House Brings Harsh Vision Into Focus

On Thursday (May 10), the House voted along largely partisan lines¹ to cut deeply into human needs programs in order to avoid putting limits on Pentagon spending growth or ending some of the “temporary” tax cuts that have hung around since the last recession (2001 – 2003).

The legislation (H.R. 5652), known as the “Sequester Replacement Reconciliation Act,”² makes deep cuts in “entitlement” or “mandatory” spending, lowers the limit on discretionary spending by $19 billion, and preserves rapid growth in the military budget.

This bill would do four dangerous things:

1. Affirm an overall discretionary spending limit that is $19 billion lower than the Budget Control Act requires;
2. Remove the “firewall” between Pentagon spending and the rest of the discretionary budget;
3. Declare Pentagon spending off-limits for any sequester or across-the-board budget cuts, thereby requiring domestic discretionary and mandatory programs to absorb all of the cuts that would have been shared with the Pentagon budget, plus $19 billion more.
4. Slash specific mandatory programs – such as food assistance, social services, and Medicaid – by about $243 billion over 10 years.
   

The cuts would take $36 billion (over ten years) from food assistance, cutting aid to two million participants in the Supplemental Nutrition Assistance Program (SNAP) and the school lunch program, including about 300,000 children.

Who would be hurt by these cuts?

The bill would reduce support for the Medicaid program by nearly $23 billion over the next ten years, and terminate the Preventive and Public Health Fund established in the Affordable Care Act (a key to the Act’s strategy to keep health care costs down over the long run.)

The bill would eliminate the child tax credit for working, low-income immigrant families who pay taxes, but are not authorized to work in the U.S.. Many of the 3 million children affected by this change – which would markedly decrease family income for some very low-income families -- are U.S. citizens.

The largest cut -- $83 billion – would come from federal employees who will be required to pay a higher percentage of their wages into federal retirement accounts.

Who would be protected in the House reconciliation bill?

• High income individuals and corporations: Although reconciliation bills often increase taxes in order to meet deficit reduction targets, this bill would continue the tax preferences that disproportionately benefit the wealthiest U.S. households, and would preservet the loopholes that allow major corporations to avoid tax responsibility. In April, the House also approved an addition $46 billion in tax cuts to “small businesses” (with up to 500 employees).
• Wall Street: The bill would end the authority for federal regulators to close a bank that is in danger of bringing down the financial system, and would hobble the authority and effectiveness of the (currently) independent Consumer Financial Protection Bureau.
• Military contractors: The bill removes the “firewall” between Pentagon and other spending in the part of the Budget Control Act that calls for a sequester (automatic cuts), and then provides that no sequester will apply to military accounts. As a result, all cuts required under a sequester would have to come from the domestic side of the budget (including non-military international accounts.) Note: The sequester is not “replaced” – it is shifted to domestic programs.
  
  Since, in testimony before Congress, the representatives of the various Armed Services did not present the customary “wish lists” – needs that were left unmet due to budget constraints – it is reasonable to conclude that it is military contractors rather than the Pentagon that expect to benefit from additional Pentagon spending.
  
  (Indeed, in the wee hours of Thursday morning, the House Armed Services Committee authorized new Pentagon spending that would be $8 billion over the cap for military spending in 2013 – thus the need to take down the firewall between the two parts of the budget.)
  

This package, and the other ones that are being delivered with it, paint a harsh picture of a country in which our government would allow and encourage wasteful military spending; abandon responsibility for vulnerable families, children and elders; and accept an unconscionable gap between extreme wealth and poverty so deep that it is felt in the belly.

This is not a vision that the Friends Committee on National Legislation can share. The world we seek is free of war and preparations for war; the people and nations in that world honor and cares for every person, and cherish the earth on which we walk.

The bill passed the House by a vote of 218 to 199, with 16 Republicans and all Democrats voting NO.

The Senate is not likely even to take up this "reconciliation" measure -- it was meant to communicate clearly the vision of the House leadership in an election year. It has accomplished its goal.

Take Action: Find out what you can do to preserve cuts in Pentagon spending and stop this harsh vision from becoming reality.

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Notes:

1. Republican Votes Against H.R. 5652: Sixteen Republican House members broke ranks with party leadership to vote “no” on the package. At least half of them affirmed that the Pentagon budget needed to be cut, others cited concerns about how the domestic program cuts would affect their districts. The “no” votes on the Republican side of the aisle were: Amash (MI-3), Bartlett (MD -6), Bass (NH-2), Duncan (TN-2), Fitzpatrick (PA-8), Gibson (NY-20), Gohmert (TX -1), Herrera Beutler (WA-3), Johnson (IL-15), Jones (NC-3), Labrador (ID-1), LaTourette (OH-14), LoBiondo (NJ-2), Platts (PA-19), Whitfield (KY-1), and Wolf (VA-10). One Republican (Sensenbrenner) voted "present." All Democrats voted against the package.

2. What is a “Reconciliation” Bill?
A reconciliation bill is legislation that changes revenues (taxes), or changes spending on programs that do not go through the appropriations process. These programs are called “mandatory,” “entitlement” or “non-discretionary” programs. Actually Congress exercises a lot of discretion over them – they just go through a different process.

Veteran’s benefits, for example, are “entitlement” programs (or mandatory, or non-discretionary). If a person qualifies (e.g. a veteran who was injured during active duty), he or she receives the benefit (e.g. disability compensation.) If Congress wants to change how much that program costs, it can change the eligibility rules (e.g. a veteran would only qualify if the injury was sustained in combat), put some conditions on the benefit, (the compensation is available only if the veteran is participating in re-training program that would lead to employment), or reduce the amount of the benefit itself. (Note: none of these changes in veterans' programs are being considered -- this is just an example.)

How does Congress make those changes? A budget resolution includes “reconciliation instructions” addressed to various authorizing committees, telling them to raise a certain amount of revenue, or reduce spending by a certain amount. The authorizing committee then decides how to meet those instructions by reviewing the programs under its jurisdiction.

For example, the House Agriculture Committee was instructed to find some $30 billion in savings. It could have reduced some agricultural subsidies or cut back on the 100 percent crop insurance subsidy to reduce spending as instructed. Instead it chose to cut from food assistance programs for low income people.

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