Bush Budget - Deceptive and Dangerous for Women and Families

by Jan Erickson, Government Relations Director

February 18, 2005

George W. Bush proposed a $2.57 trillion budget Feb. 6 that deceives and endangers women and families. As described in the Washington Post, Feb. 7, Bush employs “smoke and mirrors” to deceive taxpayers by exaggerating expected revenues while minimizing the actual costs and long-term financial burdens. The National Organization for Women's analysis of the budget found the administration’s accounting procedures and lofty projections for deficit reduction to be nothing more than a fiscal sleight of hand.

In order to sell his budget to Democratic critics and the public, Bush claims that this plan will advance his goal of cutting the soaring federal deficit in half by 2009. Analysts point out that tax cuts adopted during his first term costing $1 trillion negate Bush's deficit reduction plans, and that cuts as steep as 16% in all discretionary programs will be required to halve the enormous deficit. In fact, as the Center on Budget and Policy Priorities note, the '06 administration budget increases the deficit over the next five years, from $1.364 trillion currently to $1.393 trillion. And, extending these earlier tax cuts for ten more years would cost another $2.1 trillion!

Billowing Budget Smoke

The budget resolution withholds vital information about the funding impact on specific discretionary programs beyond 2006—blowing smoke at millions of families, employees and contractors who are worried about their economic futures. (Discretionary programs are all non-entitlement or mandatory spending programs like Social Security and Medicare, excepting defense, homeland security and international affairs.)

Bush and other right-wing politicians have learned the Enron lesson: You can fool a lot of people most of the time. The budget plan, if followed, would take the country much closer to the administration's long-range objective of slashing social spending to the bare bones, while escalating defense and security spending and enshrining costly tax breaks for large corporations and wealthy individuals. Republicans want to adopt a new rule that would require Congress to offset any increases in social spending with cuts to other domestic programs; however, tax cut initiatives would not have to face the same constraints (i.e., cuts in taxes would not have to be offset by budget cuts).

Taken to the Cleaners

In short, the nation's lower-income and middle-class taxpayers are being taken to the cleaners. For their disproportionately heavier tax burden, low- and middle-income families are receiving less and less from the government programs adopted over the past 60 years to support higher education, vocational training, unemployment assistance, workplace safety, transportation, housing assistance, health care, environmental protection, public safety and retirement security. Our shared national vision of a prosperous future for coming generations is fast disappearing—thanks to the wrong-headed, market-dominated economic philosophy of right-wing business and political leaders who are making our policies.

Revenues to the federal government are now lower, as a share of the economy, than they have ever been for the period 1960 to 2000. Yet the Bush plan proposes making existing tax cuts permanent, while adding new tax cuts costing more than $1.4 trillion over ten years that primarily benefit the top 1% of earners—those earning $360,000 and above.

Here are more appalling facts and figures that demonstrate the Bush administration's sleight-of-hand in the 2006 budget:

• Grants to state and local governments would decline by $10.7 billion or 4.5% (not including the Medicaid program), and they'll have to make it up by increasing your local and state taxes.
• Some $214 billion in reductions are proposed over five years for all domestic spending except for defense and homeland security.
• Cuts to mandatory spending such as Medicare and Social Security that would total $137 billion over ten years are called for.
• Costs for Iraq and Afghanistan are not included, nor are any additional revenue sources identified to fund the massive cost of private accounts under Social Security, if that should be adopted.
• Excludes the $700 billion cost incurred by the budget resolution's failure to extend relief from the Alternative Minimum Tax, which relief expires this year.

Health Care: Some 51 million people receive health care under the Medicaid program, including millions of low income seniors. Women make up over 70 percent of all adult Medicaid recipients, relying on the program for their basic health care coverage including reproductive health care services and nursing home care. The Bush administration proposes to reduce Medicaid funding by $45 billion over 10 years—this for a program that is already vastly under-funded. The administration would put the burden of funding on the states rather than the federal government, even though states are currently struggling to meet the federal matching requirement and at least 24 states face 2006 budget deficits totalling $35 billion. Even worse are threats by Senate Republican leadership to "overhaul" Medicaid, suggesting that the program may be block-granted to the states and the amounts capped.

Children: The Bush plan puts millions of poor children at risk. Under the proposed budget, 25,000 fewer children would be able to participate in the Head Start program, 300,000 working-poor parents will lose child care for their children, and a guaranteed protection for those children who are abused and neglected would end—just to name a few consequences. With a portion of the $22.2 billion that would be given back to millionaires through some of the tax cuts, 3.1 million uninsured children would be able to receive insurance, according to the Children's Defense Fund. The President's budget would also freeze child care funding for 2006.

Food and Housing: Food stamp benefits would be cut by $1.1 billion over 10 years, thus eliminating 200,000 to 300,000 people, including children, from the program. Housing for the disabled would be cut nearly in half and housing for Native Americans and people with AIDS would also be cut. The acclaimed HOPE VI program, which helps revitalize decrepit public housing, would be eliminated as well.

Education: Many education and training programs are cut, including $300 million from worker training programs, elimination of the Even Start literacy program and Early Learning Opportunities program and $2.2 billion in cuts to vocational and technical education. These programs help train women and girls for jobs in better-paying careers in fields such as construction, aviation, and computer technology. The Republican-backed No Child Left Behind education "reform" continues to be seriously under-funded, placing even more burden on states and local school districts. For at least the fourth year in a row, the administration's budget would completely eliminate the modest funding for the Women's Educational Equity Act, first enacted in 1974. Women's equality advocates will repeat efforts to restore its $3 million budget to help to eliminate the bias towards men and boys in education, giving more of an equal opportunity for women and girls in education.

FDA and Abstinence: $1.5 billion is proposed for the Food and Drug Administration, a $50 million increase above the FY2005 level. The FDA also estimates it will collect $305 million under the Prescription Drug User Fee Act, $21 million more than the FY2005 level, from pharmaceutical companies. While the FDA drags its feet for months on approving emergency contraception for over-the-counter sales, they accept millions from companies that want to expedite testing and hasty approval of drugs—some of which are later found to be deadly.

The administration would also increase funding for abstinence-only education programs by $39 million for a total of $193 million in FY2006. Abstinence education, which has been shown to have few effects in reducing unwanted pregnancy, will continue to receive increased funding, despite the fact that federal funds for Title X family planning programs are frozen at levels that have been inadequate for more than a decade. To make up for their failed pregnancy prevention programs, the administration has proposed $10 million for homes for unwed mothers.

The Budget and Our Future

In 2005, our nation is at a crossroads, faced with politicians who are deciding our economic future using a broken moral compass. Do we mortgage our children's future and straddle them with lifelong deficits, or do we ensure that everyone has the help and support they need for a better future?

We cannot pull the rug out from under millions of women families who rely on these supportive programs to help them thrive and survive. For struggling low-income women and their families, the Bush budget is another sad reminder that when it comes to numbers, they simply don't count. The president is determined to cut and freeze, constrict and consolidate, slash and burn many of the important public services and programs that are vital to their economic survival.

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