Deficit Reduction on the Backs of the Most Vulnerable

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The House GOP is boasting that their spending bill to fund the government for the remainder of fiscal year 2011 makes the largest cuts to domestic annual spending in history. But you don’t hear them boasting that these cuts will cut unemployed workers off of job training, force low-income veterans into homelessness, result in millions of low-income college students losing some or all of their education aid, or cause tens of thousands of vulnerable seniors to lose access to home-delivered food baskets.

And you certainly don’t hear them touting that allowing just one year’s worth of bonus tax breaks for the wealthiest Americans to lapse would reduce the deficit twice as much as the cuts to low-income programs outlined in the appendix.

Congress recently proposed a short-term bill to avoid a government shutdown. It contains smaller, more reasonable cuts to fund the government for two weeks while negotiations continue on a full-year funding bill. But the GOP position is reflected in the cuts below, which they proposed in their original continuing resolution for FY2011.

The timing for these cuts couldn’t be worse:

At a time when approximately 14 million Americans are out of work…

Cuts in the GOP bill would:

• Result in more than 8 million adults and youth losing access to job training and other employment services.
• Eliminate successful jobs programs such as YouthBuild, national service programs, and the Green Jobs Innovation Fund.

At a time when unemployment is still at 9 percent…

Cuts in the GOP bill would:

• Imperil economic growth and drive up the jobless rate. New analysis by economists at Goldman Sachs shows that GOP-passed cuts would reduce economic growth by 1.5 to 2 percentage points in the next two quarters. Based on historical economic relationships this could push the unemployment rate back up to 9.7 to 10 percent.

At a time when 135,000 veterans are homeless…

Cuts in the GOP bill would cut in half the number of veterans who would receive housing vouchers this year, preventing 10,000 low-income veterans from receiving assistance to avoid homelessness.

At a time when the United States is now 12th worldwide in the percentage of 25- to 34-year-olds with a college degree…

Cuts in the GOP bill would:

• Result in 9.4 million low-income college students losing all or some of their Pell grant.
• Reduce the maximum Pell grant by 17.4 percent.

At a time when nearly one in six Americans live in households struggling against hunger…

Cuts in the GOP bill would:

• Result in 81,000 people—mostly vulnerable seniors—losing access to the nutritious food baskets they receive through the Commodity Supplemental Food Program.

At a time when there is a shortage of 3.1 million affordable housing units for extremely low-income families….

Cuts in the GOP bill would:

• Result in 10,000 people with serious long-term disabilities losing rental assistance through the Section 811 voucher program. Most of these would lose their homes.
• Allow the housing units of the 1.2 million low-income families in public housing to deteriorate as the Public Housing Capital Fund—which makes maintenance and repairs on the U.S. stock of public housing—is cut by over 40 percent.

At a time when the number of households requesting help for heating and cooling assistance is expected to reach record levels…

• Cuts in the GOP bill would essentially wipe out the Low-Income Home Energy Assistance Program Contingency Fund for the rest of 2011. The fund helps families cope with harsh weather conditions and spiking fuel costs.[1]

At a time when one in seven Americans and one in five children live in poverty…

Cuts in the GOP bill would:

• Cut off 218,000 low-income children from early learning opportunities provided by Head Start and close more than 16,000 Head Start and Early Head Start classrooms. [2]
• Affect the access of over 20 million low-income people who depend on community action agencies for a range of antipoverty services.

Sadly, not everyone is being asked to share in this sacrifice. The latest census data show that from 2008 to 2009 almost everyone’s income continued to fall in the Great Recession except for the top 5 percent of Americans.

At a time when the richest 5 percent of Americans claimed almost 22 percent of all income in 2009 and the top fifth took home fully half of the nation’s income…

We should be looking at both spending and revenue to address the deficit. Just one year of the tax cuts for those earning over $250,000 per year is worth more than twice as much as much in deficit reduction as the cuts inflicted on programs assisting low-income families combined (see appendix for sampling of programs).

We all agree that we need to tackle our long-term deficits. But the House GOP proposal apportions most of the sacrifice to low-income families, homeless vets, and disabled and elderly Americans, instead of taking a balanced approach and examining the entire budget for wasteful tax expenditures, unnecessary military spending, targeted spending cuts, or fair and efficient ways to raise revenue.

For more information on the impact of the cuts see the report by Half in Ten partner The Coalition on Human Needs, “A Better Budget for All: Saving Our Economy and Helping Those in Need.”

Melissa Boteach is the Half in Ten Manager at the Center for American Progress Action Fund.

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Endnotes

[1]. The House slashed nearly $400 million from a $590 million fund. But because $150 million had already been spent only about $65 million would remain for the rest of the year to deal with heating or cooling needs.

[2]. This number includes 61,000 Head Start and Early Head Start slots slated to expire under the Recovery Act.