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UPDATE: The Nation’s Budget: A Reflection of What We Value

2011 Budget Clears Congress, Budget and Deficit Challenges Loom

Next month the U.S. Congress votes on whether to raise the debt ceiling. Let your representative know that you want the debt ceiling raised to protect important programs.

Budget Update

Is this the kind of America we want? How selfish are we, really? To what extent does this church-going nation take the biblical instruction to “love thy neighbor” seriously? —Eugene Robinson

Congress passed a budget (HR 1473) for 2011 on April 14th, but the federal deficit is once again reaching the debt ceiling, and the president’s proposed budget for 2012 has not received a welcome reception by the House of Representatives. Congress was simultaneously facing three aspects of the budget process:

  • funding the government for the rest of 2011
  • funding the government for 2012 and
  • keeping the government operating until the decisions on a and b are made.

The government is now funded through September 30, 2011. 

The last-minute resolution that averted a government shutdown cut $38.5 billion for the remainder of fiscal year 2011. According to the Coalition on Human Needs, the House Republicans were forced to drop most of the 60 policy changes while receiving two-thirds of the amount in total cuts they sought. The programs that received the biggest cuts were the U.S. Department of Housing and Urban Development (HUD) programs, which had funding reduced for public housing, tenant-based rental assistance, housing for low-income seniors and persons with disabilities, the Community Development Block Grants, and housing counseling assistance. The Workforce Investment Act, which provides job training for adults and youth, was cut by 6 percent, while the Low Income Energy Assistance Program saw half of its emergency funds cut.

A Washington Post–ABC News poll found that 59 percent of Americans supported the $38 billion in cuts, while 78 percent oppose cutting Medicare as a way to reduce the debt.

The 2012 budget discussions are taking place at the same time Congress must make a decision on the debt limit. This limit has been raised nearly 100 times since the 1980s. The debate on debt limit has become inseparable from the debate on the budget deficit. The debt limit and the budget are critical to the future of government, to funded programs that reflect our values as a society. The president has proposed a budget for 2012. While this budget is nonbinding, it serves as a recommendation to both branches of Congress, who under the Constitution have the “power of the purse.”

The president has asked congressional leaders to start negotiations in May on the 2012 budget. Some programs in the president’s budget such as the vouchers for greenhouse gas emission and the Community Development Block Grants were cut in order to meet his deficit reduction goal. However, the president remained committed to education, with $40 million set aside for math and science teachers. He’s also set aside $35 million for sexual assault services in the Victims of Crime Act fund and has kept funding for international women’s programs. The president proposed a $3 billion increase in international affairs spending which would improve the quality of life to women worldwide.

According to the U.S. Department of the Treasury, May 16 is the date the debt ceiling will be reached, and by July 8 the United States will be in default. President Obama has asked both branches of the legislature to appoint members to a working group headed by Vice President Biden to negotiate a plan to reduce the national debt. The debt ceiling (also referred to as “debt limit”) is a limit set by Congress that the government should not exceed when covering expenses. It monitors the federal government’s spending and alerts the public when the government has more debt than anticipated. When the government’s budgeted expenses exceed the limit set by Congress then the debt ceiling must be increased to keep the government from defaulting on its bills.

Our current national debt is set at $13.9 trillion, and the debt ceiling is set at $14.3 trillion. The effects of reaching the debt ceiling without raising it would have a major impact on the entire world as the United States’ government would be unable pay its bills. Austan Goolsbee, chairman of the U.S. Council of Economic Advisers, said if Congress fails to raise the debt ceiling, the “impact on the economy would be catastrophic.”

Budget issues at the federal level are also linked to the capacity of states to provide for the well-being of its residents, particularly families experiencing hardship. Over the past year 46 states have had to face budget deficits of more than $130 billion. California’s response to a $25.4 billion shortfall was to cut billions from public education, and now the state is figuring out how to deal with another $18 billion gap. The governors of California, Illinois, Minnesota and Hawaii have cut programs and increased taxes. Such actions will have a negative impact on the economic recovery from the state to the federal levels. The most recent U.S. Bureau of Labor statistic reports indicate that 317,000 private sector jobs were created, while 70,000 state and local government jobs were lost. Education, job training, decent child care options, and employment are the ingredients that enable Americans to provide for their families while hoping to realize the American Dream of unending opportunity.

As the charts depict, the discretionary budget is only 34 percent of the total spending. Discretionary spending is the part of the budget that can be negotiated and is not mandated by law or an act. All of the cuts recommended by the House of Representatives would come from this segment of the budget and not from the mandatory spending. Additionally, the House wants to cut funding from all the other discretionary spending programs except the giant blue defense budget piece of the pie, which makes up 56% of discretionary spending. 

Action

Tax cuts for the wealthy and money for Wall Street has not yielded benefits for the poor, low-income and middle class families. Now is the time to call for just budget decisions. Tell your representative you want a budget that reflects our values—a belief in the importance of caring for the vulnerable and a vision of America as a land of opportunity. Call the Capitol switchboard at (202) 224-3121 or visit www.senate.gov and www.house.gov.

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March 30, 2011

Congress still hasn’t passed a budget for 2011, and the federal deficit is once again reaching the debt ceiling. According to Austan Goolsbee, chairman of the U.S. Council of Economic Advisors, if Congress fails to raise the debt ceiling, the “impact on the economy would be catastrophic.”

The federal government is temporarily running on stopgap provisions. Congress must determine how to fund the government for the rest of 2011, fund the government for 2012 and keep the government operating until a budget is passed. The U.S. federal budget is a moral document that will impact all of our lives.

Congress now has until April 8 to develop a budget. The House of Representatives proposed House Resolution (HR) 1, which seeks to cut $100 billion more than what the president proposed for 2011 budget. The bigger news is not the level of cuts but from what programs the money was cut. The House is cutting only $19 billion from the $895 billion defense budget. This means $81 billion will be cut from the $520 billion allocated for other services, many of which serve essential social functions. So far, $10 billion has been cut from the 2011 budget due to stopgap resolutions.

The services that HR 1 would eliminate include AmeriCorps, the Corporation for Public Broadcasting (NPR and PBS) and Title I funding for services assisting as many as 957,000 at-risk youth. Cuts include $4 billion in education, 9,000 education jobs, Individuals with Disabilities Education Act (IDEA) funds to states responsible for educating 324,000 children with disabilities, and Pell Grants that would help educate 1.5 million college students.

Women’s health services have taken a big proposed cut as well. Republicans voted for spending cuts to programs that help women escape domestic abuse, help teens avoid unwanted pregnancy and help international children survive into adulthood. Republicans also seek to cut $783.5 million from the USAID’s Child Survival and Health Grants Program. HR 1 also cuts all funding for the remainder of 2011 to the United States Institute of Peace.

According to the Coalition on Human Need, if HR 1 were to become law:

  • 218,000 young children would not be able to receive Head Start services.
  • 10,000 people with long-term disabilities would lose their current rental assistance.
  • 11 million patients would lose health care they’ve receive at community health centers.
  • 20 million people, including 5 million children, 2.3 million seniors and 1.7 million people with disabilities, would lose some or all of the antipoverty help now provided by community action agencies.
  • 9.4 million low-income college students would lose some or all of their Pell Grants.
  • 8 million adults and youth would lose access to job training and other employment services.
  • 81,000 low-income citizens, mostly seniors, would no longer receive supplemental food packages.
  • 1.2 million poor households in public housing will see their rental units deteriorate further because of cuts to maintenance and repairs; some units will no longer be habitable.

The Senate rejected HR 1 and now Congress is at a standstill. Congress has focused its cuts solely on the discretionary spending, which is only 34% of the entire budget, while the mandatory spending (Medicare, Medicaid, Social Security), which comprises 60% of the federal budget, is left unaffected (see charts). The president’s budget, compiled by the National Commission on Fiscal Responsibility and Reform, would cut $4 trillion from the deficit by 2020 and eliminate the national debt by 2035. The commission also advised reforming tax law, Medicaid, Medicare and Social Security.

Many of the social programs that are defunded by HR 1 could survive and prosper under the commission’s plan. The president also suggested a $3 billion increase in international affairs spending, which would improve the quality of life to women worldwide

Action

Tax cuts for the wealthy and money for Wall Street has not yielded benefits for poor, low-income, and middle class families. Now is the time to cut the delay in making just budget decisions. Tell your representative you want a budget that reflects our values: a belief in the importance of caring for the vulnerable and a vision of America as a land of opportunity.

  • View a visual explanation of the president’s fiscal year 2012 budget.
  • Read The Book of Resolutions of The United Methodist Church, 2008, Resolution 4111, “Enabling Financial Support for Domestic Programs,” pages 610-611. 
  • Read The Book of Discipline of the United Methodist Church, ¶163. IV. “The Economic Community,” pages 535-539.
Last Updated: 04/15/2014
 
 

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