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Congress Moving Forward with Austere Budget Cuts As reported in the April Insider, this year's Congressional budget contains a special enforcement mechanism known as "reconciliation instructions," which if enacted will result in deep cuts to entitlement programs such as welfare, food stamps, Medicaid and student financial aid. The original deadline for lawmakers to identify which programs were getting cut was September 16. However, immediately following the Katrina disaster, these deadlines were pushed back to October to allow Congress to enact emergency legislation. Unfortunately, Congress has returned to its original agenda and is continuing to produce legislation that could result in up to a $60 billion reduction in entitlement spending over five years. In addition, fiscal conservatives in the House are requesting a package of cuts to discretionary programs such as WIA, Perkins, higher education programs and adult literacy and a rescission of unspent funds from prior fiscal years. What is in the budget resolution? A final agreement on the Congressional budget resolution for FY 2006 (H.CON.RES.95) was struck on April 28 by a vote of 214-211 in the House and 52-47 in the Senate. The budget resolution contains cuts and spending over a five-year period, 2006-2010, as follows:
The Center on Budget and Policy Priorities (CBPP) estimates that this budget resolution will actually increase the federal deficit by $167 billion over this five year period. Reconciliation - Cuts to Entitlement Programs The budget resolution included reconciliation instructions directing eight House and eight Senate committees to produce legislation accomplishing the entitlement cuts. It is up to these committees to decide which programs to cut. Over three-quarters of the cuts in the House bill would come from programs under the jurisdiction of the Committees on Education and the Workforce and Energy and Commerce. These committees are responsible for student loans, pensions and Medicaid. In the Senate, around two-thirds of the cuts will be from the Committee on Health, Education, Labor and Pensions and the Finance Committee. These committees oversee programs on student loans, pensions, Medicaid and low income programs like welfare and child care.
Although the budget resolution outlines $35 billion in cuts to entitlement programs, this week House leaders announced they would be requesting from House committees an additional $15 billion in mandatory cuts over the $35 billion already outlined in the budget resolution. House committees then set about producing additional legislation to achieve these spending cuts, bringing the total cuts in mandatory spending in the House reconciliation bill to about $50 billion. The committees are responsible for reporting their legislation to the House and Senate Budget committees. The two Budget Committees will then package the various legislation into single bills (one House bill and one Senate bill) for consideration by the full House and full Senate. The Senate approved their reconciliation package on October 26. These bills must be considered under special procedures, which prevent the bills from being significantly amended or filibustered. Essentially, once these reconciliation bills hit the House and Senate floors, it is unlikely they will be defeated. The Senate could consider their reconciliation bill the week of October 31; the House could consider their reconciliation bill as early as the week of November 7. Specific Cuts to Programs
For further information, please consult the following: http://www.cbpp.org/10-25-05wel.htm Tax Breaks for the Wealthy The budget resolution also contains reconciliation instructions relating to the passage of $70 billion of the $106 billion in tax breaks. Ninety-seven percent of these tax breaks will benefit taxpayers earning over $200,000 annually and, if passed, will go into effect on January 1, 2006. According to the CBPP, the $35 billion in cuts to mandatory programs are actually intended to partially pay for this massive tax break package for wealthy Americans. Again, like the reconciliation bills containing cuts to entitlement spending, these tax break bills will be difficult to defeat once they arrive on the floor. Still Time to Stop the Cuts Although the leadership Congress is working to forward their agenda of tax breaks to the wealthy and deep cuts to programs serving low-income women and families, Democrats and moderate Republicans have expressed concerns. Conservatives are using the expenses of Katrina relief to justify the increased cuts, but members who oppose the cuts say it is unjust to cut the very programs that should be serving the low-income victims of the hurricane. Congressional leaders at this point are not sure they have all the votes necessary to pass both reconciliation bills and bring them to a final package for passage. As the budget cuts move forward, it is important to focus on what we as advocates can do. There is no question that the budget reconciliation bills will gain significant progress in both chambers. However, the key members of Congress who must be pressured to act responsibly are the moderate Republicans. They must hear from their constituents that enacting tax breaks for the rich and program cuts for the poor is moving the country in the wrong direction. They are in a position to stop these cuts from happening and preserve services for women in transition. Please see the Advocacy Tip of the Month for more information on actions you can take to make your voice heard. Pathways Advancing Career Training Act Introduced On October 6, the PACT (Pathways Advancing Career Training) Act was introduced in the House of Representatives. The bill, H.R. 3972, would provide federal funding to displaced homemaker, single parent and nontraditional training programs. The PACT Act was introduced by Congresswomen Melissa Hart (R-PA) and Juanita Millender-McDonald (D-CA), who both have extensive experience in championing women's issues at the state and federal levels. The PACT Act represents a fantastic funding opportunity for programs. In addition, it is a great way to connect with your legislators in Washington, D.C. and educate them about the issues most important to you. If passed, the PACT Act would authorize $200 million in grants to states to provide funding for training programs for women in transition. States would allot the funds based on a competitive grant process. Programs housed in community-based organizations, educational entities or other agencies that have proven effectiveness in assisting women in transition would be eligible to receive grants. PACT Act grants could fund a variety of services, including tuition assistance, educational materials, career guidance, support services, and outreach. Program participants would be exposed to nontraditional careers for women, including jobs in the high-wage, high-skill information technology sectors and other growing industries. A portion of funds granted to a state could be used to hire a vocational education expert to administer these programs from the appropriate state government agency. The bill has been referred to the House Committee on Education and the Workforce. While it is unclear when the committee will take up the bill, it is critical that members of Congress sign on, as cosponsors in support of this important bi-partisan legislation. We need to send a clear message to Congress that the PACT Act will provide needed funds to train women in transition for the in-demand jobs of the 21st century. A welfare reauthorization bill was approved by the House Education and the Workforce Committee on October 20. The Personal Responsibility, Work, and Family Promotion Act (H.R. 240) is the House's latest attempt at reauthorizing TANF legislation. This most recent version of the TANF reauthorization bill has many of the shortcomings of previous bills, including an increase in the number of hours welfare recipients are expected to work with few provisions to ensure that recipients are engaged in the types of jobs that will allow them to move out of poverty. H.R. 240 would raise TANF recipients' weekly work hour requirements from 30 to 40, only 16 hours of which could be devoted to job training or education classes. The bill contains only an additional $1 billion in child care money, while the Congressional Budget Office has estimated that $12.5 billion is needed to meet the increasing cost of child care over the next 5 years and the greater work requirements in H.R. 240. Several Democrat-sponsored amendments offered during debate were defeated, including:
Support for H.R. 240 runs along party lines. Republicans believe that the bill has adequate provisions for child care funding and job training, but Democrats disagree, pointing out that TANF has been largely unsuccessful as an anti-poverty measure and the current bill will do little to increase TANF's success. Rep. George Miller (D-CA) explained that the fact that the number of TANF receipts has been cut in half since 1996 does not mean that former recipients have moved up the economic ladder. "Many former welfare recipients remain poor and lack a steady job," according to Miller. "We cannot judge [the performance of] welfare reform by the number of people on or off assistance, but by how many families still live in poverty." The latest Census Bureau reports confirms that the number of Americans living in poverty continued to rise during 2003-2004. There were 37 million poor people in America in 2004, up from about 35.9 million in 2003. The percentage poor rose from 12.5% in 2003 to 12.7% in 2004. Total poverty has been on the rise since 2000, when the national poverty rate was 11.3%. The Senate's TANF reform bill (S. 667) was approved by the Finance Committee in March and is now awaiting a floor vote. The House Bill has been sent simultaneously to the House floor for debate and to the House budget committee for incorporation in the budget reconciliation package. For more information on the budget reconciliation process see the article in this issue of the Insider. On September 28, the House of Representatives voted 415-4 to pass H.R. 3402, a bill which would reauthorize the Violence Against Women Act (VAWA) of 2000. On October 4, the Senate voted unanimously to pass S. 1197, their companion VAWA reauthorization legislation.
VAWA was first passed in 1994 and reauthorized in 2000. The Act authorizes funding for a comprehensive system of criminal justice and community-based responses to domestic, sexual and dating violence. While both proposals maintain existing programs and contain substantial improvements to current law, it is important to note that provisions protecting the economic security of victims have been stripped from both bills. As reported in the June Insider, the original versions of the bills included language that would have:
While the removal of these vital provisions is a setback, there is still an opportunity for advocates to restore economic protections to VAWA. The Security and Financial Empowerment, or SAFE Act (S.1796, H.R.3185), was introduced on September 29 by Senator Patty Murray (D-WA). Companion legislation was introduced in the House by Congresswoman Lucille Roybal-Allard (D-CA). Currently, the bills have a combined total of 56 cosponsors, but more are needed. Women Work! members can do their part by requesting their Senators to co-sponsor the SAFE Act in the Senate. More information can be found on Senator Murray's website. If passed, the SAFE Act would restore economic security provisions to VAWA. The SAFE Act must be included in the final VAWA reauthorization so that employees who are surviving violence can build and maintain their economic self-sufficiency. According to recent research, between 25% and 50% of survivors of domestic violence indicate they had lost their job, at least in part due to the violence. Nearly half of sexual assault survivors end up losing their jobs or are forced to quit. On September 30th, Senators Olympia Snowe (R-ME) and Blanche Lincoln (D-AR) introduced the Working Family Child Care Assistance Act (S.1775). This bill would reduce the income eligibility threshold for the Child Tax Credit (CTC) to $10,000. If passed, the bill would immediately qualify an additional one million lower-income households, including those headed by women in transition, for the CTC. In addition, S. 1775 would permanently repeal indexing of the CTC for inflation, resulting in a fixed income eligibility threshold of $10,000. Under the 2004 CTC eligibility guidelines, families with children who have taxable earned income above $10,750 can qualify for a credit of up to $1,000 per child. The current CTC is based on the amount by which the income of a worker exceeds $10,750. For example, a single mom with one child who earned $15,000 in 2004 owes $165 in taxes. The $1,000 CTC is first used to eliminate her $165 in tax liability, leaving her with $835 left over. Fifteen percent of her earnings over $10,750 equals $638. Since the remaining CTC of $835 is more than $638, she can receive an additional CTC refund for the lower amount - $638. But what about low-income workers who earned less than $10,750? Unfortunately, under current law, very low-income workers are not eligible for the CTC. The Snowe-Lincoln legislation would help to address this by immediately reducing the eligibility threshold to $10,000. S. 1775 would also permanently remove the rules that cause the CTC eligibility threshold to increase every year. In the law that authorizes the CTC, the eligibility threshold was originally set at $10,000 but "indexed with inflation," meaning that like many other federal income tax provisions, the threshold is set to increase along with the rate of inflation. For tax year 2005, the CTC eligibility threshold will increase again to $11,000, but workers wages have not risen as fast as the rate of inflation. So, a single mother working a full-time minimum wage job will earn just over $10,700 in 2005, but fail to qualify for the CTC. A change in the CTC eligibility formula is urgently needed. As currently formulated, the CTC excludes millions of children in low-income working families, most significantly those in female-headed households. Nearly half of Black children's families and 46 percent of Hispanic children's families receive no benefit or reduced benefits from the CTC because their incomes are too low. In fact, most CTC benefits go to families with incomes between $20,000 and $200,000. While S. 1775 goes a long way in financially assisting low-income families, it does not go far enough. Fifty-one percent of displaced homemakers and 40% of single mothers earn less than $10,000 annually, and will remain ineligible for the CTC even if S. 1775 is enacted. More must be done to ensure that these economically vulnerable populations receive the financial support these credits are supposed to provide for all working families with children.
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