States Could Lose $214 Billion Under Bush Budget

By: - February 23, 2005 12:00 am

State and local governments could lose $71 billion in federal grants over the next five years for education, housing, transportation and other domestic programs if Congress approves President Bush’s proposed 2006 budget, a new study estimates.

Hardest-hit would be large, populous states that draw the lion’s share of federal grants. California could lose up to $10 billion over the next five years under the Bush plan, New York — $6 billion, Texas — $4 billion, and Florida and Pennsylvania $3 billion each, according to state-by-state projections issued Feb. 22 by the Center on Budget and Policy Priorities (CBPP), a Washington, D.C., group that focuses on policies that affect the poor.

States would forfeit another $143 billion in federal funds for veterans’ health care, parks, research, law enforcement and other programs under the president’s budget package, the center said.

The president’s budget proposal, unveiled Feb. 7, lays out his spending priorities for fiscal 2006, which begins Oct. 1. Under Bush’s plan, most federal agencies and programs would be scaled back except for defense and homeland security in a bid to plug this fiscal year’s estimated $427 billion deficit brought on by U.S. spending for wars in Iraq and Afghanistan and tax cuts. The Republican-controlled Congress will have final say on how the federal government spends taxpayers’ money.

Robert Greenstein, executive director of the center, said the administration is proposing “the deepest cuts in recent memory” affecting domestic programs, noting that the president wants to “lock in” the cuts by passing a law capping federal spendng at the lower levels for each of the next five years.

Sharon Parrott, director of welfare reform and income support at the center and the report’s lead author, said, “The pain in the budget comes mostly after 2006, with the cuts growing deeper with each passing year.” She added that states would have “enormous problems backfilling” the cuts. To cope with the large drops in federal funding, she predicted that states and localities would have to choose between reducing services markedly and raising taxes.

Conservative groups, however, laud Bush’s budget-cutting plan. The Heritage Foundation disputed any notion that the administration is trying to reduce the budget deficit on the backs of the poor. “The president’s budget does not disproportionately single out these [anti-poverty] programs, which will continue to have sufficient funds to carry out their missions,” the Heritage’s Brian M. Riedl wrote in a recent memo. Duane Parde, executive director of the American Legislative Exchange Council, made up of conservative state lawmakers, said recently, “The president’s proposed budget does not reduce spending at the expense of states.” Parde called the president’s budget “a positive first step.”

The CBPP report includes state-by-state estimates of the president’s proposed budget cuts through 2010 in a variety of areas, including elementary and secondary education, children and family services and low-income energy assistance programs.

The center’s numbers are based on data the administration provided to Congress. The center said the projections are rough because the administration did not clearly lay out which programs would be cut and by how much for each of the next five years.

The center’s state-by-state figures are based on the assumption that each state would receive the same percentage of a program’s funding in 2006-2010 as the percentage that the state gets in 2005. So for example, if a state now gets 5 percent of the funding for a program, the study assumes that the state would bear 5 percent of a cut if the program’s funding level were reduced.

The center looked at social programs outside of “entitlement” programs such as Medicaid, the health care program for the poor and disabled that states and the federal government jointly sponsor.

Here’s a sampling of how the president’s budget might affect some states over the next five years:

  • K-12 education funding would be cut by $11.5 billion over 2006-2010, including cuts in California (.2 billion), Illinois ( million) and Ohio ( million). Vocational and adult education would be reduced in Texas ( million), New York ( million), Pennsylvania ( million) and Michigan ( million).
  • Some 660,000 poor women and children face the possibility of losing vouchers for food and baby formula because of a proposed $657 million cut to the program, including cuts in New York (.8 million), Georgia (.4 million), North Carolina ( million) and Michigan (.7 million).
  • Some 350,000 poor families might find themselves without help paying their winter heating bills because of a $165 million proposed cut in federal funds. Among the hardest hit would be: Pennsylvania (losing $11.3 million), Illinois (.6 million), Michigan ( million) and Massachusetts (.9 million).
  • More than 370,000 poor, elderly and disabled could lose rental assistance, including 52,900 in California, 25,000 in Texas, 15,900 in Illinois and 11,500 in New Jersey.

    Federal grants for states and localities for environmental protection and natural resource programs, including funding for national parks, would be cut $27 billion over 2006-2010. The reduction in funding would reach 23 percent in 2010, the center estimated.

    The report was one of several that the center released in the past week scrutinizing the president’s budget package. A separate CBPP report issued Feb. 18 examined the president’s proposal to trim $45 billion in federal funding for Medicaid. Another report looked at the local effects of proposed cuts to housing vouchers.

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