Organic Consumers Association


Previous Page

Click here to print this page

Make a Donation!


A Look at the Budget Bills

LA Times

IN THE QUIXOTIC pursuit of fiscal sanity, the House is desperately trying to cut more than $50 billion in spending over five years. But that's a measly $10 billion a year, at a time when federal deficits are hovering between $300 billion and $400 billion and are projected to double by 2015.

Overall federal spending is a mind-numbing $2.6 trillion a year. At the same time, GOP House leaders plan to extend tax cuts, primarily for the wealthiest Americans, at a cost of $70 billion over the same five years. This is the equivalent of trying to kill a tiger with a flyswatter. Most Americans have tuned out the ever-scintillating details of fiscal policy because the deficit seems so incomprehensible and intractable. But elementary school math shows that the current House approach is symbolic at best:

(1) Cutting $10 billion out of $400 billion slices a mere 2.5% off the deficit.

(2) Shaving $10 billion off $2.6 trillion cuts federal spending by 0.4%.

(3) $70 billion in tax cuts for the wealthy, minus $50 billion in spending cuts, means that the deficit will actually increase by $20 billion.

Deficits are a very real and growing problem, particularly as healthcare costs soar. Baby boomers start retiring in a few years, and the three big entitlement programs (Medicare, Medicaid and Social Security) are on track to gobble up all federal revenues by 2030. In the long run, our options are stark: Either we shut down the rest of government, raise taxes by 50% or put our economic future at great risk.

The House proposal, among other things, would slash Medicaid benefits by $11.9 billion and student loans by $14.3 billion, at a time when the poverty rate has risen four years in a row and the middle class is increasingly being priced out of college. All of this money — and more — will then disappear into the bank accounts of wealthy individuals, assuming the tax portion of the package is also enacted. Real deficit reduction will require curbing the big-ticket spending items. Medicare, Medicaid and Social Security consume more than $1 trillion of public spending each year — a total that makes $11.9 billion look like chump change.

Many experts believe that Social Security can be fixed by a combination of raising the eligibility age, relating benefits more to income and raising the income cap on payroll taxes.

However, the ticking time bomb in our economic future is healthcare costs. They've been rising 2.5 percentage points faster than GDP growth since the 1960s, ballooning the costs of Medicare and Medicaid. If we are not to sink slowly into a sunset of stagnating living standards, public and private healthcare spending needs to be the No. 1 item on our deficit-reduction agenda. Healthcare inflation has been driven by technological advances, an aging population, fears of malpractice suits, unhealthy lifestyles, surprising lack of attention to medical best practices and a failure to make healthcare costs transparent to consumers.

Addressing these problems will be tough but unavoidable. Congress could delay the Medicare prescription drug bill — the biggest entitlement in 40 years — and save at least $40 billion a year. Over five years, we could save $52 billion by reducing federal highway aid to the level set in 1997. And sacrificing bridges to nowhere and other pork could save tens of billions.

Congress is under pressure to "do something," and the Senate last week anted up $35 billion in cuts of its own. But both proposals aren't much more than window dressing. It's time to get serious. The longer we wait, the more calamitous may be the day of reckoning, and the more we saddle our children with the fiscal failures of our inaction.


How House measure would hit programs that help the poor

Senate's bill spares benefits
Posted by the Asbury Park Press on 11/12/05

WASHINGTON — A $51 billion budget-cutting plan under consideration in the House would slash at least $10 billion from programs that help low-income children, child advocates say. A $35 billion savings plan enacted by the Senate largely avoids such cuts.

Here's a look at how the House GOP plan would affect children's programs:

Medicaid: About half of current Medicaid recipients are children. The House plan would allow states to increase copayments for medical services to $5 beginning in 2008 for families below the federal poverty level. States could boost that amount annually, tied to medical inflation.

There would be no limit on copayments for medical services, prescription drugs or premiums for Medicaid recipients above the poverty level as long as the fees don't exceed 5 percent of a family's income.

Child advocates estimate that 6 million poor children would be affected by the fee changes, which would produce over $6 billion in net savings.

Food stamps: An estimated 275,000 people, including children, would lose eligibility for food stamps by 2008, a move aimed at cutting $645 million from the federal budget, according to the nonpartisan Congressional Budget Office. CBO estimates that about 40,000 low-income children would no longer be eligible for free school meals.

Welfare: The minimum work requirement for single parents with children younger than 6 would increase from 20 hours to 40 hours a week. The House bill would provide $500 million in additional child-care funding. But the CBO says that would represent only a fraction of the $4.1 billion that states would have to come up with in additional child-care costs caused by the new rules.

Child-support: Matching grants to states for child-support enforcement would drop by $5 billion over five years. The grants are used by states to locate absent parents, obtain legally enforceable child-support orders and collect the money. The budget office estimates the House bill would reduce child-support payments by $7.9 billion.


Ag Committee votes for $3 billion in cuts to ag spending

Agriculture Online News

10/19/2005, 3:12 PM CDT

CSP cuts dig deep

On Wednesday, the Senate Agriculture Committee approved deep cuts to conservation and commodity programs, including an $821 million cut to the Conservation Security Program (CSP). The CSP accounts for less that 1% of federal agriculture spending, but received 27% of the cuts in the total agriculture budget mark-up.

The budget cut approved today by the Senate Ag Committee is expected to shut down new CSP enrollments after this year, according to a release from the Land Stewardship Project.

"The budget resolution has dealt this Committee a difficult hand," remarked Senator Tom Harkin (D-IA), Ranking Member on the committee. He said it "continues - and in fact worsens - the misplaced priorities and misguided choices that have dominated federal fiscal policy for the past four-and-a-half years." In a scathing statement today, he said the cuts could actually worsen budget deficits.

"Americans are being told these cuts are necessary to bring the deficit down. With annual deficits and the national debt setting new records, fiscal responsibility would make a lot of sense. Yet the irony is that the cuts required of our Committee are contained in a budget resolution that will actually worsen budget deficits. That is because the resolution requires cutting $35 billion from programs that mostly help middle and lower income Americans, while it authorizes additional tax breaks of $70 billion - the lion's share of which will go to the very wealthiest Americans.

Bad timing for farm bill cuts, says Harkin
"It would be hard to find a worse time to break the commitments made in the
(2002) farm bill. Farm income is falling substantially because of higher production costs - including record energy prices - along with lower commodity prices," Harkin said.

"USDA information indicates that agriculture will suffer a nearly $5 billion negative impact this year just from energy-related costs. FAPRI estimated a 20% annual increase in the cost of production for all major crops, again mainly from higher energy-related costs. Cutting farm income protection can only worsen the hardship for farm families and the rural economy. "Nor is there any justification for cutting USDA support for agricultural conservation, yet conservation suffers a disproportionately large share of the cuts in this package," he said.

"Farmers and ranchers need conservation dollars so they can afford practices that improve the environment for all Americans. It is especially unfair that the Conservation Security Program (CSP) absorbs the vast majority of the damage to conservation funding, since CSP has already been cut by well over $3 billion in previous measures."

Earlier this week, many of the countrys hunting, fishing, environmental and conservation organizations urged senators Chambliss and Harkin to only make cuts to conservation programs that are proportional to their current size relative to other 2002 authorized Farm Bill programs.

"Conservations share of total mandatory spending under the jurisdiction of the committee is just 8%, yet the mark targets it for 35% of the total 5-year cut, rising to 41% over 10 years," Ferd Hoefner, Sustainable Agriculture Coalition, pointed out in a statement Tuesday.

A letter Hoefner's group and 22 others sent to Harkin and Chambliss, noted that unlike the commodity and several other titles of the farm bill, the conservation title has already been cut by nearly $4 billion since passage in 2002.

Budget reconciliation is expected to move forward in the Senate. All committees are to report back to the Budget Committee by Oct. 26. The November vote by the full Senate on Grassley's payment limitation plan "will determine whether the broad public interests in protecting natural resources and improving family farm viability and opportunity will take precedence over continuing to provide seven-figure checks from the taxpayers to mega-farms," Hoefner said.

The U.S. House of Representatives is not expected to consider budget reconciliation until later this fall. Once both chambers have finished mark-up, a conference committee will be convened.