Congress Proposes Cutting Low-Income Programs to Fund Tax Cuts

Note: Each year, Congress develops a budget resolution, which setsoverarching limits on spending and on tax cuts. These limits apply to legislation developed by individual congressional committees as well as to any amendments offered to such legislation on the House or Senate floor. In some years, a special procedure known as a budget “reconciliation” facilitates the passage of spending and tax legislation.

November 18, 205: This morning, in a 217 to 215 vote, the U.S. House of Representatives’ budget reconciliation bill proposed cutting nearly $50 billion dollars over the next five years from programs that affect low-income families.

Supporters of the measure state that the cuts were necessary to pay for hurricane relief efforts. However, tax reconciliation legislation in both the House and Senate proposes cutting taxes that primarily benefit wealthy Americans by at least $60 million.

The Center for Budget Policies and Priorities reports that the following cuts were included in the House measure:

• The House budget bill would still deny food stamps to more than 220,000 low-income people each month by 2008, and would cut basic food aid by nearly $700 million over five years.
• The changes made to the Medicaid provisions are very minor — the House bill still would allow states to impose substantial new co-payment and premium fees on millions of low-income Medicaid beneficiaries, and scale back substantially the health care services that the Medicaid program provides.
• The House bill still would slash funding deeply for child support enforcement efforts. According to CBO, the cuts in federal funding for child support efforts would result in $24 billion in child support payments that would be collected under current law going uncollected over the next ten years.
• The House bill still would result in an estimated 330,000 children in low-income working families losing child care assistance in 2010 as a result of the low child care funding levels and unfunded new work requirements in the bill.
• The House bill still cuts foster care benefits for many children living with grandparents and other relatives.
• The House bill still requires many SSI recipients owed back benefits to wait up to an additional year before they receive the benefits they are owed.

The proposed cuts are not final. Negotiations with the Senate must still happen. It is still possible that negotiations between the two bodies will result in the passage of a continuing resolution. Such a measure would continue funding for a program if the fiscal year ends without a new appropriation in place.