The Senate begins debate today on the budget reconciliation bill, which will continue through Wednesday. The bill will most likely be up for vote on the Senate floor on Thursday or Friday.

The Coalition on Human Needs has a good summary in their latest Human Needs Report regarding which entitlement cuts are included in the Senate bill (approved by the Budget Committee last week). The Human Needs Report lists the following details regarding what is (and isn't) included in the Senate bill:

• There are no cuts to foster care, SSI, child support enforcement or child care in the Senate bill.
  
  
• The Senate does not include provisions to reauthorize TANF.
  
  
• The Senate Agriculture Committee declined to cut Food Stamps and instead made larger cuts to commodities and conservation programs.
  
  
• Unlike its House counterpart, the Senate provisions on Medicaid do not require beneficiaries to pay more towards their care. The Senate bill also attempts to close loopholes for seniors who transfer assets in order to qualify for Medicaid nursing home care — but the provisions in the two bills differ, with the Senate's provisions more narrowly targeted.
  
  
• Many of the cuts to Medicaid come from closing loopholes on prescription drugs and revising how Medicaid pays for prescription drugs.
  
  
• The Senate bill cuts about $16 billion from Medicare by eliminating the Medicare stabilization fund for private health care plans, linking Medicare payments to quality of care, and through other cuts not expected to affect beneficiaries.
  
  
• The bill approved by the Senate Finance Committee actually cuts much more than $10 billion from Medicaid and Medicare. But it also includes provisions that increase costs, so the net cut equals close to $10 billion. One expensive provision will increase physician reimbursement rates for Medicare (not in the House bill). The Senate bill also redistributes State Children's Health Insurance Program (SCHIP) surpluses to those states with SCHIP shortfalls, adding $138 million.
  
  
• The Senate bill allows families with disabled children who have incomes slightly above poverty to retain Medicaid coverage, which costs $834 million. (Versions of the Family Opportunity Act have been approved by previous Senates.) Like the House, the Senate bill provides 100 percent federal Medicaid matching payments to states for persons living in areas affected by the hurricanes.
  
  
• The Senate bill contains $13.7 billion in cuts to student loans, which student aid groups estimate will cost students an average of $3,800 in additional costs.
  

The Senate wrapped up work on their final spending bill yesterday. The $145.7 billion HHS appropriations bill is headed to conference with the House, after the Senate added $8 billion in emergency funds to help prepare for a potential avian flu outbreak. The Senate also worked to scale back food stamp cuts in this bill, and included an additional $50 million in food stamp benefits for hurricane victims.

The Bush administration is putting the finishing touches on another Katrina spending relief bill tonight and it is expected on Capitol Hill tomorrow. Early reports indicate the bill will propose to use up to $17 billion in already appropriated funds to begin reconstruction of federal facilities damanged by the hurricanes.

Although there is still a substantial amount of the previously appropriated $62 billion in relief funds left to be spent, federal rules prohibit that money from being spent on other projects, such as repairs of military bases, highways, and other federal infrastructure. The Associated Press reports the shift in funds would most likely be used for "repairs to Interstate 10 in Mississippi and Louisiana and Keesler Air Force Base in Mississippi."

AP: White House Readies New Hurricane Request

Two proposals to boost LIHEAP funding before what promises to be a very expensive winter for many families failed yesterday in the Senate. Sens. Jack Reed (D-RI) and Susan Collins (R-ME) pushed for a proposal which would have increased FY 2006 LIHEAP funding from $2.2 billion to $5.1 billion. The amendment only received 54 votes, and needed 60 for passage because procedural rules in the Senate required the extra spending be coupled with equivalent spending cuts elsewhere.

Additionally, Sen. Judd Gregg (R-NH) put forward an amendment proposing to increase funding from $2.2 billion to $3.5 billion. The amendment offset the spending with an across-the-board cut of almost 1 percent to all programs included in the Labor-HHS appropriations bill. The amendment failed 53-46.

Washington Post: Bid For More Home Heating Aid Fails in Senate

The Congressional Budget Office has prepared a report estimating the budgetary effects of the Finance Committee's reconciliation recommendations. The CBO found that, overall, the committee's recommendations would generate $819 million worth of "savings" in 2006. In 2007, however, because they suggest delaying Medicare payments one year, the proposal would actually end up costing over $4.5 billion. The net cuts from 2006-2010 are estimated to be $10 billion.

This is an impressive amount for lawmakers who are particularly worried about excessive government spending; however the amount is dwarfed by the amount the government is spending for the 2001 and 2003 tax cuts this year alone: $225 billion. It seems like it would make more sense to repeal some of this cost in looking for "savings," in government expenditures, rather than cut corners in programs that serve millions of people.

With reconciliation moving full steam ahead, Sen. Kent Conrad (D-ND) of the finance committee commented, "I have never felt that a budget going through the Congress of the United States is more disconnected from reality than this budget." It truly is disconnected -- the Senate Budget Committee yesterday approved a spending blueprint which would cut $39 billion from mandatory programs over the next five years. Overall the bill would actually produce $71 billion in gross savings, but would put about $32 billion of those savings back into new spending.

The legislation will likely be considered on the House floor next week. House Republican leaders are currently still working to put together 218 votes for support for a larger $50 billion plan. Some Republicans, including Ways and Means Committee Chairman Bill Thomas (R-CA) have privately expressed frustration to House leaders over the increased spending cut targets. Ways and Means, for example, is now being pressured to cut $8 billion, which is up from $1 billion in the original FY06 budget resolution.

House and Senate appropriators have mapped out a plan for finishing work on all 11 appropriations bills before Thanksgiving, however there is some speculation that reconciliation will force GOP leaders to work slowly on appropriations to keep pressure on members to stay in town into December to complete other unfinished business.

Congressional conferees are expected to wrap up work on the FY 2006 Agriculture spending bill this week, and if all goes according to plans, appropriators may complete negotiations on a $30.5 billion FY06 Energy and Water bill this week. The week of November 7 they are hoping to complete work on the Defense spending bill (including $50 billion for overseas military operations), as well as the Science-State-Justice-Commerce and Military Quality of Life measures. Their ambitious plan also includes passage of the Labor-HHS and Transportation-Treasury bills the week before Thanksgiving, as well as a short-term continuing resolution (the current CR expires Nov. 18) to give President Bush time to sign remaining spending bills into law. We'll see if they will actually be able to come to a consensus on reconciliation and tackle all of this approps work in the weeks ahead.

Even though the amendment the House was considering voting on last week to increase the budget cuts in reconciliation to $50 billion from $35 billion is off the table due to a lack of votes, many members of the House leadership are still focused on getting these budget cuts through the reconciliation spending bill. House Majority Whip Roy Blunt, who is temporarily serving as House Leader for Rep. Delay (R-TX), noted yesterday that House remains committed to approving $50 billion in cuts in the final package, saying.

These cuts, which were harmful at $35 billion, will cause significantly more damage at $50, and are unnecessary in the wake of Katrina, even though many lawmakers are saying otherwise.

The House will set to work on the reconciliation budget bill tomorrow, with markups in eight separate committees. The Energy and Commerce Committee will be looking to trim as much as $12 billion from Medicaid over five years. These cuts could be problematic for some members of the Energy and Commerce Committee Republicans such Rep. Heather Wilson (R-NM), who was responsible for sending a letter to Budget Committee Chairman Jim Nussle back in April, asking him to remove reductions to Medicaid in the reconciliation instructions. The letter was signed by 43 other Republicans, including former leader Tom Delay, Speaker Dennis Hastert, and House Whip Roy Blunt. The cuts to Medicaid which would be included in the House budget reconciliation bill would, unlike the Senate Finance Committee proposal, hit Medicaid beneficiaries directly.

The House reconciliation instructions will also look at ANWR, offshore drilling, and LIHEAP funding. According to BNA, on Wednesday and Thursday of this week two House committees "plan to mark up language that would open the Arctic National Wildlife Refuge, expand offshore oil and gas exploration, and increase federal assistance to low-income families that need help paying their winter heating bills." Opening the ANWR coastal plain to oil and gas leasing is projected to raise $2.4 billion over five years (although this money is not guaranteed), yet will have a number of environmental consequences and do little to alleviate national dependancy on oil.

House Energy and Commerce Committee Chair Joe Barton (R-TX) also plans to ask for an extra $1 billion to fund LIHEAP, which provides heating and cooling assistance to one out every five American families. In the Senate there have been two amendments to increase LIHEAP funding by $3.1 billion. Each of the two votes, which were procedural, have been rejected; however in anticipation of a 50 percent increase in heating bills many will be experiencing this winter, it is almost certain funding will go up significantly. The White House is expected to request a third supplemental spending bill for hurricane recovery by the end of this week, and that could potentially be a vehicle through which LIHEAP funding could be increased.

Senators have been working this week through a number of amendments related to the appropriations bill to provide funding for treasury, transportation, housing, and judiciary programs for FY 2006 (H.R. 3058), and on Wednesday the White House issued a handful of veto threats against the bill.

According to BNA, in the Statement of Administration Policy issued by the White House, veto threats "were levied against transportation programs, an easing of sanctions against Cuba, and the lack of a ban for the use of certain federal dollars to carry out abortions." Specifically relating to transportation, the White House threatened a possible veto if:

In related news, the White House may flag the Finance Committee's Medicare proposal, which would cut more than $10 billion from Medicare and Medicaid. The White House is unenthusiastic about the proposal mostly because of the committee's decision to save about $5.4 billion by draining a fund which provides incentives to private health plans. Insurance planners also said the move was unfair in that it changes "the rules governing how private plans interact with Medicare before the new drug benefit kicks in." The committee, however, chose to make a cut in this fund to avoid some having to make more politically difficult cuts that would directly affect Medicare beneficiaries.

Although House GOP leaders dropped plans to vote on an amendment to the budget resolution to raise the level of cuts to mandatory spending from $35 billion to $50 billion, it appears GOP leaders are trying to save face by bringing a non-binding amendment, or an expression of preference, to the floor next week. The amendment would embody all four points of the "Hastert plan," including an increase in mandatory cuts to $50 billion, additional rescissions of unspent appropriations, "de-authorizing" unnecessary programs and an across-the-board cut in non-combat discretionary spending, but would do absolutely nothing to make sure those measures are actually implemented.

It is unlikely the Senate will be looking to increase cuts since they are still struggling this week for consensus on just $35 billion in cuts.

The Senate Finance Committee, after days of deliberation, agreed today to $10 billion in Medicare and Medicaid cuts, to take place over the next five years. The cuts will come primarily from Medicare, as the measure would cut $18.6 billion from the Medicare and $7.7 billion from Medicaid. It also, however, would boost spending on various Medicaid and Medicare programs. They will markup the measure early on Monday, which will pave the way for the bill to be included in the Senate Budget Committee's reconciliation package, slated to be put together October 26.

As speculated earlier today on the Budget Blog, the House GOP leadership has pulled an expected amendment to the budget resolution from Thursday's floor schedule. There is no indication currently if this is simply a delay or a cancelation of the amendment. Either way, it shows that both the GOP leadership and the conservative Republican Study Committee do not have the influence necessary to push through more drastic cuts to low-income entitlement programs in the new political enviornment post-Katrina.

It appears Republicans are laying the groundwork to positively spin the possible collaspe of support for an amendment to the budget resolution that would increase cuts to entitlement programs from $35 to $50 billion over the next five years. As of today, it appears the House leadership still does not have the 218 votes necessary to pass the amendment.

Undetered, acting-Majority Leader Roy Blunt (R-MO) declared today, "Our chairman, frankly, can do [these additional cuts] without a vote and are moving forward." He added, "I don't think the Conference is divided at all. I think we have a plan. The question is: At what point do we bring that plan to the floor."

Yet Blunt did not elaborate on how he thought the leadership would be able to pass the actual reconciliation bill with $50 billion in cuts (whenever they decide to bring it to the floor) if they could not muster the suppoort for an amendment that is merely a verbal committment to pass the cuts. It is possible to use a tactic favored by this leadership group, which is holding the vote open for extended periods until they twist enough individual arms and offer enough consessions and sweateners to get the votes they need. Democracy at its finest!

The Agriculture Committee in the Senate is required under the FY06 budget reconciliation instructions to cut to cut $3 billion from mandatory agriculture programs. One of the programs at risk of being cut was the food stamp program, however today Senate Ag Committee Chairman Saxby Chambliss (R-GA) dropped plans to cut the program by $574 million. They would have achieved their savings in the food stamp program by requiring families receiving non-cash state welfare assistance -- who are currently automatically eligible for food stamps -- to apply separately. This would have brought down the number of families who use the program.

Instead, he will reduce the amount of money farmers can get in certain farm subsidy payments that are made in advance. According to CongressDaily,

"The change in the percentage of direct payments a farmer can get early in the year raises the savings from $518 million in Chambliss' first plan to almost $1.1 billion. The impact is to deny farmers the use of that money during the production season. Farmers will continue to get the full direct payment promised under the 2002 farm bill minus a 2.5 percent reduction in all farm programs, but making the payment later in the year creates budget savings."

NY Times Coverage

CongressDaily reported this morning that House GOP leaders have decided to drop plans for now to include across-the-board cuts to FY 2006 discretionary spending as part of an amendment to the budget resolution which was passed last April. Although across-the-board cuts have been dropped, the amendment is still expected to call for $50 billion in entitlement cuts, which is an increase from the $35 billion designated in the original FY06 budget blueprint. This amendment could be on the floor as early as Thursday.

The cuts were dropped partly because of the belief that committing so soon to them would hamper negotiations with the Senate on FY06 spending bills, said GOP Conference Chairwoman Deborah Pryce of Ohio.

The Senate does not have plans to consider a similar budget amendment, and members are currently focused on the reconciliation process, which begins today. Senate Republicans are looking for additional budget cuts, but the Finance Committee, last night, was unable to coalesce around a plan to cut at least $10 billion from the Medicare and Medicaid programs. The deadline for the committee to finish work on the package is quickly approaching, and because Finance Committee rules require 48 hours' notice before a markup can take place, Grassley has convened a meeting this morning in the hopes of reaching an agreement. The Budget Committee is supposed to mark up a reconciliation bill incorporating bills from all committees by Oct. 26. If they do not do so, it could open the door to procedural hang-ups, and according to Finance Committee ranking member Max Bauuus (D-MT), "presumably any senator could offer a motion to recommit."

Also on Monday, Senate Finance Committee Chair Charles Grassley (R-IA) acknowledged that the committee might not be able to produce enough revenue-raising offsets to extend all tax cuts expiring this year under the budget reconciliation process. He did insist, however, that Congress would be able to pass a tax cut reconciliation package this fall, saying, "We can do the $70 billion without any problem."

This month, the federal government reported its third-highest budget deficit in history for fiscal year 2005, which ended on September 30. The deficit, at $318.6 billion, was 2.6 percent of gross domestic product.

Bush administration officials praised the report, citing the improvement over last year's $412.8 billion deficit and are continuing to claim the president will still meet his goal of reducing the deficit in half by 2009. Yet as we have previously reported, President Bush's policies will drastically increase the deficit beyond 2009. This has been confirmed by the Congressional Budget Office, which has projected the deficit doubling to $640 billion in 2015; the national debt rising to $9.2 trillion; and interest paid on that debt almost tripling, going from $182 billion last year to $458 billion in 2015 if we continue the President's policies.

It seems the most "fiscal conservatives" in the House, the extremely right-wing Republican Study Committee, has gained the upper hand in their push for increased budget cuts in reconciliation. This week House GOP lawmakers will begin taking steps to cut as much as $50 billion from the FY 2006 budget. These cuts will effect areas such as health care programs for the poor, food stamps, and farm supports, and may also include across-the-board cuts in other programs.

A month ago, when the RSC first called for stepped-up budget cuts in the wake of Hurricane Katrina, House leaders tried to terminate their efforts behind closed doors. However, now House leaders are embracing this call for extensive budget cuts. With the leadership in turmoil because of Majority Leader Tom Delay's (R-TX) indictment, leaders, according to the Washington Post, "had no choice but to firm up support with their conservative base... according to lawmakers and leadership aides."

Part of what is driving the Republican Study Commitee, which is headed by Rep. Mike Pence (R-IN), is a concern regarding spending in the wake of Hurricane Katrina, which is projected to possibly exceed $200 billion. This group has, on occasion, criticized the administration and their Congressional colleagues for participating in what they call run-away spending. Since Bush came to office, federal spending has increased by approximately one-third, from $1.86 trillion to $2.47 trillion, and deficits have risen. What does not add up is that this same group supports the tax cut measure slated for passage in reconciliation, which amounts to $70 billion in un-offset federal spending. They also support the extension of Bush's 2001 and 2003 tax cut provisions, which would cost over $1 trillion in lost revenue over a decade.

It seems that the $200 billion cost of Katrina - a one-time expenditure that will not add to the deficit for more than one year, is nothing but an excuse for these members to gain some traction for their real goal: shrinking the size of government significantly by defunding public programs which serve to help millions of people every year. It is a push for cold-hearted disinvestment in our country during a time when so many people -- both Katrina victims and others -- are in need. And it is masked in the cloak of "fiscal responsiblity." In reality, it would be difficult for the RSC's definition of fiscal responsibility to be any less responsible, both in regards in to the well-being of citizens and in regards to future deficit projections.

The Congressional Budget Office released a report titled Long-Term Economic Effects of Chronically Large Federal Deficits yesterday. The report discusses how deficits affect national saving, financial markets, and capital inflows.

The report points out that while temporary deficits (such as those brought about by unanticipated spending for events such as Hurricane Katrina) can serve to support economic activity, large federal deficits (such as those created by chronic tax cutting) serve to reduce future living standards by "slowing the accumulation of national wealth as they lower national saving.... by shifting resources into public and private consumption through increases in federal spending cuts in federal taxes." The report also notes that policies which increase the deficit but also "provide incentives for people to work, acquire more skills and education, undertake research and development, invest, innovate, or use resources more efficiently may do less harm to future living standards than policies that increase the deficit without providing such incentives."

It appears the House Budget Committee has moved the deadline for budget reconciliation back yet again. After initially postponing the deadline post-Katrina, the committees were slated to get their spending proposals to the Budget Committee the week of Oct. 17, but Chairman Jim Nussle (R-IA) was able to push back the deadline to Oct. 28. The hope for Nussle is that this pushback will give committees an extra week to submit proposals for cutting mandatory spending to the budget panel. The Senate, apparently, will not join the House in this spending bill delay.

Nussle has proposed amending the FY 2006 budget resolution to call for across-the-board cuts in discretionary spending. His proposal notably calls for cuts in both defense and homeland security spending, as well as increased cuts in mandatory programs such as Medicare.

The calls for increased cuts have been increasing along with Republican restlessness over how to save money to pay for the costs of Katrina recovery. Groups such as the Committee for a Responsible Federal Budget have lauded Nussle and others for their attempts to bring down the deficit by increasing budget cuts, yet are ignoring the fact that these same lawmakers support passing $70 billion worth of deficit-financed tax cuts in reconciliation. The Democratic Senate leadership has taken steps to urge Congressional GOPs that it is more important to deal with immediate needs of hurricane victims and rising energy prices, as opposed to passing another round of tax breaks through reconciliation. Minority leader Reid (D-NV) and a number of other Democratic Senators sent a letter to Majority leader Frist (R-TN) on Friday, outlining those points.

Yesterday the Congressional Budget Office revised their deficit estimate for FY 2005, stating that the deficit will be $317 billion. As Sen. Conrad (D-ND) said in a statement on the deficit figure, when the Social Security and other trust fund surpluses also being spent are added in, the debt in 2005 will actually increase by $575 billion. Also, while the cost of the hurricanes will not add a lot to the deficit in 2005, we can expect the 2006 deficit to increase significantly because of disaster-related spending.

As the Center on Budget and Policy Priorities points out, while this figure is down from last year, it is largely due to an increase in tax collections from last year. And without the 2003 tax cuts revenues would be higher, and deficits smaller. To read more on the CBO's calculations, see their Monthly Budget Review.

Posted by Becky Lewis, 01:45:22 PM



Budget and Tax Cuts Will Hurt Most Vulnerable

Yesterday the Coalition on Human Needs sent a sign-on letter to Congress, requesting that lawmakers focus on addressing human needs issues in the wake of the natural disasters, rather than focus on cutting both entitlement spending and taxes. The letter was endorsed by approximately 750 groups; at least one from every state.

In a boost to Budget Chairman Jim Nussle's plans to enact substantial budget cuts to offset the cost for recovery from Hurricane Katrina, House Speaker Hastert announced yesterday the approval of a package of cuts modeled after Nussle's plan. "In order to maintain our commitment to deficit reduction, we are proposing to move a mid-session Budget Amendment for the first time in almost 30 years (1977)," Hastert said in a written release. The release also detailed the following proposals for offsetting Katrina costs:

• An "additional across the board cut of '06 discretionary spending." Permanently eliminate and "deauthorize" programs that House appropriators have zeroed out.
  
• Increase total minimum reconciled mandatory savings from $34.7 billion to $50 billion. "In addition to the $50 billion, we will offset dollar-for-dollar the new mandatory spending included in reconciliation/entitlement reform that is required to address the disasters."
  
• "We will bring forward packages of additional rescissions to further help offset reconstruction costs. Congress must develop, with the President, a budget for reconstruction and a plan to pay for it."

What is truly befuddling about this statement is Haster's claim of a committment to deficit reduction. It has been under his leadership that the Congress has enacted reckless and short sighted tax and budget policies that have driven the federal government back iinto the red in the first place. And Hastert does not have a committment to deficit reduction - he has a committment to cutting programs and services and reducing the size of government. If the Speaker was serious about deficit reduction, he would be talking about either tax rollbacks or increases in addition to budget cuts.

During a Senate Finance Committee hearing this afternoon at which Secretary of the Treasury John Snow was testifying on the president's tax incentive proposals for rebuilding the Gulf Coast, Chairman Charles Grassley (R-IA) vocalized his anger at the White House for what he perceives to be a covert effort to derail legislation to temporarily extend Medicaid to hurricane victims. “Unfortunately, the White House is working against me behind the scenes, and I resent that considering how much I’ve delivered for the White House” in recent years, Grassley said.

Sens. Grassley and Max Baucus (D-MT), the ranking member on the Finance Committee, have been trying to win approval from a number of conservative Senators for legislation that would extend Medicaid coverage to all low-income victims of Hurricane Katrina and guarantee that the federal government would pay for 100 percent of the costs. The legislation is supported by the National Governors Association, Majority Leader Biill Frist (R-TN) and Minority Leader Harry Reid (D-NV), the American Medical Association, and dozens of other groups.

The White House has proposed instead to grant a waiver to individual states who are currently providing health care coverage for victims. This proposal has been heavily criticized, particularly by the Center on Budget and Policy Priorities for excluding many low-income vicitims from receiving benefits and for not assuring states that 100 percent of the cost would be covered by the federal government.

Grassley has previously threatened to withhold support or delay the tax reconciliation bill his committee must write this fall if Senators do not support his Medicaid bill. Unfortunately, it seems these threats have had little impact.

Division in Congress appear to be widening over plans to offset emergency spending in the wake of Hurricane Katrina. The House seems intent on instituting an across the board cut to discretionary spending in addition to finding 10 percent more cuts in the reconciliation spending bill this fall, while the Senate has rejected the across the board cut and is focusing on the reconciliation bills and appropriations pork projects.

Yet neither chamber is being realistic or genuine in their quest to pay for Katrina spending. Even the most generous estimates of the total cuts Congress could enact to the budget would only pay for approximately 10 to 15 percent of expected Katrina costs. And while the justification for these cuts has been concerns about the deficit, the GOP is insisting on continuing with plans to pass $70 billion in unpaid-for new tax cuts this fall through the reconciliation process. This tax cut bill will actually increase the deficit, despite severe cuts to the budget that will leave Americans less secure, and is conterproductive to other efforts to find offsets for Katrina.

If Congress is truly concerned about dealing with the deficit in light of Katrina costs, it needs to address both the spending and revenue side of the equation. There is evidence some Republicans in the Senate are somewhat tuned into this reality, such as Sens. Lincoln Chafee (RI), George Voinovich (OH), and Susan Collins (ME). But it will take a more genuine effort by GOP leaders to revisit the necessity of tax cuts for the most well off in our society in order to change course this fall.

As House Budget Chairman Jim Nussle (R-IA) continues to push for an amendment to the budget resolution passed in April to institute an across the board cut to discretionary spending by 2 percent, many Republican members of the Senate have expressed reservations or outright disdain for such a plan, threatening its survival.

While not ruling out any avenue for finding budget cuts to offset the cost of Hurricane Katrina relief and reconstruction spending, a number of key Senate Republicans criticized Nussle's proposal. Senate Budget Committee Chairman Judd Gregg's (R-NH) preference is to use the reconcilation process already in place to look for larger cuts to entitlement programs. Senate Majority Leader Bill Frist (R-TN) called Nussle's proposal a "nonstarter," ruling out re-opening the budget resolution. And Defense Appropriations Subcommittee Chairman Ted Stevens (R-AK) stated he opposes the proposal and believes a substantial majority of the Senate would also oppose it. Discretionary spending makes up only 26 percent of the total federal budget and Stevens believes it should not have to shoulder a disproportionate share of the cuts.

Unfortunately, Congress has yet to realize the damage done by cutting investments in America to pay for Katrina costs will not only make communities and families around the country less secure, it will actually do very little to offset the cost of Katrina. It's time Congress realizes it needs to revisit the massive tax cuts for the wealthy if it wants to truly keep Katrina spending deficit neutral.

The White House and many Congressional GOP leaders continue to oppose the Grassley/Baucus Medicaid bill to expand Medicaid eligibility for displaced Hurricane Katrina victims. Sens. Charles Grassley (R-IA) and Max Baucus (D-MT) of the Finance Committee have encountered resistance to their bill from conservatives who object to its cost. However, Grassley noted yesterday that "some of the very same people that are impediments" to the bill will be looking to him for help extending the capital gains tax cut this year.

Last friday Sen. John Sununu (R-N.H.) blocked Grassley's attempt to bring the Medicaid bill up for an unanimous consent vote in the Senate. In response, Grassley warned that there might not be a reconciliation bill for spending or tax cuts if key conservatives continue to oppose his Medicaid bill.



Posted by Becky Lewis, 03:13:31 PM



Bush and GOP Leaders Call for More Budget Cuts

In a news conference yesterday, President Bush put pressure on Congress to pay for as much of the hurricane relief as possible by cutting spending. He urged that funding be cut in both non-defense discretionary spending and entitlement spending. His comments prompted House Budget Committee Chairman Jim Nussle (R-IA) to claim that he will seek even more cuts in entitlement expenditures than those laid out in April's budget resolution. Currently the resolution instructs that entitlement spending be cut by $35 million over the next five years.

Nussle said in an interview that Gulf Coast reconstruction costs should be partly offset through across-the-board reductions in discretionary spending, beginning with a 2 percent "haircut" from the $843 billion agreed to under the FY06 budget." The Coalition on Human Needs has an analysis highlighting how those cuts will affect human needs programs. One has to wonder where these gestures of fiscal responsibility were when Congress passed trillions of dollars worth of tax cuts in 2001 and 2003, which were not offset by any spending cuts. That Congress also wants to push ahead with extending reduced rates for capital gains and dividends taxes -- tax breaks which benefit primarily the wealthy -- further serves to illustrate that these spending cuts could be avoided.

Bush also asserted yesterday that even though Congress has a "diminished appetite" for overhauling Social Security, he has not taken the issue off the table. Bush said, "Social Security for me is never off. It's a long-term problem that's going to need to be addressed." However, the solutions he claimed to support a few months ago would lower guarenteed benefits and cost $700 billion over the next decade. Not exactly a great way to cut down federal spending.