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The FY 2006 Federal Budget: Do the Numbers Reflect What We Value?

by The Washington Office of Public Policy

 

Contact: Office of Public Policy GBGM-Women's Division 100 Maryland Avenue, NE Room 530 Washington, DC 20002 (202)488-5660 Fax:(202) 488-5681
Contact:
Office of Public Policy
GBGM-Women's Division
100 Maryland Avenue, NE Room 530
Washington, DC 20002
(202)488-5660
Fax:(202) 488-5681

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February, 2005

As required by law, on February 7, 2005 President George Bush presented his $2.7 trillion fiscal year (FY) 2006 budget to Congress.  The President’s FY 2006 budget increases funding for defense and economic development programs while cutting funding for a wide array of government services, “the deepest domestic reductions proposed since the Reagan era.”1        

The President’s budget will cut funding to and also eliminate about 150 government programs.  Non-security funding, funding that does not include spending for defense, homeland security and other security related items, will be kept at the same level for the next five years.2  The President calls for $214 billion in cuts in domestic non-security related programs.3  According to the President’s proposal, the Education and the Housing and Urban Development Departments are the hardest hit by funding cuts.4  48 of the 150 programs that will be eliminated or see a reduction in funding are related to education.  The proposal includes a reduction in the Department of Education’s budget by a half a billion dollars, or 0.9 percent.  Some programs that will be eliminated include financing at the state level for the Safe and Drug-Free Schools program, vocational education programs and programs that help prepare disadvantaged students for college.5  In an effort to reorganize and consolidate the Department of Housing and Urban Development’s community development programs, the President proposes combining the programs and putting them under the jurisdiction of the Commerce Department.  In addition, the proposal cuts housing aid for the disabled by $118 million, almost half, and also cuts funding for housing assistance for those with AIDS and for Native Americans.6  Other areas that will see major reductions in funding and cuts in programs are Agriculture, Veterans Affairs, the Environmental Protection Agency, and Transportation.  The President proposes a new enrollment fee of $250 for health care for Veterans and an increase in their prescription co-payments from $7 to $15.7  The Environmental Protection Agency’s budget would be reduced by 5.6%; the largest cut would be in “federal payments to a joint state-federal fund that underwrites projects to improve water quality.”8  The proposal also reduces 8.4% from the Low-Income Home Energy Assistance Program, which helps low-income people to pay their heating bills.9 

 “The budget includes $138 billion in reductions in mandatory programs over the next 10 years, including cuts in Medicaid, the food stamp program, and child care assistance for low-income working families.  Figures in the budget show that child care assistance would be ended for 300,000 low-income children by 2009.  The food stamp cut would terminate food stamp aid for approximately 300,000 low-income people, most of whom are members of low-income working families with children.”10  The budget also proposes to cut Medicaid funding for states by $45 billion over the next 10 years, which may cause many states to cut their Medicaid programs.11

The programs highlighted above are only a few of the many programs that will be eliminated or will see a reduction in funding in the President’s budget proposal.   According to the Overview of the President’s 2006 Budget, from the White House website, these reductions would cut the projected $427 billion budget deficit in half by 2009.12  Although the President proposes reducing domestic spending, the budget does not include funding requests for the war in Iraq and Afghanistan and does not include information on funding for Social Security.  “The budget projects the deficit falling from an all-time high of $427 billion this year to $390 billion next year, but does not count the warfare expenses it expects in 2006.  If the Administration continues to spend at current rates, it will need more than $37 billion for the conflicts in 2006, leaving the deficit undiminished.”13  The budget does not include an expected $80 billion supplemental spending request from the President for Iraq and Afghanistan, and does not include the cost of the President’ proposed Social Security reforms which could entail $664 billion spent over 10 years to create personal savingsaccounts.14  According to the Center on Budget and Policy Priorities, “key low-income programs would be hit even though these programs have contributed little to the return of the deficit, and since 2000, poverty has risen and the number of Americans without health insurance has climbed.”15

Background on the Federal Budget Process

The President’s budget proposal is the first step in the federal budget process.  The President’s budget is only a proposal.  It is Congress that will ultimately decide how the budget is appropriated.  The federal budget includes two major parts; discretionary spending, money spent through the annual appropriations bills, and mandatory spending, spending the federal government is obligated to make, such as Social Security, Medicaid and Medicare.  After receiving the budget from the President, the Budget Committees of the Senate and the House of Representatives create a Budget Resolution which lays down the framework within which Congress makes decisions on revenues, spending and other budget issues.  This resolution is sent to Congress for a vote.  This process must be completed by April 15. 

After the budget resolutions pass, the Appropriations Committees of both the House of Representatives and the Senate begin the process of deciding how much to give to government agencies for spending.  There are 13 areas to which the Appropriations Committees allocate funding.  These include:  Agriculture, Commerce, Defense, the District of Columbia, Energy and Water, Foreign Operations, Interior, Labor, Health and Human Services and Education, Legislative, Military Construction, Transportation, Treasury and Postal, Veterans Affairs, and Housing and Urban Development.  The Appropriations Committees must complete all of their work by June 10.  Once the Committees have decided on how to appropriate the budget, the spending bills are sent to the House of Representatives and the Senate for vote.  All additional work and votes on the spending bills must be completed by June 30.  Once a decision is made in Congress about the budget, the Congress presents the Appropriations Bills to the President for his signature or veto.  The fiscal year runs from October 1 to September 30. 

ACTION

Contact the House of Representatives and Senate Budget and Appropriations Committees and ask them to support budget allocations in areas that reflect the values expressed in the Social Principles.  Read the Book of Resolutions 2000 pp. 32-64.

Follow the budget process and continue to write to your Representatives and Senators and ask them to support domestic programs.  To learn more about the budget process, read our February 2003 Action Alert entitled “Federal Budget Process.”  You may obtain a copy by contacting your Conference Social Action Coordinator or by calling our office at (202) 488-5660.

1 Baker, Peter.  President Sends ’06 Budget to Congress.  The Washington Post. Feb. 8, 2005.

2 Bush’s 2006 Budget.  The Washington Post. The Federal Page. Feb. 8, 2005.

3 Horney, James, Robert Greenstein and Richard Kogan.  What the President’s Budget Shows About the Administration’s Priorities.  Center on Budget and Policy Priorities. Feb. 9. 2005.                                                                                          

4 DeBose, Brian.  Nonsecurity Programs Cut to Reduce Deficit.  The Washington Times. Feb. 8, 2005.

5 Stevenson, Richard W. President Offers Budget Proposal with Broad Cuts.  The New York Times. Feb. 8, 2005.

6 Faler, Brian.  Bush’s 2006 Budget.  The Washington Post. The Federal Page. Feb. 8, 2005.

7 DeBose, Brian.  Nonsecurity Programs Cut to Reduce Deficit.  The Washington Times. Feb. 8, 2005.

8 Stevenson, Richard W. President Offers Budget Proposal with Broad Cuts.  The New York Times. Feb. 8, 2005.

9 Pear, Robert.  Subject to Bush’s Knife: Aid for Food and Housing. The New York Times. Feb. 8, 2005.

10 Horney, James, Robert Greenstein and Richard Kogan.  What the President’s Budget Shows About the Administration’s Priorities.  Center on Budget and Policy Priorities. Feb. 9. 2005.

11 Ibid.

12 The White House Website.  Overview of the President’s 2006 Budget.  www.whitehouse.gov

13 Baker, Peter.  President Sends ’06 Budget to Congress.  The Washington Post. Feb. 8, 2005.

14 Sammon, Bill.  Bush Offers Budget that ‘Sets Priorities,’ Proposes shaving deficit, nondefense spending.  The Washington Times. Feb. 8, 2005.

15 Greenstein, Robert, James Horney and Isaac Shapiro.  Assessing President Bush’s New Budget Proposal. Center on Budget and Policy Priorities. Feb 14, 2005.

 


Date posted: Mar 03, 2005