The federal government has been operating on stop-gap spending measures ever since Oct. 1 because the House and Senate could not agree on a budget for fiscal year 2003. Instead, Congress passed several “continuing resolutions” that extended 2002 spending levels to Jan. 11, 2003.
This means that the budget will be one of the first orders of business when Congress reconvenes in early January with plans calling for work on the 2003 budget to be completed before President Bush’s State of the Union address. It also means that with the Republicans now in control of both houses of Congress, the battle with be much more difficult.
We begin with the fact that the Bush budget imposed a $750.5 billion ceiling on discretionary spending – spending that must be approved by Congress – for fiscal year 2003. So far Congress has acted on only two of the 13 spending bills it must approve, eating up $365 billion in military spending while leaving $385 for domestic programs. At the same time, Bush proposes cutting funding for low-income programs by nearly 5 percent compared to 2002 levels, adding more misery to these households in the midst of an economic slump.
While the 2003 budget was put together at a time when big surpluses were giving way to sizable deficits, the 2002 budget was developed in a very different climate – one of apparent peace, prosperity, and projected surpluses so large that a rather massive tax cut was considered affordable. But there was a common thread in both: Each saw low-income programs cut by nearly 5 percent in real terms.
For bookkeeping purposes, the federal government maintains 36 “accounts” from which come the funds that provide services to families or individuals with low or moderate incomes. The administration’s 2003 budget would cut funding for 26 of these accounts – nearly three quarters of them – below their 2002 level adjusted in real terms. With the exception of spending for education, discretionary spending for programs affecting low-income families in Bush’s 2003 budget average 4.6 percent below the 2002 level, measured in real terms.
These cuts are particularly mean-spirited during a period where the Congressional Budget Office forecasts that the unemployment rate will not begin to decline much until the second half of calendar 2003, after some nine months of fiscal year 2003 have passed.
In recent weeks a new element has been added to the budget equation as the White House and congressional leaders on both sides of the aisle have been talking about a “stimulus” package. And once again we find Bush’s 2003 solution to be further tax cuts on corporations and the rich.
The fact that it is inconsistent to fashion dubious stimulus measures that may take months to implement, while imposing immediate cuts in services and benefits for low-income families and individuals doesn’t matter to Bush and his new economic team. Bush has been remarkably consistent in pursuing policies of cutting funding for programs affecting low-income families while implementing tax cuts for affluent investors that are both expensive and ill-designed to spur the economy.
But there are ways of lessening the pain, first of all by extending federally-funded unemployment benefits for nearly two million workers who were set to lose those benefits on Dec. 28.
This fight can be won. There is no guarantee that Bush will get his way on budget questions. Although they no longer control the Senate, Democrats still have the power of the filibuster where a stand by 41 senators can block passage of any legislation. The challenge is to generate the mass pressure that will give them the courage to make that stand.
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