Federal tax, funding cuts give NY’s public services close shave
By JOHN MURPHY and SHERRY HALBROOK
Budget wars may just be starting again in Albany, but they are well past their “sell-by” date in Washington where the 2006 federal fiscal year started October 1.
In late fall, the Senate voted 51-50 to make a series of changes to a nearly $40 billion budget-cutting bill and sent it back to the House of Representatives for another look. Vice President Cheney cast the tie-breaking vote.
With the exception of the Samuel Alito confirmation hearings in the Senate, both houses were in recess through most of December and January.
The amended budget bill might affect PEF members and state and local public services in many ways, such as:
• Produce devastating cuts in Medicaid;
• Cause financial hardship for health care institutions, making it more difficult to recruit and retain qualified nurses;
• Impose harsher work requirements to move Temporary Assistance for Needy Families (TANF) recipients into work programs, while underfunding child care;
• Reduce funding in public housing programs;
• Reduce employment services even further than proposed in the FY 2006 Labor, Health and Education Spending Bill; and
• Reduce cuts to higher education and student aid at a time of skyrocketing tuition.
The amended bill has been sent back to the House for approval. If it’s not approved, budget negotiations between the two houses will resume.
PEF President Roger Benson has written letters to New York’s congressional representatives urging them to use this second chance to review this bill and make the appropriate changes to “pass a more prudent and compassionate federal budget.”
You can help protect federal funding for your job and the important public services you provide. Contact your congressional representative and urge him or her to vote to protect public services in New York state. Just go to
www.house.gov and click on write your representative.
Hidden dragon
A favorite Washington tactic is to attach something unpopular to a more popular and/or urgent bill.
Sometimes it works, but not always. Attaching authorization for oil drilling in the Arctic National Wildlife Refuge (ANWR) to the national defense spending bill was just such an attempt that failed.
After a day of tense negotiations, the Senate stripped provisions to allow the drilling from the defense spending bill and sent the bill back to the House for approval.
A number of other important unrelated spending measures also were added to the defense spending bill.
Before recessing for the holidays, the Senate had also passed the Labor, Health and Human Services spending bill and an extension of the Patriot Act.
As part of the GOP’s drive to pay for tax cuts for the wealthy, a 1 percent across-the-board cut in all discretionary spending programs was added to the defense bill.
Combined with cuts already made in the spending bill for the Labor, Health and Human Services and Education Departments, the across-the-board cut may reduce: Community Development Block Grants by $777 million or 15.7 percent; Children and Families Services programs by $350 million or 3.8 percent; and the Environmental Protection Agency’s state revolving funds for clean water and drinking water by $243 million or 12.3 percent.
House cuts taxes
The House passed another large tax cut bill directly on the heels of its November vote to cut $50 billion from social spending programs.
The new tax plan calls for $56 billion in tax cuts over five years. It passed by a vote of 234 to 197. Three Republican members voted against the plan, including Sherwood Boehlert of NY, while nine Democrats (none from NY) crossed party lines and voted for it.
The centerpiece of this GOP tax-reconciliation package (H.R. 4297) is the extension through 2010 of the reduced tax rate investors pay on their capital gains and dividends. Over the next five years, it will save them an estimated $20.55 billion. In the U.S., more than half of this windfall goes to millionaires.
House cuts spending
House Republicans narrowly passed a budget reconciliation bill 217 to 215. All Democrats (Edolphus Towns, D-NY, didn’t vote) and 14 Republicans, including New Yorker John Sweeney, voted against it. Three NY Republicans voted for the spending cuts: Boehlert, Vito Fossella and James Walsh.
The bill cuts federal funding for programs such as Medicaid, food stamps, student-loan subsidies and public housing, with the goal of reducing the federal deficit by nearly $49.5 billion (bargained down from $54 billion) by 2010.
“That $4.5 billion in concessions is the direct result of the letters and lobbying efforts PEF members and other activists made to their representatives,” Benson said.
Labor spending
The Labor, Health and Education spending bill that passed both houses may cut grants to the states for Employment Services (ES) by $57 million. This year marked the first time the Senate joined the House in eliminating the $35 million Re-Employment Services (RES) grants to states.
The federal Unemployment Insurance budget for states will be $99 million less than President Bush requested. According to the U.S. Department of Labor, the system is being altered to more rapidly trigger additional budget appropriations if the level of unemployment claims jumps too high.
The conference bill will reduce the One-Stop/America’s Labor Market Information System (ALMIS) grant to states by $15 million.
The funding for states to administer the Veterans’ Employment and Training Service (VETS) would increase by slightly more than $1 million from the FY 2005 appropriation.
Bush had requested a bigger cut in ES state grants totaling $85 million and a cut of $126 million to the Workforce Investment Act (WIA) Dislocated Worker program, which Congress did not approve. But it did approve cutting the WIA Adult and WIA Youth programs appropriations by a combined $67 million. Congress has not acted on Bush’s WIA-Plus proposal.
WIA is deadlocked mainly because President Bush has threatened to veto the bill unless it includes charitable-choice programs/faith-based initiatives.
PEF is working closely with its international affiliates regarding the WIA and the other federal budget legislation.
The
Communicator February 2006
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