by Erika Argersinger

8/4/2011

Debt Ceiling Deal Leaves Some Children’s Programs Vulnerable, Protects Medicaid and CHIP for now

On August 2, the President signed into a law a deal that would extend the nation’s debt limit and includes major spending cuts.  The big question is how will these cuts impact children? 

The deal passed by Congress extends the nation’s debt limit and includes spending cuts to be enacted in two stages:

·         Round One of cuts will be done through spending caps imposed on Fiscal Years 2012 – 2021.  The details of these spending cuts remain unclear – it outlines the level of cuts, but not the specific programs to be cut - however, the agreement would impose $1.2 trillion in cuts on discretionary spending over the next decade. That could translate to wide-ranging cuts affecting essential children’s programs, primarily education and housing programs. In fact, children’s programs represent about 20 percent of the non-defense discretionary spending in the federal budget.

·         Round Two of cuts will be done through recommendations put together by a newly created Super Committee that has to act by the end of 2011. The Super Committee must make another $1.5 trillion in budget cuts and “everything is on the table.”  This means it can achieve the $1.5 trillion in deficit reduction through spending cuts alone or through a combination of cuts and increased revenue.  The cuts can be to any or all programs – meaning critical children’s programs like education, child care, Medicaid and the Supplemental Nutrition Assistance Program (SNAP) will be on the table.  If the Super Committee or Congress fails to make these cuts themselves, automatic cuts would be triggered, forcing cuts equally across defense and non-defense spending.  Essential programs, such as Medicaid, the Children’s Health Insurance Program (CHIP), Supplemental Security Income (SSI), and SNAP would be exempt from these automatic cuts, but  other critically important children’s programs will be left all the more vulnerable.

So while the immediate crisis of extending the debt limit has been addressed, many details of how Congress will achieve deficit reduction are still up in the air.  Child advocates must stay on alert to ensure that deficit reduction is not done on the backs of our children.  

Our members of Congress are on recess now, but when they head back to Washington in September we need to urge them to make jobs and the economy our top priority.  A growing economy would reduce the federal deficit faster than the austerity measures being discussed.  We also know that the most effective way to reduce federal spending on programs like Medicaid and SNAP (food stamps) is to reduce poverty in America.   Contact Representatives Bass and Guinta and Senators Ayotte and Shaheen and urge them to begin the critically important conversation about the economic crisis that includes jobs, child poverty, hunger and homelessness. 

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The House is currently considering a bill to provide funds for fiscal year 2011.  Even though the fiscal year began in October 2010, Congress did not pass a budget last year and instead the federal government has been operating under a continuing resolution that expires on March 4.  The bill the House is considering proposes to cut non-security spending by $64 billion below current levels in the next seven months – meaning new cuts to New Hampshire and its communities imposed midway through the fiscal year.  These cuts would impact low-income families and children.  Child-focused programs losing significant federal aid include:

• Head Start - $1 billion, or a 15 percent cut, and Child Care Development Block Grant - $39 million cut.  Together, this would result in more than 350,000 children losing access to early learning across the country;
• FEMA Emergency Food and Shelter Program - $100 million, or a 50 percent cut;
• Title I (K-12 education for low-income students) - $693.5 million cut, and IDEA (special education) grants to states (nearly $560 million cut)
• Community Health Centers - $1 billion cut;
• Nutrition Assistance for Women, Infants and Children (WIC) - $1 billion cut.

 Contact Representatives Bass and Guinta and tell them that investments in children are important to you, and are critical to our future workforce and economy.  The Children’s Alliance is also talking to our congressional delegation about critical investments in kids.  We sent a letter to our NH delegation asking them to make children and families a priority as they consider budget and deficit reduction proposals.  Click here  to see the guiding principles we asked them to adhere to.