Updated May 14, 2012
On Thursday, May 10, the House of Representatives narrowly passed H.R. 5652, the bill to replace the really bad cuts to the safety net with even worse ones. The minimum number of votes to allow passage in the House is 218, and this vote was 218 – 119 (with 13 members not voting and one voting “present”). There is little likelihood that the bill will be acted on in the Senate, although the Ryan Budget on which it is based will be allowed to come to the floor. The Senate generally has a longer, more reasoned view than we are currently seeing in the House.
Economists speaking at a Brookings Institution forum (May 3, 2012) echoed what most economists have been saying since early in the recession. The U.S. economy cannot become stable without additional revenue coming into the federal coffers. This is due to the prolonged, expensive war in Afghanistan and Iraq; the aging of the population, and to the temporary tax gifts provided in 2001 and 2003 (mostly to the wealthiest among us). As in a family, the government cannot provide for additional needs while reducing income.
In August 2011, in order to meet the challenge of approaching the debt limit, the House and the Senate agreed to raise the debt limit by $2.1 trillion, in stages. They also agreed to hold a vote on a balanced budget amendment to the Constitution of the United States (which failed in the Senate), and to set up a Joint Select Committee on Deficit Reduction. This committee was charged with savings which exceed the increase in the debt limit. The agreement was that if they were not successful, an automatic sequester (across the board cut) would be put into place, to become effective January 2013. They were not successful. Now, members of the House and the Senate, and the President in his Budget Request, are trying to find savings which would forestall sequestration.
The House and the Senate continue to determine ways to reduce the deficit, and to extend the approach of next meeting the debt limit – expected to be in December of this year. The Senate is taking an approach, through appropriations and with proposals for increasing revenue to provide enough savings to forestall the Sequestration, expected to go into effect on January 1, 2013. The approach of the House is to secure savings solely through reigning in spending (mostly of programs supporting those who are most vulnerable), while providing even more money for the military and further expanding tax expenditures benefitting the wealthy and corporations.
The House of Representatives has proposed an FY2013 budget which cuts spending by $19 billion below what was agreed to in the Budget Control Act. They are enacting this through appropriations based on reconciliation instructions to six committees: Agriculture, Energy and Commerce, Financial Services, Judiciary, Oversight and Government Reform, and Ways and Means.
Agriculture, Energy and Commerce, Financial Services and Ways and Means are committees which provide for most of the safety net programs.
Reconciliation calls for:
-elimination of “maintenance of Service” requirement, allowing states to deny eligibility or create difficult to meet requirement
-prohibit funding to states for establishing health insurance exchanges
-rescind funding for loans for Consumer Operated and Oriented Programs
-Social Service Block Grants (SSBG) elimina