GOP Budget Cuts Would Hit Poor Hard 

By David Rogers
Politico.com
May 17, 2011

http://www.politico.com/news/stories/0511/55088.html

It's Back to the Future, and who woulda' thought: Bill
Clinton's the new target.

After campaigning on the promise to roll back spending to
Bush-era levels, House Republicans have overshot their mark
and landed in the last years of the Clinton administration -
at least in the case of cuts from labor, health and education
appropriations important to poor and working-class families.

Indeed, a proposed $139.2 billion cap for the annual labor,
health and education bill is about $19 billion less than the
eight-year average for the same discretionary spending under
former President George W. Bush - when measured in current
dollars. It comes closest, in fact, to a bill negotiated in
late 2000 by the man who's the White House budget director
again, Jack Lew.

The Back to the Future scenario is important to the current
debt ceiling debate on two counts.

First, it underscores the often heavy concentration of cuts
from programs most sensitive to low-income families. Second,
if Clinton-era appropriations are truly the new standard, it
invites more study of the past decade and the parallel growth
of tax cuts and discretionary spending since he left, both
contributing to the deficit crisis today.

A wave of new data from the Congressional Budget Office is
relevant here.

CBO, which in 2001 famously predicted a $5.6 trillion surplus
through this year, released a new analysis showing how the
tide swung by $11.8 trillion, leaving trillions in red ink.
The single biggest cause was a $3.4 trillion drop from CBO's
revenue projections - attributed to a poorer-than-expected
economy. But new appropriations and tax cuts were big
factors, as well.

An estimated $2.945 trillion in added costs is attributed to
discretionary spending from 2002 through 2011, including what
most observers would estimate is about $1.1 trillion related
to wars overseas, chiefly in Iraq and Afghanistan. At the
same time, tax cuts themselves added up to $2.8 trillion,
bolstering the Democratic argument that new revenues must be
part of any deficit-reduction deal, along with spending cuts.

CBO released the numbers even as it threw cold water on the
GOP for overpromising what can be truly saved through an
intense focus on appropriations.

When the April budget deal was reached on 2011 spending, for
example, House Speaker John Boehner (R-Ohio) insisted the
cuts would translate to $315 billion in savings over the next
10 years. Boehner based that boast on numbers provided by a
Republican staffer on the Senate Budget Committee, but CBO
projected the 10-year outlay savings at $122 billion when
measured against its March baseline.

If last August's higher CBO spending baseline is used
instead, the savings would be higher but still only about
half of what the speaker had insisted upon.

Appearing before the Economic Club of Chicago, House Budget
Committee Chairman Paul Ryan (R-Wis.) again rejected any
suggestion that revenues be part of the equation. And taking
the fight up a notch, the young chairman derided President
Barack Obama for preaching 'shared sacrifice' but promoting,
he said, a message of 'shared scarcity' and, inevitably,
'class warfare.'

'To an alarming degree, the budget debate has degenerated
into a game of green-eyeshade arithmetic, with many in
Washington - including the president - demanding that we
trade ephemeral spending restraints for large, permanent tax
increases.' Ryan said. 'We are really just arguing over who
to hurt and how best to manage the decline of our nation. - I
call it the ‘shared scarcity' mentality.'

'If we succumb to this view that our problems are bigger than
we are - if we surrender more control over our economy to the
governing class - then we are choosing shared scarcity over
renewed prosperity and managed decline over economic growth.
That's the real class warfare that threatens us - a class of
governing elites picking winners and losers and determining
our destinies for us.'

But for longtime budget observers like Robert Greenstein of
the progressive Center on Budget and Policy Priorities,
Ryan's budget is in a class of its own.

'I have never seen a budget so badly skewed that has gotten
so far past either house of Congress,' said Greenstein, who
lived through the Reagan tax cuts and budget wars of the
'80s. 'The bottom line is the House budget is a huge Robin
Hood in reverse and its own form of class warfare. In terms
of a budget that has actually passed any chamber, I think
this is probably - by a substantial margin - the harshest to
people at the bottom.'

Medicaid and food stamps - both income sensitive - account
for 30 percent of all the mandatory spending savings in the
House budget. And apart from the labor, health and education
bill, transportation and housing appropriations are targeted
for a cut 14 percent beyond April's agreement.

Changes in the Pell Grant program, targeted to college
students from low-income families, can affect some of these
historic comparisons of education spending. But a second
variable - not reflected by the inflation adjustments - is
the growth in poverty in the same period.

In 2001, for example, census data showed a poverty rate of
about 11.7 percent, affecting 32.9 million individuals. By
2009, the most recent year for available data, the rate was
up to 14.3 percent, affecting over 10 million more people.

Ryan's Chicago appearance came as senior House Democrats
sought out their own business audience in New York - on
resolving the same debt issue.

Minority Leader Nancy Pelosi of California was accompanied by
Assistant Minority Leader Jim Clyburn of South Carolina and
Chris Van Hollen of Maryland, ranking member on the Budget
Committee. 'These guys understand that we are serious,'
Clyburn later said of the reception he received, but he
acknowledged that the challenge is to find the 'sweet spot'
where revenues can be accepted as part of the mix together
with reductions.

Education investments remain crucial, he said. And with other
nations like China and India graduating more engineers every
year, Clyburn said that, too, is a 'deficit in our populace
and the ability of our young people to succeed.' 

(c) 2011 Politico

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