Budget Quiz Answers and Explanations

Jul 8, 2011


1. In 1995, the median wealth of white families was seven times the median wealth of black and Hispanic families. What is this ratio today?

a. 5 times
b. 13 times
c. 20 times
d. 2 times

Answer: 20 times.

According to a recently released study by the Pew Research Center, the median wealth of white families is 20 times the median wealth of black families and 18 times that of Hispanic families. Based on the latest government data, these wealth ratios are the largest recorded. Analysis found that the bursting of the housing market bubble in 2006 and the recession starting the following year had a disproportionately negative impact on minority groups in the United States. “As a result of these declines,” the study explained, “the typical black household had just $5,677 in wealth (assets minus debts) in 2009; the typical Hispanic household had $6,325 in wealth; and the typical white household had $113,149.”

How does this fit into the budget debate? FCNL believes the federal government should align its spending priorities so that the most vulnerable are protected. Assistance to low income people to make food, housing, health care, utilities and education more affordable are essential investments to improve productivity in the economy, reduce dependency on long-term social services, minimize delinquency and crime, and improve quality of life. Read about Executive Secretary Diane Randall’s appeal to Congress for a compassionate budget, what exactly that means to FCNL, and find out what’s happening now.

2. How much does the Military Appropriations bill passed by the House this week cut Pentagon spending over the next five years?

a.) 12 percent
b.) Zero
c.) 20 percent
d.) 17 percent

Answer: Zero.

Although House Budget Committee Chairman Paul Ryan includes $178 billion in his budget as “cuts” to the Pentagon, they aren’t really cuts. Instead, Chairman Ryan is slowing the growth of the Pentagon’s budget over the next several years and calling it “savings.”

Moreover, approximately $100 billion of the proposed savings would never even leave the Pentagon. Instead, the money saved by eliminating out-dated weapons systems would be reallocated within the department, reinvesting in personnel and other weapons. Some realistic cuts were proposed by reducing troop numbers and improving health care efficiency for retirees, but the majority of “savings” are actually speculation on uncontrollable future events and not real changes to how the department spends its money.

Cuts instead come from public investments, like education, infrastructure and housing. The budget includes almost two trillion in cuts over ten years to programs that promote economic mobility and opportunity, such as Head Start (free preschool for low-income children), food stamps, and financial assistance for heating and cooling costs. We cannot afford to force families to choose between refilling prescriptions and keeping the heat on. Times are hard for everybody, but if we cut spending in human needs programs today, future generations will only face exacerbated inequality. Read more on why we should cut the Pentagon and who’s saying it.

3. Up to how many low-income mothers, infants and young children will lose food assistance benefits under the cuts approved by the House Appropriations Committee last week?

a. 65,000
b. 100,000
c. 350,000
d. 1 million

Answer: 350,000

The Woman, Infant and Children nutrition program (WIC) was funded at just over $6 billion in the House Agriculture Appropriations bill, more than $650 million less than FY2011 funding levels. Depending on the cost of food in the next year, 200,000-350,000 low-income women and young children will lose nutrition assistance. The program, which provides food and nutrition counseling for 9 million pregnant and post partum mothers, infants and children under the age of five, already does not reach the total number of eligible beneficiaries.

While cutting deeply into WIC and other nutrition and housing assistance programs, the House Agriculture Appropriations bill maintains expensive farm subsides. Some of these subsidies go to small farms, but almost three quarters of them to go the wealthiest 10% of farms. There is never a time to let new mothers and young children go hungry, especially when there are many other places in the federal budgets where we can afford cuts, like Pentagon spending, corporate tax loopholes and generous farm subsidies.

4. The SNAP program (formerly known as food stamps) will be cut by approximately how much in the next 10 years under the Ryan budget?

a. 10 percent
b. 20 percent
c. 15 percent
d. 7 percent

Answer: 20 percent

The Ryan budget proposes cutting $127 billion in spending – almost 20 percent – for the SNAP (Supplemental Nutrition Assistance Program) over the next ten years by capping spending and leaving it to states to find “innovative approaches” to providing aid to those who need it. However, the very nature of SNAP means that the population affected by this cut would be overwhelmingly poor, with 86% of the households on the program living below the poverty line.

Very low income families with children (three quarters of SNAP participants are in families with children,) as well as seniors and people with disabilities (one third live in a household with an elderly or disabled member) are the people who depend on SNAP in order to eat, or to supplement their income in order to afford necessities like housing on a reliable basis. Cutting SNAP would have an immediate negative effect on this population and would very likely increase the number of Americans in poverty or deep poverty, thereby increasing the strain on emergency food providers and raising the risk of hunger among this vulnerable population.

See more about the proposed SNAP cuts.

5. How many million seniors and people with disabilities would be hurt by the GOP’s budget cuts to Medicaid?

a. Less than 8
b. 10
c. 12
d. More than 16

Answer: more than 16 million

The GOP budget includes a number of proposed cuts to the funding of Medicaid, including the latest proposals which would allow states to significantly reduce eligibility and enrollment in the program, and hurting people who have nowhere else to turn for the medical care that they need.

In addition to providing assistance to low income people, families, and children, Medicaid is a crucial service to seniors and people with disabilities- paying for things that Medicare does not cover, such as the cost of a nursing home or other long-term care facilities (an estimated 63.6% of seniors living in nursing homes rely on Medicaid as their primary payer).

Nationwide, 15.4% of all seniors and their loved ones depend on coverage from Medicaid. Among people with disabilities, that number is even higher: 44.6%, or almost 10 million. These are vulnerable Americans who depend on the Medicaid program to provide them with the care that they need every day, and whose health would be jeopardized by these cuts in funding.

Read more on the effects of Medicaid cuts on the elderly.

6. Under the House budget, how many people would lose access to job training and placement services?

a. 100,000
b. 500,000
c. 5 million
d. 8 milllion

Answer: 8 million

The House budget calls to terminate funding for the Workplace Investment Act, which distributes resources to programs that assist adults, youth and dislocated workers with training and placement. Some of these programs are extremely successful. Research shows that every dollar spent on a court-involved YouthBuild participant yields a return on investment of at least $10.80. YouthBuild is an education and community development program for low-income young people that helps them get their GED and teaches them jobs skills while building housing for homeless people and low-income families.

The Workplace Investment Act helps out-of-work people update their job skills before reentering the workforce. Especially those who have been out of work for a year or more, many are finding that extended unemployment is making their skill outdated or obsolete.

In a time when millions of people in the United States are unemployed or underemployed, job training and placement assistance programs are essential to help get families back on their feet. Cutting programs like YouthBuild that are proven effective is not the way to improve the economy, it only makes it harder for young low-income people and the unemployed to find opportunities for good jobs.

7. How many low-income children could attend preschool for one year with the $553 billion defense budget for fiscal year 2012?

a. 3 million
b. 73 million
c. 12 million
d. 20 million

Answer: 73 million

The proposed Department of Defense budget for fiscal year 2012, at $533 billion, is the biggest of all discretionary spending programs. This amount does not include funding for military operations in Iraq and Afghanistan, or nuclear weapons related activities through the Department of Energy, but does include funding for missile defense, shipbuilding, and military personnel. Compare this to the State Department, which has a proposed budget of around $32 billion.

Head Start is a long-standing government program that provides free early childhood education to low income toddlers. Every year, around 1 million youngsters participate, less than half of the number eligible. The total number of eligible children, however, is many, many times below 73 million. What this budget quiz question illustrates is that if we, as a country, decided to make free early childhood education a priority for every low-income child, we could make that happen.

Every child should have access to early childhood education. Investing in Head Start prepares students to learn for the rest of their lives, and improves cognitive, language and socio-emotional development. Defunding Head Start, on the other hand, could result in many much more costly consequences, such as dropping out of school, which can result in juvenile delinquency, less productivity in the workforce, and dependency on social services.

In a time when the country is debating how to best invest its resources, cutting a proven program that helps lift low-income families out of poverty and dependency on much more expensive government programs makes no sense. FCNL believes that programs that serve low-income people need to be protected, especially in this time of economy instability. We believe Congress can find other places that can be cut without closing classrooms for young children.

Find out more about the Head Start program.