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White House Cutting $10 Billion in Appropriations for Poverty and Other Programs While Promoting a $670 Billion Tax Cut
Posted January 18, 2003

By U.S. Newswire

WASHINGTON, Jan. 17  -- Following is a statement by Robert Greenstein and Richard Kogan of the Center on Budget and Policy Priorities (CBPP): 

Cutting $10 Billion in Appropriations for Poverty and Other Programs While Promoting a $670 Billion Tax Cut: Does This Represent Fiscal Discipline and Balanced Policy? The omnibus appropriations bill for fiscal year 2003 that the Senate is now considering contains a series of cuts that would adversely affect workers hard hit by the economic downturn, low-income elderly and disabled individuals and low-income children, and states, which are facing their worst fiscal crisis in 50 years. 

The legislation cuts approximately $10 billion from the funding levels the Senate Appropriations Committee approved, on a unanimous and bipartisan basis, last summer and fall. This $10 billion cut has been made at the White House's insistence. The Senate Appropriations Committee was given no choice but to adhere to the total funding level set by the White House. The White House has contended these cuts are needed to maintain fiscal discipline and address budget deficits. In light of the White House's proposed $674 billion "growth package," the
Administration's rationale is difficult to discern.

-- The Administration argues that its $674 billion package, which includes $670 billion of tax cuts, is needed to shore up a struggling economy. Yet by the White House's own figures, only $59 billion of the $674 billion would occur in calendar year 2003 and less than $40 billion would go out the door in fiscal year

-- Many of the cuts in the omnibus appropriations bill would take money out of the economy now. For example, the $349 million cut in the Low Income Home Energy Assistance Program would take $349 million out of the pockets of poor elderly or disabled people and poor families.

-- Other cuts in the legislation include a $530 million cut in job training, a $63 million cut in Head Start, and a $305 million cut in funds to operate and maintain public housing. (These cuts are compared to fiscal year 2002 levels; the cuts are larger when the effects of inflation are taken into account.)

-- It is difficult to understand why fiscal discipline demands shaving $10 billion from fiscal year 2003 appropriations but permits the more than $630 billion in revenue losses that would occur after fiscal year 2003 under the Administration's growth package.

-- Despite Administration claims, the $10 billion in funding reductions are not necessary to avoid a "spending explosion" in domestic appropriations. Funding for domestic programs outside homeland security would decline as a share of the economy (that is, of the Gross Domestic Product) in 2003 even if none of the $10 billion in reductions were made.

At bottom, the issue is one of values and priorities. Should funds for job training for the unemployed, child care and education for disadvantaged children, assistance for the poor in paying winter heating bills, and repairs to public housing be cut back to free up resources for more tax cuts disproportionately geared to the nation's most affluent members? The Administration's "growth package" would provide an average of at least $15 billion per year in tax cuts over the coming decade to households that make more than $1 million per year -- the top 0.2 percent of households -- according to estimates based on calculations by the Brookings-Urban Institute Tax Policy Center.




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