Federal Budget

On Monday, March 21st, Vote Kids continued our paid media ad campaign opposing the cuts to children’s programs passed by the United  States House of Representatives. Click here to see the details of these extensive cuts.

The US Senate must come to an agreement that removes these cuts and continues funding programs like Head Start, the Maternal and Children Health Program, community hospitals, etc. at the level they are slated to be funded at this year. Click below to listen to the ads. They will air in New Hampshire and Iowa through this week.

New Hampshire

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Click here to read more about what the House budget cuts would mean for New Hampshire.

Iowa

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Click here to read more about what the House budget cuts would mean for Iowa.

Just after a Goldman Sachs report predicted that proposed House Republican budget cuts would hurt economic growth, a new Moody’s report finds the same.

Key finding: “The House Republicans’ proposal would reduce 2011 real GDP growth by 0.5% and 2012 growth by 0.2 percentage points This would mean some 400,000 fewer jobs created by the end of 2011 and 700,000 fewer jobs by the end of 2012.”

Furthermore, the report claims “a government shutdown lasting longer than a couple of weeks would do much more damage to the economy.”

Not only do the cuts harm children, they will threaten the economic recovery and cost jobs. Why are we doing this again?

This has been a major week for the funding of children’s programs in the federal budget. We want to give you a breakdown of what is being debated and what you can do to fight some of the bad decisions many in Congress want to make.

Background

On October 1^st of last year, the fiscal year 2011 began. The Congress did not pass a budget funding government programs. Instead they passed what is known as a “continuing resolution” that funds programs at essentially the same level they were in 2010. This resolution will expire on March 4^th. Congress needs to pass final legislation that will fund the government until September 30^th of this year. The fiscal year for 2012 will begin on October 1^st of this year.

What the Congress is Currently Considering

The House of Representatives recently proposed a series of cuts to the budget for this year. Last week we told you about how they proposed $32 billion in cuts – including to the Maternal and Child Health Block Grant, the Women Infants and Children’s (WIC) program, community health centers, poison control centers, and other children’s programs. This was not enough for some members of the House, particularly those who associate with the conservative “Tea Party” movement. On Friday night, a day and time known by government officials as the best to release information that they know will get the least amount of media coverage, the Appropriations Committee offered an addition $42 billion in cuts. These include:

• Head Start – $1 billion (15%) cut
• Community Health Centers – $1 billion cut
• Community Services Block Grant – $341 million cut
• Low Income Home Energy Assistance contingency fund – $390 million  cut
• Title I (K-12 education for low-income students) – $693.5 million cut
• IDEA (special education) grants to states – $560 million cut
• Special Supplemental Nutrition Program for Women, Infants & Children (WIC) – $747 million cut
• 21^st Century Community Learning Centers (after school programs) – $100 million cut
• Maternal and Child Health Block Grant – $50 million cut
• Child Care Development Block Grant – $39 million cut

Many other children programs will be eliminated entirely. Some examples include:

• Teen Pregnancy Prevention Grants
• Mentoring Children of Prisoners
• Even Start
• Striving Readers
• High School Graduation Initiative
• Student Aid – for higher education
• LEAP program (for low-income college students)

The House could include even more cuts as they debate this resolution.

These cuts are wrong on many levels. They harm children at a vulnerable time in their development. The economy remains in recession and an all-time record number of children (14,567,000) currently live in poverty. Cuts like this would mean that 368,000 low income 3 and 4 year olds would lose the education and nutrition program they receive at their Head Start center. The education cuts, along with others being made in states, would leave thousands of teachers out of jobs this year. Many in Washington say these cuts are needed to reduce the deficit. However, these cuts would take only 2% off this year’s projected deficit. So essentially, these cuts harm children and don’t solve America’s fiscal challenges.

What You Can Do

Contact your member of the House and Senators and tell them you oppose these cuts and why. They will listen to you. The original House proposal included a $210 million cut to the Maternal and Child Block Grant. When they heard from people opposed to this, the Republicans reduced their cut to $50 million. Many are not fully supportive of all these cuts. When they reduce these cuts, they are showing just how much discomfort they have. Click here to contact your representatives. Some suggestions when you get a hold of someone in their office:

• Tell them that Congress needs to start budgeting like real families and put our nation’s kids first! Please stop these harmful proposed cuts to programs that are essential for our nation’s economic future.
• Remind them that scientific research and leading economists have said for years that investing in children is one of the smartest investments we can make. We need more investments in the health, safety, and education of children, not mindless cuts.
• Ask them what they would say to the 4 year old in their district or state who is forced out from their Head Start program.

What Happens Next

Even if the House of Representative passes all of these cuts to the budget for this year, the Senate has their say as well. Senator Daniel Inouye of Hawaii, the chairman of the Senate Appropriations Committee, has slammed these cuts, saying “they would impede the federal government from completing even its most core functions.” President Obama has threatened to veto these cuts. This debate will continue throughout the year.

At some point, Congress will begin debating the budget for next year. This week, President Obama released his budget for 2012. Overall, it contains a small increase to children’s programs. Not all programs receive an increase. The President proposed cuts in juvenile justice, heating assistance for low-income families, and community service programs. He makes up for this with increases in Head Start, afterschool programs, child nutrition, child health, and education programs. We will let you know much more about this proposal for next year, but the main business in Washington is to fight the cuts the House want to make to children’s programs right now.

According to a recent report by our friends at the Center on Budget and Policy Priorities, a number of Republican governors, citing state budget problems, have asked Congress to repeal these “maintenance of effort” provisions so that they can reduce Medicaid and State Child Health Insurance Program (S-CHIP) expenditures by covering fewer people.

The Affordable Care Act requires states to maintain their current Medicaid and Children’s Health Insurance Program eligibility standards until 2014, when new, nationwide Medicaid eligibility standards take effect and state-based health insurance exchanges will begin operating.

Repealing the maintenance-of-effort provision would almost certainly result in a sharp increase in the number of Americans who are uninsured, as states scale back eligibility for low-income children, parents, seniors, and/or people with serious disabilities — the principal groups of people whom Medicaid covers.  During the recession of the early 2000s, some 34 states cut back Medicaid and CHIP eligibility — causing 1.2 million to 1.6 million low-income adults and children to lose coverage — before Congress acted to prevent states from making further eligibility cuts as a condition of receipt of federal fiscal assistance enacted in 2003.

State budget shortfalls are substantially larger today than in those years; states face estimated shortfalls of about $125 billion for state fiscal year 2012, which begins on July 1 in most states.  In addition, many governors have said they oppose any revenue increases to help close these shortfalls, despite the magnitude of the budget gaps.  If the maintenance-of-effort provision is repealed now, the number of low-income Americans cut off Medicaid and cast into the ranks of the uninsured will likely far outstrip the number who lost insurance in the early 2000s.  Arizona alone is seeking to end Medicaid coverage for 280,000 people.

Large numbers of children could lose coverage. Most states do not cover large numbers of parents and childless adults.  Should the maintenance-of-effort provisions be repealed, these states likely would curtail eligibility for children (and seniors and people with disabilities) since that is the only way they could generate substantial savings by curtailing Medicaid eligibility. All states cover children with incomes above Medicaid’s minimum eligibility levels, either through Medicaid or CHIP.  Almost every state covers children with incomes up to 200 percent of the poverty line.  Most cover children with incomes up to at least 250 percent of poverty.

These eligibility standards have produced strong results.  They kept the number and percentage of children who were uninsured from rising in 2009 despite the severe recession.  The proportion of children covered by Medicaid and CHIP increased by 3.5 percentage points in 2009, offsetting a comparable percentage decline in employer coverage for children.

This is going to be a dangerous year for children and families who receive government services. They face attack on many fronts – the budget cuts proposed by House Republicans at the federal level, and budget cuts proposed by Governors to K-12 education, higher education, and other children’s and youth programs.

Democracy Corps, a project of political consultants James Carville and Stan Greenberg, released a poll this week that shows voters strongly opposed to budget cuts being proposed by House Republicans. The chart below shows opposition to these cuts when voters learn about the impact on children, youth, women, and families.

How much more simple can this be? Voters do support the idea of cutting $32 billion from the federal budget in the abstract (50% favor-33% oppose). However, when they learn about specific cuts being proposed, support collapses. 50% are opposed (a gain of 17 points) with only 43% in favor. Voters need to know what the House Republican leadership wants to do. It is the only way to stop these stupid and short-sighted cuts.

A program that helps low-income Americans afford energy, particular during the type of harsh winters many are experiencing in different parts of the country, is poised to be used as a political football. On Wednesday, the National Journal reported that President Obama’s proposed 2012 budget will cut several billion dollars from the Low Income Home Energy Assistance Program. The program would see funding drop by about $2.5 billion from an authorized 2009 total of $5.1 billion.

In 2010, Obama’s omnibus budget resolution assigned roughly $5 billion in LIHEAP grants for 2011. According to the National Journal, the rationale was that at a time of acute economic crisis and rising commodity prices, a little federal assistance to those in need was politically defensible.

On Wednesday, the House Appropriations Committee proposed a $400 million cut to the program. Both sides are playing silly political games with this program. Last year, when President Obama proposed a $1.8 billion cut to the program (from $5.1 billion in 2010 to a proposed $3.3 billion level) before agreeing to $5 billion in the omnibus spending bill that currently funds the government for this year. While the President is presenting this as a “tough cut” needed to show his intent to “control spending”, he is not offering anything different than he offered last year. And the House Republicans are offering $32 billion in budget cuts to “reduce the deficit”, cuts including the LIHEAP program, their plans reduces the deficit by less than 2% this year (a deficit slated to be $1.5 billion).

It is reasonable for America’s children and families to expect an honest debate about their needs and the government’s responsibility to provide services. Instead, they are getting spin and intellectual dishonesty from Washington DC where proposals have nothing to do with what they actually need and should expect to receive from their government. The proposals also do not accomplish what those proposing them say they will do. Expect this to continue throughout the year.

As part of their effort to cut $32 billion dollars from this year’s budget, the House Appropriations Committee previewed a series of cuts they plan to make. Programs for children and pregnant women feature prominently in these cuts along with cuts to local law enforcement, clean water, poison control, and many other programs that protect the safety of American’s food, water, and property. While House GOP’s are stepping up efforts to roll back reproductive rights, one has to assume they really believe that government’s obligation to children ends at conception. Some lowlights:

• $758 million* cut from the Women, Infants, and Children (WIC) program. WIC provides Federal grants to States for supplemental foods, health care referrals, and nutrition education for low-income pregnant, breastfeeding, and non-breastfeeding postpartum women, and to infants and children up to age five who are found to be at nutritional risk.

• $210 million cut to Maternal and Child Health Block Grants. The Maternal and Child Health Block Grant to States is a public health program that reaches across economic lines to improve the health of all mothers and children … train providers and support services for children with special healthcare needs, newborn screening and genetic services, lead poisoning and injury prevention, and health and safety promotion in child care settings.

• $1.3 billion cut to Community Health Centers, $480 million of which is devoted to children. These centers are designed to improve the health of the Nation’s underserved communities and vulnerable populations by assuring access to comprehensive, culturally competent, quality primary health care services.

• $400 million cut from the Low Income Heating Energy Assistance Program Contingency Fund (LIHEAP), $150 million of which is devoted to children. LIHEAP assists low income households, particularly those with the lowest incomes that pay a high proportion of household income for home energy, primarily in meeting their immediate home energy needs. This winter has been particular cold in the northeast and southwest, and families will likely be denied assistance from this program. The federal government will also not be able to respond with assistance in case of future weather crises this winter.

• $27 million cut to poison control centers, $17.5 million of which is devoted to children. There are 57 poison control centers in the United States.  Together they provide free, 24-hour professional assistance to anyone in the 50 states. All calls to a poison center are answered by a medical professional trained to answer questions about poisons. By answering calls to this phone number, poison centers provide immediate poison exposure management instructions.

• $2.3 million cut in juvenile justice programs. The Office of Juvenile Justice and Delinquency Prevention supports efforts to protect public safety, hold offenders accountable, and provide services that address the needs of youth and their families.

These cuts are simply idiotic. They will not make children smarter, healthier, or safer. They represent the failure of adults in Washington to make smart choices about the future. Congress and the Obama Administration reached a deal to add $400+ billion to the deficit by extending the Bush tax cuts. It’s irresponsible to cut these programs to pay for these tax cuts.

* These cuts are measured from President Obama’s 2011 budget proposal. In some cases the amount requested for the program is higher than the funding level for 2010 and what is currently being funded through through the continuing resolution process currently in place. The President’s budget does not represent anything other than the desires of the President since any spending authorization must be introduced in the House. So not only are the Republicans cutting vital programs for children, they are also lying to their supporters by implying the total amount of their cuts represent their campaign promises. They don’t.

After several years of deep budget cutting, Governors have begun to propose even deeper cuts this year. Since much of what the state government spends on includes public education and Medicaid, children will bear the brunt of these cuts. Education cuts being proposed include:

• Colorado – Former Governor Ritter’s budget would underfund by $123 million the state’s K-12 education formula, which is designed to ensure that funding keeps pace with the growth in the number of students and inflation.  This amounts to a $40-per-student reduction.

• Georgia – Governor Deal proposes to cut state and lottery funds for pre-kindergarten by 5.6 percent.  This would require eliminating 4,500 pre-K slots, reducing payments to providers by nearly $230 per child, or a mix of cutting slots and reducing payments.

• Iowa – Governor Branstad proposes to eliminate the state’s voluntary preschool program, replacing it with a means-tested voucher program, and halving other state funds that help children access preschool.  As a result, state support for preschool will decline by 41 percent.

• Kansas – Governor Brownback proposes a $232 per-pupil cut in K-12 base student funding, bringing base funding nearly 6 percent below fiscal year 2011 levels.

• Mississippi - Governor Barbour’s budget would fail — for the fourth year in a row — to meet the state’s statutory obligation to support K-12 schools, underfunding school districts by 11 percent or $231 million.  The statutory school funding formula is designed to ensure adequate funding for lower-income and underperforming schools. According to the Mississippi Department of Education, the state’s failure to meet that requirement over the past three years has resulted in 2,060 school employee layoffs (704 teachers, 792 teacher assistants, 163 administrators, counselors, and librarians, and 401 bus drivers, custodians, and clerical personnel).

• Missouri – Governor Nixon proposes freezing funding for K-12 education at 2011 levels. This would mean that for the second year in a row, the state has failed to meet the statutory funding formula established to ensure equitable distribution of state dollars to school districts.

• Nebraska – Governor Heineman also proposes to freeze K-12 funding.  If it is enacted, funding would fall $200 million short of the state’s statutory funding formula.

• Nevada – Governor Sandoval calls for reducing K-12 funding by $270 per student, cutting teacher pay by 5 percent, and freezing merit and longevity pay for teachers (and other public employees).

• New Mexico – Governor Martinez proposes reducing K-12 funding by $30 million (1.5 percent) and sparing “classroom spending” from cuts, which would mean greater proportional cut to other areas of K-12 education, like school libraries and guidance counseling.  She also proposes a 20 percent cut in the general fund operating budget of the Public Education Department.

• New York – Governor Cuomo proposes a $1.5 billion, or 7.3 percent, cut to state education aid.  This cut would delay, for the third year in a row, implementation of a court order to provide additional education funding to under-resourced school districts. It would also come on top of a substantial education aid reduction in the current fiscal year.

• South Dakota - Governor Daugaard is calling for a 10 percent cut in K-12 funding. The cut is so large that the state’s largest school district says it would be unable to satisfy it even if it were to eliminate all school buses and remove all athletic and fine arts programs.

• Texas – The initial budget, produced by state’s Legislative Budget Board (the Governor is not required to produce an initial budget in Texas), would eliminate funding for pre-K programs that serve almost 100,000 mostly at-risk children — over 40 percent of the state’s pre-kindergarten students.  The budget also would reduce K-12 funding to 23 percent below the minimum amount required by the state’s education finance law. Texas already has below-average K-12 education funding compared to other states, and this cut would depress that low level even further at a time when the state’s school enrollment is growing.  This would likely force school districts to lay off large numbers of teachers, increase class sizes, eliminate sports programs and other extracurricular activities, and take other measures that undermine the quality of education.

• Washington – Governor Gregoire would take nearly $1 billion from education funds designed to reduce class size, extend learning time, and provide professional development for teachers. Gregoire also would eliminate early education for 1,300 three-year-olds.

This will only get worse if the federal government passes deep cuts in education funding. About one-third of the category of the federal budget known as “non-security discretionary” spending flows through state governments in the form of funding for education, health care, human services, law enforcement, infrastructure, and other areas.  House leaders have proposed cutting that spending by more than 20 percent for the current federal fiscal year, which ends in September. This would reduce federal support for services provided through state and local governments by roughly $32 billion, forcing states to make still-deeper cuts in their budgets for next year.

Today, the Republicans in the House of Representatives proposed a $30 billion cut to this year’s budget. This will lower the deficit by less than 2%, far below what it was increased when the tax cuts for the wealthy were extended last December. Most significantly, while some Representatives like Minnesota’s Michele Bachmann have offered cuts or elimination of specific children’s programs, the House leadership offers nothing in the way of specifics:

So far, Republicans have been reluctant to say where they would achieve savings. As budget chairman, Ryan sets spending limits but does not decide where to cut. That task falls to the House Appropriations Committee, which is drafting a specific spending plan.

The Republican plan includes a slight increase in spending at agencies related to national security, including the Pentagon and the departments of Homeland Security and Veterans Affairs. Therefore, $40 billion in cuts would come from education, health care, housing, and other programs designed to benefit children and families. It says something that these so-called leaders still do no have the guts to tell children which programs are going to be cut, which of their teachers will be fired, which medicines they will not longer be able to receive, all so they can cut the deficit by a tiny fraction and allow their campaign contributors to avoid paying their fair share in taxes.

This is all for the budget this year. In two weeks, both President Obama and Representative Ryan will release budget plans for 2012. We know President Obama will provide a specific vision for children. Will Representative Ryan finally offer his?

Yesterday we posted about a new bill sponsored by Missouri Senator Claire McCaskill and Tennessee Senator Bob Corker. The key feature of the bill will be to cap federal spending (including Medicare, Medicaid, Social Security, Defense, Homeland Security, and everything else) at 20.6% of gross domestic product which is the average share of federal spending the previous 40 years. The Center on Budget and Policy Priorities details why this cap is so misguided:

• The aging of the population — the percentage of Americans aged 65 and older will grow by more than half over the next 25 years — and increases in per-person costs throughout the health care system (in both the public and private sectors) will raise the cost of meeting longstanding federal commitments to seniors and people with disabilities.  Together, these factors will drive up spending for the three largest domestic programs — Medicare, Medicaid, and Social Security.  Limiting total federal spending to 20.6 percent of GDP would have enormous implications for those programs as well as the rest of government.

• Federal responsibilities have grown since 2000, with developments at home and abroad pushing spending above the average for earlier decades.  These responsibilities include homeland security in the aftermath of the September 11, 2001 attacks; aid to veterans of the Iraq and Afghanistan wars, many of whom — especially those disabled in the wars — will need health care and income support for decades to come; the Medicare prescription drug benefit, which Congress added in 2003; and health reform, which extends health coverage to tens of millions of Americans who would otherwise be uninsured and will increase federal spending, even though it will reduce the deficit.

• Spending for interest on federal debt also will be substantially higher in coming decades than it was during the past 40 years.  Today — largely due to the wars in Iraq and Afghanistan, the large Bush-era tax cuts, and the severe recession — debt held by the public is almost twice as large (as a percentage of GDP) as in 2001, with a commensurate increase in interest costs once interest rates return to typical levels.

Federal spending under President Reagan averaged 22 percent of GDP. During his term, no baby boomers were retired and health care costs were more than one-third lower as a share of the economy than they are today.  As noted by Washington Post columnist Matt Miller: “As a matter of math, if you run the government at a smaller level than did Ronald Reagan while accommodating this massive increase in the number of seniors on our health and pension programs, you have to decimate the rest of the budget.”

Children make up a significant share of the “rest of the budget”. This include education funding, health care through Medicaid and the State Children’s Health Insurance Program, programs to reduce child abuse and neglect, child care, nutrition, prekindergarten programs, afterschool programs, and many other areas that help families. This will harm children and decimate America’s long-term competitiveness while doing nothing to improve the American economy in the short-term.

Politicians in Washington are contemplating dangerous ideas right now. None is more dangerous than this bill. McCaskill is a Democrat running for re-election in a conservative state next year. Senate rules could allow a vote on this that would require only a simple majority of 50 to pass. Right now, there are more than 50 senators who would likely support this bill.