better educated or more productive workforce, a more prosperous economy—and what looks like wasteful or frivolous spending.

The kitchen-table issues for child advocates at budget time are education, health care, child care assistance and early learning programs, housing assistance, out-of-school and youth development programs, job training, work supports for low-wage families.

And some say those kitchen table issues, especially for middle-class and low-wage families, are in jeopardy with President Bush's FY2008 budget proposal.

If you make more than $400,000 a year, the President’s budget is specifically designed to meet your needs! If you make a million bucks a year, you need take no action today.

But if you think that instead of billions in tax handouts for the very wealthy, we should use the nation’s wealth to make health care more affordable, to improve schools and to help make college more affordable for American families, Congress needs to hear from you.

A chorus of policy experts and advocacy groups took a look at the budget blueprint the White House delivered to Congress this week.

Many found a budget that enriches the rich at the expense of everyone else, a budget that promises cuts in services across the board to pay for exclusive tax breaks for the wealthiest, and a budget that uses rhetoric and gimmicks to hide a growing imbalance in benefits and a growing imbalance between revenues and expenses.

Key to the White House FY2008 budget is the President’s insistence on making the Bush tax cuts permanent.

The President’s budget would permanently protect tax handouts that benefit the wealthy while freezing or cutting funding for government services many families rely on – children’s health care, education, nutrition supports, child care assistance, cancer research, housing, environmental protection, home energy assistance.

For example, the Bush budget proposes nearly $100 billion in cuts to Medicare and Medicaid alone, over the next 5 years.

The Bush budget would eliminate the Office of Juvenile Justice and Delinquency Prevention, eliminate vocational education funds that serve high school students, and eliminate most direct loans for rural housing.

While protecting tax cuts for the wealthiest, the Bush budget would also increase the tax burden on more and more middle-income families because it provides relief for middle-income families from the Alternative Minimum Tax for only one year.

The Bush budget claims fiscal balance by relying on revenues coming from more and more middle-class families who will pay higher taxes under the Alternative Minimum Tax after 2007.

If AMT is fixed to reduce the burden on middle-class families, the costs of the high-end tax cuts will total $3.4 trillion in lost revenue between 2007 and 2017. That means more national debt, higher interest payments charged to the federal budget, and more funding cuts in services for children, families and the elderly.

The good news is that Congress may not be so willing to go along with the President’s priorities this year.

More on the Budget:

• The Coalition on Human Needs has a comprehensive round-up of Reactions and Analyses [1] from lots of organizations concerned about families and communities .
  
• They've also got a great audio training and more materials in the Budget Background [2] section.