July 13, 2006
Federal Budget: Senate Bill Would Cut Vital Programs
On June 15, 2006, Sen. Judd Gregg (R-NH), chairman of the Budget Committee, introduced the “Stop Over-Spending Act” (S. 3521), a group of budget process reforms with features that include attacks on entitlements, a line-item veto, and a sunset commission.
The Senate Budget Committee favorably reported out the bill on a party line vote. The bill has twenty-seven Republican co-sponsors. Senate Majority Leader Bill Frist (R-TN) has indicated an interest in bringing the bill before the full Senate either in its current form or considering various components of the bill separately.
Action Needed
Please contact your Senators and urge them to vote against S. 3521 and all of its components. You can modify a draft letter posted on our Web site. Alternatively, you can call your Senators through the Capitol Switchboard at 202-224-3121.
The Issue at Hand
S. 3521 seriously undermines federal entitlement and discretionary programs, providing opportunities to cut these programs through a sunset commission and a line-item veto. The sunset commission is an unelected body that would make recommendations to the Congress on eliminating or decreasing programs. These recommendations would be fast-tracked through Congress where members would have to vote the full recommendations up or down without any opportunity to filibuster.
The Line-Item Veto proposal cedes congressional power to the Executive Branch in a way that is unprecedented in our history. The bill would give the President up to one year after a bill is enacted to propose the cancellation of items in it. The Executive Branch could use this lengthy time to increase White House leverage and power rather than promote fiscal discipline. The President could hold up funding for programs he does not like for up to 90 days. The U.S. Congress would have to vote to reinstate such programs. The President could combine popular and unpopular programs in one veto package and the Congress would have to vote the whole veto up or down as presented using fast-track procedures.
By limiting discretionary spending to the amounts proposed in President Bush’s most recent budget, many important social service and health programs would cease to exist. Fewer children would have access to school lunch programs, fewer older adults would be able to interact with others through senior center programs, and families would lose vital assistance to heat their homes in the winter months.
Setting fixed deficit targets may sound like a fiscally sound policy, but it would result in across-the-board cuts in important programs such as Medicaid, Medicare, food stamps, student loans, Earned Income Tax Credit and veterans’ benefits. The needs will not diminish, and these cuts will shift costs to states that can little afford to pick up the slack. People will be left without the programs to which they are entitled.
The proposed Commission on Social Security, Medicare and Medicaid establishes new definitions of solvency for Medicare and Medicaid that are unrelated to how the programs are financed and could lead to large increases in the ranks of the uninsured and underinsured. Cost increases in medical care beyond the rate of inflation would be passed on to states and constituents.
The bill puts discipline on spending but not on tax cuts. Any legislation that would increase entitlement spending must be paid for with cuts to other entitlement programs or increases in revenue. The cost of tax cut legislation does not need to be offset. If Congress is to enact PAYGO rules, spending and revenue changes must be given equal scrutiny.
Thank you for your advocacy!
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