Congress Passes Budget Cut Package: Program Cuts for the Poor, Tax Breaks for the Rich

On February 1, the House of Representatives cast the final vote on the budget cut package, which is intended to trim $39 billion from the federal deficit over five years, FY2006-2010. The bulk of the cuts will come from student loan programs and Medicaid. The measure narrowly passed by a vote of 216-214, with thirteen Republicans   breaking with their party to vote against the 774-page bill. The budget cuts have been nearly a year in the making, and advocate groups, including Women Work!, formed coalitions and mobilized citizens to rally against the cuts. This vote was a clear victory for Congressional leaders, and Budget Chairmen Jim Nussle (R-IA) and Judd Gregg (R-NH) have indicated that they would like to initiate a second round of deep cuts this spring.

Key provisions in the budget bill include:

• Medicaid: $16 billion in cuts through increased co-pays and premiums, and benefit reductions
• Child Care: an estimated 255,000 children in low-income working families will lose child care by 2010
• Child Support: $2.9 billion in child support payments will go uncollected over the next five years
• Student Loans: $12.7 billion in cuts through increased student interest rates and reduced lender subsidies

The $39 billion in budget cuts represents about 0.3% of the total $14 trillion federal budget over five years, and overwhelmingly targets domestic social programs serving low income populations. While some assume that the deficit is largely the result of excessive spending in these areas, in fact the opposite is true. Tax breaks and spending on defense, homeland security, and Iraq/Afghanistan operations account for the bulk of the deficit. In 2005, the deficit grew by nearly $540 billion; tax cuts accounted for 48% of this growth, and spending on defense, homeland security, and international affairs for 37%. Domestic programs made up just 15%. Despite this, Congress seems intent on continuing to cut funding for social safety net programs.

Although $39 billion has been shaved from the deficit, Congress is anticipated to enact a $70 billion tax break package that will completely negate the net effect of these savings. In addition, the beneficiaries of these pending tax breaks will overwhelmingly come from families earning over $200,000 annually, who comprise 3.7% of Americans. Fifty-three percent of the tax breaks will benefit households earning $1 million-or 0.2% of Americans.

FY 2006 Congressional Appropriations

On December 30, President Bush signed into law the FY 2006 Labor, Health and Human Services, and Education Appropriations Act. The bill appropriates $142.5 billion in discretionary funding, $1.5 billion less than last year’s version. A one percent across-the-board cut, applied to appropriations bills this year, further reduced the final funding total. The 2006 federal fiscal year began on October 1, 2005, but Congress was unable to pass funding legislation by that deadline. Prior to December 30, the agencies had been operating on funds granted by Congress through a series of continuing resolutions. 

Under the bill, Women's Bureau funding increased by nearly $200,000. And in a clear victory for women's employment, WANTO was re-funded at just under $1 million. This competitive grant program administered provides awards to community-based organizations that train women in pre-apprenticeship programs, and that provide technical assistance to employers and labor unions. Unfortunatley, all WIA funding, including Adult, Dislocated Worker, Employment Service and One-Stops, saw decreases. However, Congress did not block-grant the funding streams as the President had proposed they do in his FY2006 Budget.

Many HHS funded programs recieved level funding or funding cuts. The Social Services Block Grant, which funds the TANF program in the states, was funded at the same level it has been since 1996. Congress would have to increase funding by $363 million, or 21%, simply to restore the value of the block grant.  After the 1% across the board cut, the program's funding was eroded even further. The Child Care and Development Block Grant was also level funded.

The President's FY2006 budget proposal deeply cut and eliminated many vital education programs, including Perkins Vocational Education, literacy, and TRIO programs. Fortunately there is great support for these programs in Congress, and in the end most programs were protected. Notably, while Perkins basic state grants, national programs and tech prep saw modest cuts, Perkins Occupational and Employment Information grants, which fund career guidance and academic counseling programs in vocational settings, were eliminated. More information about the impact of this funding loss can be found through America's Career Resource Network.

2006 State of the Union Address

On January 31, President Bush delivered his 6th State of the Union Address. Over the course of his 52 minute address to the joint session of Congress, the President outlined his policy priories for the coming year. Major themes of interest to women and their families included:

• reducing federal government spending on social programs,
• making the tax breaks permanent,
• social security and healthcare reform, and
• a new initiative to support math and science education.

The President asked Congress to "reduce or eliminate more than 140 government programs that are performing poorly or not fulfilling essential priories" in order to make tax cuts permanent. In the President's budget, released February 6, this proposal translates into $3.8 billion in cuts to labor, health and education programs, or 3% from the previous year's budget. These programs received the biggest share of funding cuts in a budget that is only reduced by 0.5% overall.

The President's health care agenda includes increasing portability of health coverage, expanded health savings accounts and medical liability reform. He asked Congress to work with him to create a commission "to study the full impact of baby boom retirements on Social Security, Medicare and Medicade." The President's budget contains a combined $40.8 billion cut from Medicare and Medicaid over the next five years.

President Bush used his speech to unveil, the American Competitiveness Initiative, which will devote funding to entrepreneurship, research in the physical sciences, and K-12 math and science programs. The initiative includes a commitment to "train 70,000 high school teachers to lead advanced-placement courses in math and science, bring 30,000 math and since professionals to teach in classrooms and give early help to students who struggle with math, so they have a better chance at a good, high-wage job."

Programs which get girls interested in math and science are especially important because they help girls build the skills and interests they need to enter traditionally male dominated technology fields. The President has proposed to commit $5.9 billion in FY07, and more than $136 billion over ten years, to fund the American Competitiveness Initiative, but has not addressed the need for special math and science project aimed at girls.

President Bush spent a significant portion of his speech commenting on his long term commitment to the war on terror. He stated that the decisions to bring troops home from Iraq will be left up to military commanders. President Bush urged Congress to reauthorize the Patriot Act and defended his domestic surveillance program which he said "helps prevent terrorists attacks." Finally the president proposed an Advanced Energy Initiative, which would increase spending on clean-energy research and reduce the nation's dependence on Middle East oil.

President Bush's FY 2007 Budget Proposal Released

On February 6, the President released his FY 2007 budget proposal. In his State of the Union speech given just days earlier, the President pledged to "keep America competitive." Yet, his FY 2007 budget would cut $2.2 billion from critical job training and career education programs, as compared to current levels. The $870 billion allotted to discretionary funding represents a 3% increase over FY 2006 levels; however, the bulk of this increased funding is directed towards homeland security and defense. Domestic discretionary programs outside these two areas see deep cuts. 

Like FY 2005 and 2006, the President proposes to eliminate Perkins vocational education funding, rating the program as "ineffective" through the federal Office of Management and Budget's "Program Assessment Rating Tool." Once again, he funnels Perkins dollars into his $1.5 billion High School Reform initiative, which would extend some provisions under the No Child Left Behind law to secondary schools. While this proposal is deeply disconcerting, Congress has demonstrated strong support for vocational education and continues to work towards completing the reauthorization of the Perkins Act.

A new development in the President's FY 2007 budget is his recommendation to maintain funding for adult basic education and literacy. In his previous budgets, the President has proposed to cut these programs by 63%, claiming they were ineffective. While these programs would be level-funded, the recommendation represents a significant departure in the Administration's approach to adult education and literacy.

The President also proposes sweeping change to the way in which the Workforce Investment Act is administered. The President, and the Department of Labor, have previously advanced proposals to collapse some funding streams under WIA, and give governors broad discretion. However the new proposal would collapse ALL funding streams, and de-fund One-Stops, instead funding a voucher program, dramatically overhauling  the nation's workforce development system.

Under the "CAA" block grant plan, the President would funnel nearly all existing workforce development funding streams into a voucher-style program. Eligible low-income, dislocated and incumbent workers would receive up to $3,000 in cash to purchase training from providers identified by the state. While the Department of Labor claims this system would triple the number of workers trained nationwide, the total amount of resources available to job-seekers is significantly lower than the training funds, supportive and other services that are currently available to WIA participants. In addition, the CAA model would put displaced homemakers, single mothers and other women in transition at a particular disadvantage, as the CAA funds may only be spent on job training, and not on essential services such as child care and transportation. It is unclear how much traction the CAA plan will gain in Congress. Women Work! will closely monitor its progress and continue to advocate for the needs of women within the nation's workforce development system.

Action on the President's budget now moves to Congress, where the House and Senate Budget Committess will use it as a blueprint to develop the Congressional budget resolution. Women Work! advocates for full funding of career education and training programs. Please see the Advocacy Tip of the Month to learn how you can do your part to ensure these important programs are protected in the FY 2007 budget process.

TANF Reauthorized

The budget-cutting bill, now awaiting signature on the President's desk, reauthorized Temporary Assistance to Needy Families (TANF) through the year 2010, but with a number of changes that will effect the lives of women and their families who participate in the welfare-to-work program. The Center for Budget and Policy Priorities finds that the bill makes the largest change in welfare policy since 1996.

The new TANF regulations give more oversight to the U.S. department of Health and Human Services, remove the flexibility states formerly had to operate their programs in a way that best fit state needs. Most notably, states will be required to increase work participation rates of women receiving TANF, but will not be allotted sufficient resources or time to meet new requirements. States that do not comply with new work regulations will face steep penalties.

States will have to increase the number of families participating in work activities by an average of 69 percent; however no real effort to address barriers to work will be made. For example, funding for child care in the bill is so inadequate that nearly a quarter of a million fewer children in working families will receive child care assistance in 2010 than in 2004.

States will also lose discretion over how to spend "maintenance of effort" funds which states must expend as a precondition for receiving federal TANF dollars. In the past states could apply different types of work-related requirements to people receiving these funds; however under the new regulations states will lose this flexibility. The new TANF regulations also included new unfunded paperwork requirements for tracking participations in work activities.

Since a reduction in the number of people receiving welfare payments will help states meet new requirements, it is likely that states will try to eliminate women-in-need from the welfare rolls. According to the Center on Budget and Policy Priories, "The Congressional Budget Office also expects states to try and cope with the federal mandates by increasing the number of families who are sanctioned off the program and by imposing new barriers to poor families seeking assistance. This is likely to lead to more children living in deep poverty."

FMLA Celebrates Success Yet Faces Threats

Thirteen years ago, on February 5th, President Clinton signed the Family and Medical Leave Act (FMLA) into law. On this anniversary it's important to remember the good that has come from this law and why it needs protecting. Since its enactment, 50 million working Americans have used the FMLA to take job-protected leave to care for loved ones. However, as we reported in the June 2005 Insider, the FMLA is under serious attack. Opponents of the law are pressuring the Department of Labor to cut back on FMLA protections. Women Work! will keep you posted as further information is available. To read more about the FMLA visit the National Partnership for Women & Families website.

Violence Against Women Act Reauthorized

Legislation to reauthorize the Violence Against Women Act (VAWA) was passed by Congress in December and signed by the President in early January. There are significant improvements in this reauthorization, including a twenty-one percent increase in funding. In addition, programs that enhance the protection of women were authorized, such as a program that protects domestic violence survivors from losing public housing or subsidies due to criminal acts of their abusers. Another feature of VAWA 2005 is the additional provisions for immigrant women, including reuniting trafficking victims with family members from abroad.

The objectives of the new VAWA law are to stiffen penalties for repeat offenders, provide more funding for vital services and help the survivors of violence get the assistance and support they need and deserve. This act will help to break the cycle of violence through education and law enforcement and decrease the number of women affected by violence.

According to the Department of Justice, more than 2.5 million women are victims of violence each year and nearly one in every three women experiences at least one physical assault by a partner during adulthood. To combat this reality, VAWA was created.

Since VAWA was signed into law in 1994, and reauthorized in 2000, it has provided over $3.8 billion dollars to fight violence against women nationwide. Over the last decade there has been an almost 50% drop in domestic violence due to this legislation. Though the numbers are moving in the right direction, there is still more that can be done.