|820 First Street, NE
Washington, DC 20002
Iris J. Lav
Board of Directors
David de Ferranti, Chair
John R. Kramer, Vice Chair
Henry J. Aaron
Barbara B. Blum
Marian Wright Edelman
James O. Gibson
Beatrix Hamburg, M.D.
Richard P. Nathan
Robert D. Reischauer
Juan Sepulveda, Jr.
William Julius Wilson
HOUSE BUDGET CONTAINS LARGE CUTS IN
The budget plan passed by the House on March 21 contains deep and widespread cuts in basic domestic programs such as Medicaid, veterans programs, student loans, school lunches, child care, food stamps, cash assistance for the elderly and disabled poor, and many other programs. (See the appendix for an explanation of the calculations used in this paper.) The budget would require Congressional committees to cut mandatory programs by $265 billion over the next ten years.
The cuts are reminiscent of those proposed by former House Speaker Newt Gingrich in
1995 and included in the Contract with
If the committees cut all programs within their jurisdictions by the same percentage, the cuts would include:
Deep cuts in Medicaid are unavoidable. The Nussle budget also would cut discretionary or non-entitlement programs (other than defense spending) well below the Presidents request. Non-defense discretionary programs would be cut $200 billion over ten years below the Congressional Budget Office baseline, which equals the 2003 levels for these programs, adjusted for inflation. These cuts could affect a wide variety of programs from education programs to environmental protection programs to programs for poor children.
While requiring deep cuts in domestic programs, the budget makes room for most of the Presidents large tax-cut package, including $1.4 trillion in tax cuts through 2013. The tax cuts in the Presidents growth package alone, all of which are included in the Nussle budget, would cost $726 billion over ten years and would, according to the Tax Policy Center, result in tax reductions averaging $90,000 each in 2003 for those Americans who have incomes of more than $1 million.
Class warfare turns out to be alive, Center director Robert Greenstein commented. It is a centerpiece of the House-passed budget, with deep budget cuts that could harshly affect the poor, the vulnerable, and many middle-class Americans, alongside lavish tax cuts for the nations richest individuals. With this budget, we would be marching down the path toward a new Gilded Age.
The House budget serves one very useful purpose. Greenstein added. It shows that these large tax cuts arent free, and that at bottom, the issue is one of national priorities. This ought to trigger a national debate. Are tax cuts averaging $90,000 a year for millionaires so high a priority that we should cut health care programs, increase the ranks of the uninsured, reduce the cost or limit the availability of student loans, and increase hardship among the disabled, poor children, and others to free up room for massive tax cuts?
The budget plan passed by the House on March 21 assumes cuts in almost all entitlement programs. During markup, House Budget Committee Chairman Nussle indicated that he assumed entitlement programs would be reduced proportionally; he said this was the basis on which the figures for each budget function and each reconciliation target were derived.
The Chairman has distributed a table showing the reconciliation targets for each committee i.e., the amounts by which each committee is required to reduce entitlement programs, relative to current law. He also prepared a table showing the resulting level of mandatory spending in each budget function. These tables show
# # # #
The Center on Budget and Policy Priorities is a nonprofit, nonpartisan research organization and policy institute that conducts research and analysis on a range of government policies and programs. It is supported primarily by foundation grants.