Tuesday, February 5, 2013

Danger! A Countdown to Calamity

John J. Drew, President/CEO, 
Action for Boston Community Development, Inc. 

On January 1, 2013, the U.S. Congress passed The American Taxpayer Relief Act of 2012, swerving to avoid the “fiscal cliff” at the last moment. Did you breathe a sigh of relief? If so, that was premature. In the next ninety days, Community Action—and many other federally-supported activities—face three more life-or-death challenges. We need to negotiate each one successfully to ensure that the country’s fragile recovery continues—and to build a real foundation for future prosperity.

There are three opportunities for budget-cutters to make critical choices— bad choices could be devastating not only for poor people, but for all Americans.

  1. First is the deadline for $110 billion in automatic budget cuts, or “sequestration,” which is coming up on February 28. (The “fiscal cliff” deal pushed this deadline back from the original date, January 2.)
  2. The second is the brewing battle on increasing the federal debt ceiling, the maximum dollar amount imposed by Congress on the spending and borrowing by the U.S. Treasury.
  3. The third is the need to vote on a so-called “continuing resolution” — allowing federal programs to keep spending money—before March 31, when the current funding runs out. You may remember that when Newt Gingrich was Speaker of the House, deadlock on that vote caused a government shutdown.

Each of these votes will be a fight to determine which federally-funded programs survive.

What we need right now is for grown-ups to get into a room and work out an agreement where Congress and the Administration will come up with carefully thought out solutions to be implemented over the coming years rather than make a quick fix of cuts, cuts, cuts that will cause mass chaos and suffering.

A Fight for America

And this fight is much bigger than just Community Action. Clearly we have to fight sequestration cuts leveled at CSBG, and that must be our first priority. But we can’t afford to gut education, when even now too many poor children are headed for failure by the third grade. We can’t afford to hamstring medical research, especially when epidemics of obesity, diabetes, and cardiovascular disease are disproportionately killing poor people and people of color. We need to insure that there will be government traffic controllers so that planes don’t bang into one another, food inspectors so that rotten meat doesn’t hit store shelves, doctors to combat the next flu epidemic, meteorologists to warn us about the next big storm, and border patrol agents to prevent illegal crossings.  We must continue—and expand—efforts to rebuild the national infrastructure, because the economy of the future depends on it.

These are all investments that get lumped into the 40% of federal spending called "discretionary". But the fact is that discretionary doesn’t mean "optional". These things affect everyone’s welfare—but when they are cut, poor people suffer most. And wholesale cuts in domestic discretionary spending are likely to send the country into another tailspin of recession. Those of us working in Community Action know that you can’t help communities rise out of poverty when the nation is in economic crisis. It is absolutely crucial that we don’t fall into the trap of pitting our interests against other domestic programs which represent the social compact that holds us together.

So what can we do? First, we need to stick together. Then, we have to take a serious look at how to manage the growth of Medicaid, Medicare, and Social Security. As difficult as this may be, there are steps we can take that will slow the rise in costs while preserving the safety net for the vulnerable. Without a fix to the present system, our young people won’t be able to count on adequate income for when they get old and many poor people who currently aren’t able to participate should be able to.  We also need to oppose any effort to exempt defense from the pain of budget cutting. And we need to keep revenue on the table in each of the three budget fights coming between now and April.

Above all, at a time when 12 million people are unemployed, 1 in 3 young workers are underemployed, and 1 in 4 children live in poverty, we need to raise our voices to say that any budget deal  should NOT increase poverty or exacerbate hardship for families struggling to make ends meet. Any budget plan must protect key programs that poor families depend on for housing, nutrition, heating their homes, obtaining quality child care, coping with aging issues and helping to meet basic needs during difficult times. And any budget deal must continue to invest in our shared future.

What Sequestration Means for America and Community Action

The automatic cuts, or "Sequestration", of $110 billion that was to take effect on January 2nd, were delayed for two months to when the federal government reaches its spending and borrowing limit ("Debt Ceiling"). House Republicans are trying to tie any increases in the debt ceiling to increased spending cuts. Half of the sequester amount is to come from military spending and the other from domestic spending, but there is an effort underway by the influential and powerful to increase defense budget spending by imposing more draconian cuts to domestic programs, such as Head Start, housing, WIC, education, workforce training, LIHEAP, and so much more.

For American citizens and especially the low-income children, families and seniors we serve, sequestration will mean pain…acute pain. The immediate, automatic cuts to this year’s federal budget means a cut of 8.2 percent to most domestic programs, but because these cuts must be squeezed into the last seven months of the fiscal year, it means over a 15 percent cut to our programs.

We’re not just talking about federal agencies having to reduce costs and buy fewer military tanks or reduce office staff. Compounded over ten years, an 8.2 percent cut per year translates into many, many millions worth of budget reductions.  This means that huge numbers of the less fortunate among us – the most vulnerable in society – will lose services and programs funded by federal grants.

The 15 percent sequestration cut means that the following CAP/investment programs providing vital services and opportunities to poor Americans will be decimated:

  • Head Start – At least 150,000 fewer poor children will receive comprehensive early childhood education services in Head Start, with major negative impact for the children and their families. Head Start provides low-income children with comprehensive educational, health and social services. Parents actively participate in the program, volunteering in classrooms, serving on boards and pursuing educational and career opportunities that benefit the entire family. Many Head Start children attend extended day and full-year programs that enable their parents to work and go to school. Research shows that Head Start children do better in school and life.
  • Fuel Assistance – Approximately 1,332,000 households will lose fuel assistance, including many seniors and families with small children, making them vulnerable to hypothermia, danger from space heaters and other unsafe heating methods and severely impacting their lives. Increased costs to taxpayers comes from families leaving freezing homes for shelters, fires from unsafe heating methods, hospitalizations, children living in cold homes doing poorly in school, and more.
  • Child Care – It is estimated that at least 150,000 low-income children will lose child care subsidies funded through the Child Care Development Block Grant. Without child care, parents will certainly lose their jobs and the affected families will be in danger of sliding into homelessness, food insecurity and other desperate outcomes resulting from loss of income. The end result will be loss of tax revenue and added costs to tax payers as once self-sufficient families must turn to government services.
  • Housing – 3,017,226 families will lose Section 8 Housing Choice Vouchers, sending them, at huge government expense, to overflowing shelters and motels, if the states are willing to house them.  If not, there will be Dickensian squalor.  "Section 8" of the Housing Act of 1937 authorizes the payment of rental housing assistance to private landlords on behalf of low-income households. It is a lifeline for millions of working poor families whose income is not high enough to pay the excessive market rents that exist in so many communities.
  • Women’s Health – Hundreds of thousands of low-income women will lose health maintenance and illness prevention services that keep them healthy and save tax payers’ money. Breast cancer screening, HIV testing and many other health measures will be lost to sequestration.
  • Interconnected problems – cuts to one program will cause loss of a host of essential services and opportunitiescausing an even more devastating "snowball" effect. For example, if a family loses its housing and ends up in a shelter far from their original home, parents may not be able to get to work and will lose their jobs, children will be placed in new schools disrupting their education, physical illness can be exacerbated and emotional damage is often acute. Loss of child care usually means parents lose their jobs with subsequent risk of homelessness and other harsh consequences.

In addition, the U.S. Congress over the next few months will have to address additional fiscal challenges, including resolving a federal budget which began last October 1st and expires on March 27th; threatened changes to entitlement programs of Social Security, Medicaid, and Medicare; and significant natural disaster funding for Hurricane Sandy.

Overall, the cumulative effect of these harsh cuts is that the future of the country will be in jeopardy. Investments in education, job training, research, and technology will be sacrificed leaving millions without the knowledge and skills to move up the ladder of economic opportunity and pursue the American dream. The safety net will be destroyed, diminishing the hope of the disadvantaged to improve their quality of lives.

People from across the country must come together to fight these cuts and convince Congress, the administration and the American public that deficit reduction cannot take place on the backs of the poor. First, it is inhumane. Second, it won’t work! Cutting programs that make it possible for people to hold jobs, earn a living, stay healthy and pay taxes will NOT reduce the deficit!