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Thursday, February 16, 2006

The Deficit Lie

By Tim Dickinson

Vice President Dick Cheney was on a rare mission abroad, expressing his support for the millions left homeless by a massive earthquake in Pakistan, when he received a summons to return to Washington immediately. His vote was needed to break a tie on the Senate floor, where five Republicans had broken ranks to oppose the president's Deficit Reduction Act of 2005.

Racing halfway around the world on a trans-hemispheric red-eye, Cheney arrived on December 21st, just in time to cast the decisive vote. His "aye" gave Republicans a 51-50 victory on the budget cuts -- a measure that will saddle low-income college students with debt, cheat poor kids out of $8 billion in child support and deny medical care to as many as 100,000 people living in poverty.

In public, Republican budget hawks insisted that they made these "tough choices" to stem the "rising tide of red ink in Washington." But, in November, behind closed doors, House Ways and Means Chairman Bill Thomas confided to a group of lobbyists that the GOP slashed social programs for the poor by $40 billion to help pay for $90 billion in new tax cuts -- almost half of which will go to wealthy Americans with incomes in excess of $1 million. The net result of the Deficit Reduction Act will be a $50 billion increase in the deficit. In the bizarro world of President Bush's doublespeak bills, the new spending measure takes its place alongside the Clear Skies Act, which sought to increase air pollution, and the Healthy Forests Initiative, which opened America's woodlands to more clear-cutting. "If this is deficit reduction," says Bob McIntyre, director of the nonpartisan advocacy group Citizens for Tax Justice, "then up is down, down is up and George Orwell is president."

It wasn't easy for Republicans to get the measure through Congress. The final bill was hammered out in a closed-door, GOP-only session. Then -- when the spending plan was finally released to Democrats and the media after midnight on Sunday, December 18th -- House Speaker Dennis Hastert invoked "martial law" in the chamber, forcing representatives to pull an all-nighter and vote on the 774-page act after only forty minutes of debate. "Here you have one of the most consequential pieces of domestic legislation in years, with profound effects on millions of low-income Americans, and members of Congress were required to vote on it without even having a chance to read it," says Robert Greenstein, executive director of the Center on Budget and Policy Priorities.

In the Senate, the measure seemed headed for defeat when a handful of moderate Republicans refused to support the cuts, which GOP Sen. Susan Collins of Maine blasted as "draconian." Majority Leader Bill Frist was forced to give Sen. Norm Coleman of Minnesota a $30 million subsidy for his state's sugar-beet industry, essentially bribing him to back the bill. "They have no shame," Minority Leader Harry Reid tells Rolling Stone. "These cuts are simply un-American."

Sen. Kent Conrad, the ranking Democrat on the Senate Budget Committee, decried the dearth of public scrutiny for a bill "written behind closed doors, filed in the dead of night and voted on at the crack of dawn." But Rep. Dave Obey, ranking Democrat of the House Appropriations Committee, isn't angry with his Republican colleagues for operating in the dark. "I don't blame them," he says. "If I put together a bill like this, I'd do it with the lights out too."

The extent of the budget cuts caught even veteran Democrats off guard. "In all my time in the Senate," said Sen. Jay Rockefeller of West Virginia, "I cannot remember a time when we have considered such drastic cuts to safety-net programs that threaten to devastate working families." Consider who will pay the price for the Republican budget crunch:

College Students Nearly a third of the cuts -- $12.7 billion -- affect student-loan programs. And a full seventy percent of those cuts, the largest in history, fall squarely on the backs of students and their parents. Rather than slashing aid directly, Congress simply raised the interest on student loans, replacing a lower variable rate with a higher fixed rate. As a result, students leaving college with $17,500 in loans will have to cough up an additional $5,800 to pay off their debt. The change will increase the cost of higher education for American families by $8 billion -- at a time when public universities have already raised their prices by forty percent.

"The Republican Congress is paying for tax cuts for the wealthy, making student loans more expensive for middle- and low-income families," says House Minority Leader Nancy Pelosi. Adds Rep. Obey, "They think they can pretty much do whatever they want to students, because they think that students will march but they won't vote."

Single Moms The bill cuts nearly $5 billion in funding to state agencies responsible for tracking down deadbeat dads and collecting child-support payments. With fewer state and local officials available to enforce the law, an estimated $8 billion in payments will go uncollected -- money that single mothers rely on to feed and clothe their kids. "Congress should be fighting for the rights and well-being of children who depend on child-support payments, not against them," says Maine Sen. Olympia Snowe, a Republican who opposed the measure. "I couldn't, in good conscience, vote for any bill that would cut this funding."

The Sick Medicaid has traditionally provided health coverage to the nation's poorest citizens -- including some 28 million children -- for as little as three dollars. But the GOP bill hikes premiums and co-payments, forcing low-income patients to pay as much as $100 to visit a doctor or obtain an asthma inhaler. According to the Congressional Budget Office, the added costs will prevent many patients from seeking treatment or, in the case of new monthly premiums, even enrolling in Medicaid. That's just what Republicans are counting on: Eighty percent of the projected $16 billion savings in Medicaid will result from a decline in poor people seeking medical care.

Republicans insist that the co-payments are necessary to "reduce the rate of growth of government." But the GOP showed no interest in cutting federal subsidies to Big Pharma. Lawmakers eliminated provisions in the original Senate bill that would have required pharmaceutical companies to discount the drugs they sell through Medicaid and ended a slush fund for insurers that a nonpartisan advisory commission declared a complete waste of money. The two measures would have produced a combined savings of $20.5 billion -- making the cuts to Medicaid unnecessary. "The priorities of the majority party consistently lie with the powerful special interests and big drug companies," declared Sen. Patrick Leahy of Vermont. "The Republican leadership has had to choose between supporting the American people or wealthy corporate interests -- and they have sided with the corporate interests."

Foster Parents So much for family values -- the bill not only cuts $343 million from foster care, it specifically overturns a federal ruling that granted foster-care funds to low-income grandparents who take in their own grandchildren rather than sloughing them off on strangers. The cuts convinced Sen. Mike DeWine, a Republican from Ohio, to vote against the measure. "I felt that the bill hurt Ohioans who most need our assistance," he says, "whether it is poor children and seniors affected by cuts to Medicaid or families hurt by cuts in foster care."

The Working Poor Under tough new rules created by the bill, families on welfare will have to work longer hours to qualify for federal assistance. In two-parent families, both the mother and father must now find full-time jobs or job training. Meeting the requirement could cost states $8 billion -- but the bill provides no new funds, only fines as high as $100 million a year for states that fail to meet the new standard. To avoid the penalties, many states are expected to stop offering welfare to two-parent families -- providing a perverse incentive for working parents to split up to preserve their benefits. Even more troubling, the GOP budget slashes $11 billion in federal support for child care. By 2010, as many as 255,000 kids could be booted out of day care, forcing poor parents to choose between working or caring for their children.

As if this assault on the poor wasn't enough, Republicans also gutted another $3 billion from social programs in a separate bill on discretionary spending -- a measure that flew through Congress in such a pre-Christmas flurry as to make the Deficit Reduction Act seem well considered. The bill received so little public scrutiny that the Senate was even able to duck a traditional roll-call vote, leaving no record of which GOP senators voted to slash job training for the poor, cut funding for community colleges and kick as many as 25,000 kids out of Head Start.

Nor will the budget cuts do anything to reduce the deficit, which is projected to hit $365 billion. Thanks to tax cuts expected to be finalized early this year, most of the money will go directly into the pockets of the country's wealthiest citizens. Three-fourths of all Americans will not see a dime from the president's move to make permanent his cuts on dividend and capital-gains taxes -- while the nation's richest 1 percent will reap more than $25 billion. By 2010, thanks to Bush, America's millionaires will enjoy annual tax cuts of $130,000.

"I don't know of any religion practicing in America today that preaches from the pulpit that what one should do is take from the least among us to give to those who have the most," says Sen. Conrad. "But that's what this budget is about. It's so profoundly wrong."


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