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Kids Could Get the Short End of the Stick

Balanced Budget Amendments Will Cause Great Harm to Children’s Programs
This week, the House of Representatives voted against increasing the debt ceiling. This summer, the United States Treasury will reach the limit of what the law allows them to borrow. If this occurs, the country will not be able to pay back the bonds that the investors have purchased. The United States has never defaulted on its bonds, and the impact on the financial markets and the broader economy will be catastrophic if it does. Congress will eventually vote to increase the debt ceiling. Whatever else they agree to in order to pass will be the main issue in Washington DC this summer. The vote this week would have increased the ceiling and done nothing else, what some people call a “clean bill.” Some in Congress are demanding deep spending cuts in exchange for their vote to raise the ceiling. Others see this as an opportunity to try again to pass a Balanced Budget Amendment.

The balanced budget amendment proposals in the Congress are far more radical than the proposals that came within one vote of passing the Congress in the 1990s. They include caps on federal spending that would force drastic cuts in programs vital to women and families, but do nothing to restrain tax breaks for corporations and wealthy individuals. Some proposals are so extreme they would require supermajorities in both the House and Senate to raise taxes in any way – making tax breaks for the rich and corporate special interests virtually untouchable. At the same time, spending on health, education, and child safety programs would be cut far below the level they were when Ronald Reagan was President.

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Congressional Action Could Cost 14 Million Children Their Health Care Coverage
In May, Senator Orrin Hatch of Utah and Representative Phil Gingrey of Georgia introduced the “State Flexibility Act.” This bill proposes the repeal of a provision of the health reform law that requires states to maintain current eligibility and enrollment requirements for Medicaid and the Children’s Health Insurance Program (CHIP). Also known as the “Maintenance of Effort” (MOE) provision, its repeal would mean that as many as 14 million children currently covered by either Medicaid or CHIP could lose their coverage. The State Flexibility Act serves no other purpose than to give states permission to eliminate health coverage for vulnerable Americans, including low-income children, people with disabilities, and senior citizens. It would simply increase the number of uninsured citizens in our country.

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The George W. Bush Tax Breaks Celebrate a 10th Birthday
June 7th marks the 10th anniversary of the first series of tax breaks passed by George W. Bush. 10 years provides more than enough time to evaluate their effectiveness. The verdict is clear. The Bush-era tax breaks gave disproportionate benefits to those at the top of the income ladder and led to widening income inequality. The top 0.1% of earners (i.e., those making over $3 million) received an average tax cut of roughly $520,000 ($5 million+ over the decade), more than 450 times larger than the share received by an average middle-income family. Lower-income and working families saw very little of the benefits from the tax changes. The Bush economic expansion had the worst wage and salary growth and total compensation growth of any postwar economic expansion. Low income workers fared the worst.

At the same time, investments in many children’s programs declined over the last decade. For example, in 2001, the federal government invested $8,634 per four year old in Head Start (the spending total was adjusted to reflect inflation). In 2011, that investment declined to $7,824 per child. The Social Services Block Grant, a key program to help treat and protect abused children, declined by more than 20% in funding when adjusted for inflation.

US Action and other organizations are coming together on June 7th to hold events in cities and towns throughout the country to mark the 10th anniversary of the Bush tax cuts by demanding that Congress once again make millionaires and billionaires pay their fair share. No cuts to children’s programs should even be considered until these tax breaks are reversed.

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