The Coming Budget Battles

The President released his budget yesterday.  It is a tough budget and has made no one happy.  In addition to the cuts previously reported cuts to programs like CDBG and LIHEAP the proposal also zeroes out funding for summer school from the Pell Grant Program and freezes domestic discretionary spending for the next five years.  President Obama did include revenue in his proposal as well.  His budget ends subsidies to oil and gas companies, which will save $46 billion over the next ten years.  High income earners will see reductions in the rate that home mortgage interest and donations can be itemized.  At the very least the President is acknowledging a need for revenue and some sort of shared sacrifice – though most of the sacrificing is being done by low-income families and communities.

Many of the proposals will have a superficial effect on the budget, but a major effect on the most vulnerable Americans.  In his press conference today the President spoke about the proposed cuts to LIHEAP.  Funding for LIHEAP was increased due to a rise in fuel prices.   President Obama argued that since fuels costs have now dropped, the program can be reduced.  What he neglects to mention is that while fuel prices may have dropped, low-income Americans are still reeling from the recession.  Fuel may be cheaper, but real unemployment is still in the mid teens.  High fuel prices are not the only factor when it comes to the ability to pay heating costs.  The explanations ring hollow.

The same is true of freezing federal salaries.  It’s easy to think that freezing federal salaries is only going to have an impact on the bogeyman bureaucrat wasting our tax dollars making $150,000 per year.  Those salaries will be frozen, but so will the pay of postal workers, janitorial staffs, park rangers, TSA employees.  Many of these people make just above minimum wage.  Now they face two years of their salaries not keeping up with inflation.

The President keeps using a variation of this explanation – “Our families have tightened their belts and made cuts and the Federal government can too”.  This is a phrase that is supposed to easily explain why these cuts are necessary, to bring understanding of the budget home.  It’s a phrase that you typically hear from budget hawks when popular and important programs are being reduced.  Unfortunately, it doesn’t increase any understanding of the budget – because family budgets and governmental budgets couldn’t be any more different.  Family costs will stay relatively fixed.  There may be some fluctuation in food and other commodity prices.  Gas may go up (or down).  Generally families will know what they are laying out every month and be able to adjust for loss of income, etc.

The Federal government doesn’t have that luxury.  Costs to the Federal government will grow, regardless of the discretionary spending freezes.  Medicare and social security costs will rise.  As the population grows, the need for services grows.  Governments don’t act like families and can’t cut their budgets accordingly.  And they don’t.  That’s the dirty little secret.  What family do you know that can run a deficit all the time?  What family do you know that can print its own money?  It’s trite to compare the Government’s budget to a family budget.  It does nothing to increase the understanding of how Government works.  It’s a straw-man argument that emboldens Republicans going into negotiations.

The President’s proposal is a reflection of the recession.  The House budget is a reflection of Republican fantasies.  House Republicans have released a plan to cut nearly $65 billion before the end of the fiscal year.  To achieve this, Republicans have cut $1 billion from Head Start, more than 40% of the Public Housing Capital Fund, 66% from LIHEAP, and 46% from the appropriation for Community Health Centers. Reducing funding for Community Health Centers is a clever swipe at the Healthcare bill, because the Centers are going to play an important role in implementing the new provisions.  This is all in addition to terminating, completely, funding for PBS , NPR, and the NEA along with massive reduction to National Service Programs.

There will have to be compromise – but who and how much?  The President appears ready to compromise – he already did, conceding cuts to LIHEAP and CSBG.  Instead of starting negotiations with his numbers closer to zero and coming to a reasonable cut, President Obama has gone two-thirds of the way.  The Republicans haven’t given an inch.  They most likely won’t.  In fact, the original House proposal only cut $35 billion.  Rank and file members through a fit and leadership adjusted – moving even further to the right and proposing deeper reductions.

We have two budget proposals, neither or which makes any change to Medicare, Medicaid, and Social Security.  We can keep making these cosmetic changes to the budget.  We can keep pretending that the Federal government can act like a family who needs to cut back on trips to the mall.  We can keep making reductions to or terminating programs that have a positive and needed impact on our communities and families.  We can keep ignoring the long-term.  Until we can’t anymore.  So, the real questions is – who’s going to blink first?

Pic Via | Photo Credit – AP Photo/Jacquelyn Martin

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  1. […] our communities and our country of a vital resource.  Combine that with the proposed cuts to the CSBG, CDBG, and LIHEAP programs and our safety net disappears.  As our local governments are forced to make ever deeper […]

  2. […] Americans is breathtaking in its audacity.  Already this year the Republicans in the House have reduced, or cut completely, funding for programs that enable low-income Americans to keep the heat on in winter, obtain legal […]



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