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Letter to Senators opposing the Deficit Reduction and Budget Reconciliation bill (S. 1932)January 30, 2006 Dear Representative: On behalf of the 1.4 million members of the American Federation of State, County and Municipal Employees (AFSCME), I urge you to oppose S. 1932, the Deficit Reduction Act that would make almost $40 billion in cuts to vital services including Medicaid, SSI, foster care, child care, child support enforcement, and student loans. This deeply flawed bill, passed in the middle of the night before members had time to read the voluminous text, also includes harmful and unrealistic changes to the Temporary Assistance for Needy Families (TANF) program which the Congressional Budget Office (CBO) estimates will cost states $8.4 billion to implement over the next five years. These enormous federal cuts and costly mandates on the states are the result of a corrupt system that allowed back-room deals throughout, most egregiously between the lead conference negotiators and private HMOs to lower their payments by $22 billion over the next decade as compared with the Senate's budget bill. Moreover, cuts to programs that assist low- and middle-income Americans will not reduce the deficit and instead are a pretext to partially pay for the up to $100 billion in reckless tax cuts that are expected this year, primarily benefiting the wealthiest of Americans. The initial version of the 774-page conference report came to this chamber in the middle of the night. Members were given only a few hours to read it and to understand the consequences of cuts that affect all of your constituents. This was humanly impossible. Additionally, information has recently come to light that lead negotiators did the health insurance industry's bidding during the conference negotiations for the budget bill. According to the CBO, instead of saving $26 billion by changing the formula for private HMOs participating in Medicare as contained in the Senate bill, the conference bill eliminated all but $4 billion of the projected savings. This and other back-room, lobbying-induced changes to the House- and Senate-passed bills were made outside of the public's view, and often even without the presence of members of the minority. The scandalous influence of corporate lobbyists on our legislative process has led to a budget bill that protects special interests at the expense of the average American. AFSCME strongly opposes the one-sided sacrifices that S. 1932 inflicts on children, families, students, the elderly and disabled while Congress is poised to give up to $100 billion in tax breaks to corporations and wealthy individuals. Medicaid beneficiaries face cuts of nearly $5 billion: After lobbyists for prescription drug and health insurance companies protected their excessive profits, the conferees looked to savings from the elderly, poor and disabled who rely on the Medicaid program for their medical care. The bill gives states unprecedented authority to charge premiums and co-payments to Medicaid beneficiaries. According to the CBO, approximately 13 million low-income people would be subject to new or higher co-payments for medical services. Additionally, the CBO projects that tens of thousands of beneficiaries would not apply for Medicaid, leave the program or become ineligible due to nonpayment of increased premiums. About 60 percent of those losing coverage would be children. In fact, the CBO report projects that about 80 percent of the "savings" from higher premiums and co-payments would be due to decreased use of medical care by the poor, elderly and disabled. Child Support Enforcement cuts will cost families at least $8.4 billion in uncollected child support: The budget bill's $4.9 billion in federal funding cuts to child support enforcement will result in almost double that amount, $8.4 billion, in uncollected child support for children over the next 10 years, according to recent CBO estimates. The cuts could be even deeper if states do not use their own funds to replace at least half of the federal spending reduction as assumed by the CBO. If states do not replace these funds, the Center on Law and Social Policy estimates that children will lose $17 billion in uncollected support over the next 10 years. These cuts to child support enforcement threaten a decade of progress where states have doubled their child support collection rates, helping millions of families move toward self-sufficiency. TANF work requirements increased while child care funding lags far behind: S. 1932 imposes very expensive and unnecessary new work requirements on all states, most of which are continuing to do an exemplary job moving welfare recipients into wage-paying jobs. The CBO estimates it will cost states $8.4 billion to substantially increase the minimum number of parents who will be required to participate in welfare-to-work programs. The bill's paltry $1 billion over five years in child care funding falls $11.5 billion short of the amount that CBO has estimated states will need to meet the new work requirements and ensure that child care funding keeps pace with inflation. As a result of this inadequate funding, an estimated 330,000 children in low-income working families would lose child care assistance in 2010 as compared to 2004 as states shift resources away from child care subsidies for these families to help meet the costs of the new work requirements. In addition, the bill sharply restricts the flexibility states now have to set policies in their state-funded cash assistance programs. Many states have placed their two-parent cash assistance families into these programs, so these new requirements will have the perverse effect of discouraging marriage while at the same time adding "meet the rule" costs for states to avoid significant federal penalties. $12.7 billion in cuts to student aid: The budget bill retains enormous cuts to student loan programs, with 70 percent of the student aid cuts coming from the pockets of students and their parents. This represents the largest reduction to student aid in our country's history. Again, back-room deals were cut with banking industry lobbyists to ensure that students and parents would have to pay higher-than-market interest rates, and fees for Direct Loans were doubled, weakening the public loan system. Without a doubt, a much larger percentage than the current 39 percent of college students will graduate with unmanageable debt if this bill becomes law. In addition, AFSCME strongly opposes the bill's provision that would forgive federally-backed loans to private school teachers. $577 million cut for assistance to abused and neglected children: The reconciliation bill includes two cuts that will make it harder for states to provide federally-funded foster care benefits to grandparents or other family members who have stepped in to provide care for their relatives' children. The bill also restricts "targeted" case management and planning to arrange for appropriate medical, mental health, educational, and other services for these families in crisis. SSI recipients will have to wait up to a year to receive all the benefits they are owed: Poor individuals with disabilities who are owed more than three months of back benefits will now have to wait up to a year to receive their full benefits if this bill passes. Currently, these back benefits are given in single lump sum payments. Forcing beneficiaries to wait longer to collect what they are owed is a real hardship since their landlords, utility companies, and grocery stores will not wait for bills to be paid. Part of the $425 million in "savings" comes from the expectation that some seriously disabled people will die before they receive all the benefits they are owed — a true death tax. No matter how you voted on the budget reconciliation conference report in December, AFSCME urges you to use this unusual opportunity of a second vote to understand the real human suffering that will be caused by this budget bill, listen to your constituents, and search your own conscience. This bill does nothing to solve the problem of the ballooning federal deficit; to truly tackle that problem, Congress must reconsider the fiscally irresponsible tax cuts that will primarily benefit the wealthiest Americans. Instead, this bill will harm working families, children, students, the elderly and the disabled. This is not what our country stands for. AFSCME urges you to vote "NO" on final passage. Sincerely, Charles M. Loveless |
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