Last Budget of President Bush is a National Moral Disgrace
Faithful Progressive took part in a lunch time webinar of more 150 activists dedicated to opposing the morally appalling budget put forward by President Bush last week. Speakers included Martha Coven, Senior Legislative Associate, Center on Budget and Policy Priorities and Deborah Weinstein, Executive Director, Coalition on Human Needs. Ellen Teller, Director of Government Affairs, Food Research and Action Center (FRAC) served as Moderator. We're hoping to stay involved and give you action opportunities over the next months.
Some quick highlights of the truly galling priorities of the President c/o Center on Budget and Policy Priorities:
Budget Lacks Fiscal Discipline Because of Costly Tax Cuts
Despite substantial cuts in areas ranging from health care, disease control, and environmental protection to emergency responders, low-income heating assistance, and other important domestic needs, the budget would enlarge deficits by a total of $547 billion in fiscal years 2008-2013, or $397 billion not counting the economic stimulus package. This is because the budget proposes extending virtually all of the tax cuts enacted in 2001 and 2003 and adding other tax cuts on top.
*The cuts in domestic programs would reduce expenditures for domestic appropriations and entitlements by $23 billion in 2009 and $474 billion over five years.
*The tax cuts, however, would cost more than $900 billion over five years — and an additional $1.5 trillion in the five years after that, for a total cost of $2.4 trillion over the next decade.
* The Administration claims its plan would balance the budget in 2012 and 2013, but no sensible analyst takes that claim seriously, as it relies on the omission of large costs. For example, the budget numbers for 2012 assume that relief from the Alternative Minimum Tax will be allowed to expire. If that were to happen, the AMT would explode in size, hitting 38 million households that year (compared to about 4 million households today). Similarly, the budget numbers for 2012 and 2013 assume no cost whatsoever for operations in Iraq and Afghanistan and other overseas activities related to the global war on terror.
* Moreover, the Administration’s own budget numbers show that its proposals (other than the economic stimulus package) would enlarge budget deficits by $397 billion over 2008 and the ensuing five years — even without counting the costs of continued operations in Iraq or continuation of AMT relief.
* If AMT relief is continued and costs for operations in Iraq and Afghanistan in coming years follow CBO’s most optimistic (and least costly) scenario for a phase-down of those costs, deficits under the Administration’s budget plan would equal $118 billion in 2012 and $153 billion in 2013. For the 2008-2013 period, deficits would total $1.5 trillion under this more realistic set of assumptions. (These figures exclude the cost of the stimulus package.)
Program Cuts Would Affect Millions of Ordinary Families
For 2009, the Administration’s budget would cut funding for domestic discretionary programs outside of homeland security — the part of the budget that funds everything from education to environmental protection to veterans’ health care and Head Start — by $2.4 billion in nominal terms (i.e., before adjusting for inflation) — and by about $15 billion or 4 percent after adjusting for inflation. These cuts would hit nearly every area of the domestic budget.
The Administration claims that its funding for these programs is up by 0.3 percent for 2009 in nominal terms. But this claim is misleading, as it is based on a 2008 funding level that omits $3.7 billion provided for veterans’ medical care this year. (The $3.7 billion was designated as emergency funding but was provided to meet ongoing needs in veterans’ health care; these needs will not somehow vanish in 2009 and succeeding years.) When that $3.7 billion is included in the 2008 base, the amount proposed by the President for domestic discretionary programs for 2009 is $2.4 below the amount enacted in 2008, in nominal terms, and even further below when inflation is accounted for.
* In the poverty area, funding for the Low Income Home Energy Assistance Program (LIHEAP) would be cut $570 million or 22 percent, even before adjusting for changes in energy prices. This would require cutting more than 1 million low-income families and elderly people off the program entirely, shrinking the average amount of assistance provided to poor families by 22 percent, or some combination of the two. The funding level the President proposes for LIHEAP in 2009 — $2.0 billion — is identical to the program’s funding level in 2001, even though home energy prices are now 65 percent higher than in 2001.
* The budget would freeze funding for child care assistance for low-income families for the seventh consecutive year. After adjusting for inflation, child care funding has already fallen by almost 17 percent since 2002. (Between 2002 and 2006, the last year for which data are available, the number of low-income children grew by more than 8 percent.) According to the Administration’s own data, 200,000 fewer children in low-income families would receive federal child care assistance in 2009 than in 2007, under the President’s budget.
* The budget reduces or freezes funding for a number of other low-income assistance programs, as well. For example, because of cuts in the Section 8 housing voucher program, the nation’s largest low-income rental assistance program, at least 100,000 fewer low-income households would receive voucher assistance.
*
The budget would cut funding for the Centers for Disease Control and Prevention by $433 million, even before adjusting for inflation. These reductions include sharp cuts in funding for detection and control of infectious diseases and preventive health services.
* The budget would reduce funding for the Environmental Protection Agency by $330 million, before adjusting for inflation. EPA funding in 2009 would fall more than $1 billion below the 2004 level (and $700 million below the 2001 level) before any adjustment for inflation.
*
While the budget would expand some education programs, it would cut others, and its total funding for K-12 education is less than is needed simply to keep pace with inflation.
Pushing States Deeper Into Fiscal Crisis
The budget is replete with cuts aimed at state and local governments.
* It would cut discretionary grants to states and local governments in 2009 by $15.1 billion, or 9 percent, even before adjusting for inflation. These cuts total $19.1 billion, or 11 percent, once inflation is taken into account. For example, grants to states and cities for homeland security, law enforcement, and firefighters and other first responders would be cut by $1.5 billion, or 45 percent, even before adjusting for inflation.
* In addition, the budget would cut federal Medicaid expenditures by $18.2 billion over five years (with $17.4 billion in reductions from legislative changes and another $800 million from regulatory changes). These “savings” would primarily be achieved not by lowering health care costs, but rather by shifting costs to the states.
Cuts such as these would force states to institute even bigger program cuts or tax increases than will otherwise be needed to close the budget gaps now emerging across the country as a result of weakening revenues. Unlike the federal government, states must balance their budgets, even during economic downturns.
Large Medicare Reductions
In addition to the Medicaid cuts, the budget includes $556 billion in Medicare reductions over ten years. Many of the proposed cuts go well beyond the reductions that MedPAC, Congress’ expert advisory commission on Medicare payments, recommended and considers safe. These reductions could drive some health care providers to limit the number of Medicare patients they see or drop out of the program entirely. That, in turn, would jeopardize health care for significant numbers of people who are elderly or have serious disabilities.
At the same time, the Administration rejected MedPAC’s call to curb the tens of billions of dollars of overpayments being made to private insurance companies that serve some Medicare beneficiaries through the Medicare Advantage program. MedPAC has recently reported that the private insurers are being paid 13 percent more, on average, than it would cost to treat the same beneficiaries under traditional Medicare, and has called for the elimination of these overpayments in order to “level the playing field.” The overpayments will cost taxpayers about $150 billion over ten years, according to the Congressional Budget Office.
The President’s budget, however, leaves these overpayments untouched. The Administration’s refusal even to modestly scale back the overpayments led it to propose deeper cuts in other parts of Medicare in order to secure the overall level of Medicare savings that its budget contains. (See the appendix for further discussion of the Medicare proposals.)
Children’s Health Funding May Not be Adequate to Maintain Current SCHIP Programs
The budget includes what it describes as a $19.7 billion increase in funding for the State Children’s Health Insurance Program (SCHIP). This would not, however, allow states to cover many more uninsured children, millions of whom are eligible for SCHIP and Medicaid but unenrolled.
The $19.7 billion increase is an increase not over current SCHIP funding levels, but over the budget baseline. And the budget “baseline” for SCHIP assumes a reduction in annual SCHIP funding for 2009 and succeeding years, and no adjustment for health care inflation or other factors (such as child population growth or increases in the number of uninsured children as employer-based coverage continues to erode). We estimate that states will need an SCHIP funding increase of approximately $21.5 billion over the budget baseline for the next five years simply to sustain their current SCHIP programs.
Under the Administration’s funding level, states thus would tread water at best and, more likely, be required to scale back their SCHIP programs, unless they were able to increase their own SCHIP funding.[1]
Most Well-Off Americans Would Receive Large Tax Windfalls
Alongside its sizeable, widespread reductions in most parts of the domestic budget, the Administration proposes $2.4 trillion in tax cuts over the next ten years, including the extension of the 2001 and 2003 tax cuts. This figure, moreover, excludes the cost of AMT relief. Continuing AMT relief would reduce revenues by an additional $1.3 trillion over the next decade, according to Congressional Budget Office estimates.
The tax cuts would provide windfalls for the most affluent Americans, even as many vulnerable Americans living on modest budgets would face the loss of needed benefits and services.
* The top 1 percent of households — those with incomes exceeding $450,000 a year — would receive more than $1 trillion in tax cuts over the next ten years. (This figure assumes the extension of AMT relief.) Each year these households would receive more than $60,000 apiece in tax cuts, on average.
* Households with annual incomes over $1 million would get an even larger tax cut: more than $150,000 a year, on average. This group makes up just 0.3 percent (three one-thousandths) of the nation’s households, yet its combined tax cuts would exceed the entire amount that the federal government spends on elementary and secondary education, as well as the entire amount that it devotes to medical care for the nation’s veterans.
Repealing Estate Tax Would Use Up Budget Savings From Medicare Cuts
As noted, the budget’s Medicare proposals would cut projected Medicare expenditures by $556 billion over ten years. Its proposal to make estate-tax repeal permanent would cost $522 billion, or almost as much.
The Medicare cuts would adversely affect tens of millions of Americans who are elderly or have serious disabilities. Repealing the estate tax, in contrast, would benefit only the wealthiest 1 to 2 percent of Americans — and would be worth the most by far to fabulously wealthy individuals, whose estates would receive up to tens or even hundreds of millions of dollars apiece in tax cuts.
Some quick highlights of the truly galling priorities of the President c/o Center on Budget and Policy Priorities:
Budget Lacks Fiscal Discipline Because of Costly Tax Cuts
Despite substantial cuts in areas ranging from health care, disease control, and environmental protection to emergency responders, low-income heating assistance, and other important domestic needs, the budget would enlarge deficits by a total of $547 billion in fiscal years 2008-2013, or $397 billion not counting the economic stimulus package. This is because the budget proposes extending virtually all of the tax cuts enacted in 2001 and 2003 and adding other tax cuts on top.
*The cuts in domestic programs would reduce expenditures for domestic appropriations and entitlements by $23 billion in 2009 and $474 billion over five years.
*The tax cuts, however, would cost more than $900 billion over five years — and an additional $1.5 trillion in the five years after that, for a total cost of $2.4 trillion over the next decade.
* The Administration claims its plan would balance the budget in 2012 and 2013, but no sensible analyst takes that claim seriously, as it relies on the omission of large costs. For example, the budget numbers for 2012 assume that relief from the Alternative Minimum Tax will be allowed to expire. If that were to happen, the AMT would explode in size, hitting 38 million households that year (compared to about 4 million households today). Similarly, the budget numbers for 2012 and 2013 assume no cost whatsoever for operations in Iraq and Afghanistan and other overseas activities related to the global war on terror.
* Moreover, the Administration’s own budget numbers show that its proposals (other than the economic stimulus package) would enlarge budget deficits by $397 billion over 2008 and the ensuing five years — even without counting the costs of continued operations in Iraq or continuation of AMT relief.
* If AMT relief is continued and costs for operations in Iraq and Afghanistan in coming years follow CBO’s most optimistic (and least costly) scenario for a phase-down of those costs, deficits under the Administration’s budget plan would equal $118 billion in 2012 and $153 billion in 2013. For the 2008-2013 period, deficits would total $1.5 trillion under this more realistic set of assumptions. (These figures exclude the cost of the stimulus package.)
Program Cuts Would Affect Millions of Ordinary Families
For 2009, the Administration’s budget would cut funding for domestic discretionary programs outside of homeland security — the part of the budget that funds everything from education to environmental protection to veterans’ health care and Head Start — by $2.4 billion in nominal terms (i.e., before adjusting for inflation) — and by about $15 billion or 4 percent after adjusting for inflation. These cuts would hit nearly every area of the domestic budget.
The Administration claims that its funding for these programs is up by 0.3 percent for 2009 in nominal terms. But this claim is misleading, as it is based on a 2008 funding level that omits $3.7 billion provided for veterans’ medical care this year. (The $3.7 billion was designated as emergency funding but was provided to meet ongoing needs in veterans’ health care; these needs will not somehow vanish in 2009 and succeeding years.) When that $3.7 billion is included in the 2008 base, the amount proposed by the President for domestic discretionary programs for 2009 is $2.4 below the amount enacted in 2008, in nominal terms, and even further below when inflation is accounted for.
* In the poverty area, funding for the Low Income Home Energy Assistance Program (LIHEAP) would be cut $570 million or 22 percent, even before adjusting for changes in energy prices. This would require cutting more than 1 million low-income families and elderly people off the program entirely, shrinking the average amount of assistance provided to poor families by 22 percent, or some combination of the two. The funding level the President proposes for LIHEAP in 2009 — $2.0 billion — is identical to the program’s funding level in 2001, even though home energy prices are now 65 percent higher than in 2001.
* The budget would freeze funding for child care assistance for low-income families for the seventh consecutive year. After adjusting for inflation, child care funding has already fallen by almost 17 percent since 2002. (Between 2002 and 2006, the last year for which data are available, the number of low-income children grew by more than 8 percent.) According to the Administration’s own data, 200,000 fewer children in low-income families would receive federal child care assistance in 2009 than in 2007, under the President’s budget.
* The budget reduces or freezes funding for a number of other low-income assistance programs, as well. For example, because of cuts in the Section 8 housing voucher program, the nation’s largest low-income rental assistance program, at least 100,000 fewer low-income households would receive voucher assistance.
*
The budget would cut funding for the Centers for Disease Control and Prevention by $433 million, even before adjusting for inflation. These reductions include sharp cuts in funding for detection and control of infectious diseases and preventive health services.
* The budget would reduce funding for the Environmental Protection Agency by $330 million, before adjusting for inflation. EPA funding in 2009 would fall more than $1 billion below the 2004 level (and $700 million below the 2001 level) before any adjustment for inflation.
*
While the budget would expand some education programs, it would cut others, and its total funding for K-12 education is less than is needed simply to keep pace with inflation.
Pushing States Deeper Into Fiscal Crisis
The budget is replete with cuts aimed at state and local governments.
* It would cut discretionary grants to states and local governments in 2009 by $15.1 billion, or 9 percent, even before adjusting for inflation. These cuts total $19.1 billion, or 11 percent, once inflation is taken into account. For example, grants to states and cities for homeland security, law enforcement, and firefighters and other first responders would be cut by $1.5 billion, or 45 percent, even before adjusting for inflation.
* In addition, the budget would cut federal Medicaid expenditures by $18.2 billion over five years (with $17.4 billion in reductions from legislative changes and another $800 million from regulatory changes). These “savings” would primarily be achieved not by lowering health care costs, but rather by shifting costs to the states.
Cuts such as these would force states to institute even bigger program cuts or tax increases than will otherwise be needed to close the budget gaps now emerging across the country as a result of weakening revenues. Unlike the federal government, states must balance their budgets, even during economic downturns.
Large Medicare Reductions
In addition to the Medicaid cuts, the budget includes $556 billion in Medicare reductions over ten years. Many of the proposed cuts go well beyond the reductions that MedPAC, Congress’ expert advisory commission on Medicare payments, recommended and considers safe. These reductions could drive some health care providers to limit the number of Medicare patients they see or drop out of the program entirely. That, in turn, would jeopardize health care for significant numbers of people who are elderly or have serious disabilities.
At the same time, the Administration rejected MedPAC’s call to curb the tens of billions of dollars of overpayments being made to private insurance companies that serve some Medicare beneficiaries through the Medicare Advantage program. MedPAC has recently reported that the private insurers are being paid 13 percent more, on average, than it would cost to treat the same beneficiaries under traditional Medicare, and has called for the elimination of these overpayments in order to “level the playing field.” The overpayments will cost taxpayers about $150 billion over ten years, according to the Congressional Budget Office.
The President’s budget, however, leaves these overpayments untouched. The Administration’s refusal even to modestly scale back the overpayments led it to propose deeper cuts in other parts of Medicare in order to secure the overall level of Medicare savings that its budget contains. (See the appendix for further discussion of the Medicare proposals.)
Children’s Health Funding May Not be Adequate to Maintain Current SCHIP Programs
The budget includes what it describes as a $19.7 billion increase in funding for the State Children’s Health Insurance Program (SCHIP). This would not, however, allow states to cover many more uninsured children, millions of whom are eligible for SCHIP and Medicaid but unenrolled.
The $19.7 billion increase is an increase not over current SCHIP funding levels, but over the budget baseline. And the budget “baseline” for SCHIP assumes a reduction in annual SCHIP funding for 2009 and succeeding years, and no adjustment for health care inflation or other factors (such as child population growth or increases in the number of uninsured children as employer-based coverage continues to erode). We estimate that states will need an SCHIP funding increase of approximately $21.5 billion over the budget baseline for the next five years simply to sustain their current SCHIP programs.
Under the Administration’s funding level, states thus would tread water at best and, more likely, be required to scale back their SCHIP programs, unless they were able to increase their own SCHIP funding.[1]
Most Well-Off Americans Would Receive Large Tax Windfalls
Alongside its sizeable, widespread reductions in most parts of the domestic budget, the Administration proposes $2.4 trillion in tax cuts over the next ten years, including the extension of the 2001 and 2003 tax cuts. This figure, moreover, excludes the cost of AMT relief. Continuing AMT relief would reduce revenues by an additional $1.3 trillion over the next decade, according to Congressional Budget Office estimates.
The tax cuts would provide windfalls for the most affluent Americans, even as many vulnerable Americans living on modest budgets would face the loss of needed benefits and services.
* The top 1 percent of households — those with incomes exceeding $450,000 a year — would receive more than $1 trillion in tax cuts over the next ten years. (This figure assumes the extension of AMT relief.) Each year these households would receive more than $60,000 apiece in tax cuts, on average.
* Households with annual incomes over $1 million would get an even larger tax cut: more than $150,000 a year, on average. This group makes up just 0.3 percent (three one-thousandths) of the nation’s households, yet its combined tax cuts would exceed the entire amount that the federal government spends on elementary and secondary education, as well as the entire amount that it devotes to medical care for the nation’s veterans.
Repealing Estate Tax Would Use Up Budget Savings From Medicare Cuts
As noted, the budget’s Medicare proposals would cut projected Medicare expenditures by $556 billion over ten years. Its proposal to make estate-tax repeal permanent would cost $522 billion, or almost as much.
The Medicare cuts would adversely affect tens of millions of Americans who are elderly or have serious disabilities. Repealing the estate tax, in contrast, would benefit only the wealthiest 1 to 2 percent of Americans — and would be worth the most by far to fabulously wealthy individuals, whose estates would receive up to tens or even hundreds of millions of dollars apiece in tax cuts.
posted by Faithful Progressive at 1:30 PM
8 Comments:
Any surprises? Anyone? Anyone? Bueller?
What a poverty.
Dan
Dubya is a moral outrage....so why not his final budget also? At least this "Il bastardo" is consistent, & we know who this enemy is: sad times for this once-good country, however.
This must have been some lunchtime presentation, with no 'lunch' and just perusing all this bad news, but how did you, FP, get so much of it as to post this? Wow!
Yes, to strangle CDC/NIH is shortsighted, since preventive care is so much cheaper than trying to resurrect corpses [real people, however]. Every western nation puts more into research and analysis than we. And to STARVE Medicare into beggar status with reductions will only increase the numbers of uninsured if this is not checked now. A reduction for reimbursement is in the offing already, when hospitals & providers are not making it on what is tendered. PA may be atypical in losing 1500 doctors by the year, but two of my providers have fallen into that capacity and left for other states [CA & OR]. Bushie is trying to destroy any movement for what he calls "socialization," a notion which came up several months ago with the SCHIP financing that evoked a national call then. Somewhere the Psalmist is crying, "How long, O Lord? How long?' Reductions in benefits/reimbursements just when the first 'Baby Boomers' become eligible in 3 years? No accident here, folks: this is a crisis which Bushie WANTS, in his demented mind. The old & the young(est): how dare he! Is there a Republican in the house? Olympia Snow & a half dozen more?
Education? Dubya wants no role formatively for feds, and this is a way to get just that, if not challenged & sent to the sidelines. Does anybody out there care?
And Homeland Security? What a farce already, and not just the akwardness of beginning something anew. Never funded adequately but miracles called for: how to shift burden to the states without matching fed funds? And that tactic for every other matter too?
Bush was never cold [by weather] so LiHeap is a reward for laziness. Thank Chavez for stepping in & Joe Kennedy for helping him. I buy CITGO whenever I can just as a boot up Dubya's arse, but before the conservatives cry 'communist,' do they know, or care, that silently CITGO has also given MDA $90 million as their charity when such goes unfunded from Washington? Now, who's to blame?
It's Bush that's the Disgrace, for which the Budget is just documentation, sadly. We MUST unite eleven months from now just to try to salvage what was once this country.
Arden
One very interesting factoid from the latest budget: the TAX CUTS for MILLIONAIRES proposed in the next budget cycle totaled roughly the same as the FEDERAL BUDGET for K-12 public education.
If you go down the list of national priorities--
we have housing and real estate crisis, so Bush cuts 1.3 billion from housing and community development;
we have rising unemployment-Bush cuts both job training and employment by 1 billion bucks;
we have increasing energy costs--Bush slashes home heating assistance by 1/4;
we have a health care crisis-Bush cuts Medicaid and CHIP...
I could go on and on.
FP
So rich old people are more important than our kid's future?
Joyce K
PS
Glad you're off bashing Clinton and back on Bush--our common foe.
Hey Dan, Arden & Joyce:
Yes, any Dem should pin down Mac to see if he Backs this outrageously skewed set of priorities.
Joyce--you better get busy, we're working on O this weekend.
Thanks to Faithful Democrats for linking this up.
Regards to all,
Thanks to The Crone Speaks http://cronespeaks.wordpress.com/
as well for linking.
But hey, those 'values voters' can't be wrong. Bush is a true 'man of god'.
Yeah and people still think that the War on Iraq (and terra) are about oil. It's about fleecing the American treasury and stealing the future.
The only thing that the New Republican (Libertarian Party) has compassion over (aside from physical money and power) is those that have lots of money.
RW:
Yes, tax cuts fer the rich and defense contracts for the well connected mercenaries are pretty much the GOP "values" platform. They value money and worship wealth and power.
Thanks to Mike and Crooks and Liars for linking.
FP
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