GOP yanks plan for spending cuts; opponents say proposal would hurt poor

Author: William E. Gibson

Published: November 11, 2005

While preparing to cut taxes primarily for the well-to-do, leaders of the U.S. House are trying to enact budget cuts that would pinch thousands of Florida families hovering near the poverty line, partly to offset the huge costs of disaster aid.

Republican backers say they must trim nationwide entitlement programs to check deficit spending, while cutting taxes to stimulate the economy.

The proposed cutbacks have sparked an outcry from most Democrats, some moderate Republicans and the working poor around the country, who accuse congressional leaders of trying to take from the poor to give to the rich.

"Those cuts will hurt kids and old people," said Judy Austin, a public housing resident in Fort Lauderdale who lost her housekeeping job in the wake of Hurricane Wilma. "The elderly don't have anybody to look after them, and now the government won't either."

The widespread opposition forced House leaders to yank the bill from the floor on Thursday while they tried to assuage moderate Republicans and round up enough votes to ensure the bill's passage. It will likely return to the floor next week, perhaps in different form.

Pressure from a similar combination of Democrats and moderate Republicans forced the bill's backers on Wednesday evening to remove controversial provisions that would have opened up much of the eastern Gulf of Mexico and the Arctic National Wildlife Refuge to oil and gas drilling.

The cutbacks, if enacted, would block thousands of families, including many legal immigrants, from receiving food stamps and allow states to impose premiums and co-payments on Medicaid patients. About 40,000 children nationwide would lose free or reduced-price school meals.

Eligibility for child-care assistance for working parents would be tightened. And federal funding to enforce collection child support would be slashed.

Since the burdens of disaster assistance have been used to justify budget cuts, some South Florida members of Congress found themselves in the conflicted role of trying to help their storm-ravaged region without, in effect, taking money away from social programs that many hurricane victims depend upon.

"Instead of trying to combat poverty, provide shelter to the homeless or medical care to the infirm, the Republican leadership of the U.S. Congress will again pay for the tax cuts to the wealthiest among us on the backs of the least among us," said Rep. Alcee Hastings, D-Miramar.

In all, the House budget bill would cut government spending by about $54 billion over five years. The Senate-passed version of the budget bill would save $35 billion but put less pressure on programs for low-income families.

House passage would set up a conference between members of each chamber to settle on a final compromise bill. It also would pave the way for debate next week on a package of tax cuts that would save taxpayers roughly $70 billion over five years.

The tax package includes extension of tax breaks on capital gains and stock dividends. According to the Tax Policy Center, 53 percent of the benefits from the capital gains and dividend provisions benefit households with incomes of more than $1 million, some 0.2 percent of American households.

Many Republicans contend that a combination of budget cuts and tax cuts would help check runaway spending, reform outmoded social programs, encourage investment and create jobs.

"Some of these decisions are tough," Rep. Lincoln Diaz-Balart, R-Miami, acknowledged in an interview. "But unless we make necessary reforms now, we would be facing a European-style welfare state. Those economies do not produce jobs, and people are not investing."

To soften the blow on at least one key group in South Florida, Diaz-Balart negotiated with House leaders to ease proposed cutbacks on legal immigrants.

Current law provides food stamps to immigrants who meet the usual income limits and who have been in this country for at least five years. The House bill would extend the requirement to seven years -- a change that would disqualify an estimated 70,000 recipients nationwide, including roughly 10,000 in Florida.

The late change negotiated by Diaz-Balart would make an exception for legal immigrants who are 60 years or older, are current food stamp recipients and apply for U.S. citizenship before this bill becomes law.

Defenders say these changes would have a marginal impact without pinching the truly needy. Rep. Mario Diaz-Balart, Lincoln's brother, accused opponents on Thursday of sounding false alarms.

"They will, like Chicken Little, claim that, `The sky is falling, the sky is falling!'" said Diaz-Balart, R-Miami. "The reason they will not support it is that tax increases and irresponsible spending are nowhere to be found in this bill."

Critics say even slight changes in benefits would seriously hurt the working poor -- those who live on the edge of poverty and may be discouraged from seeking health care or child care.

Many children simply would no longer receive medical attention because their parents or grandparents could not pay deductibles or co-payments for Medicaid, said Tana Ebbole, executive director of the Children's Services Council in Palm Beach County.

"If you are a family of four in Palm Beach County living on $14,000 to $20,000 a year, how do you live if you can't get food stamps?" she said. "How do you live if you have a Medicaid deductible?"

Money for health and dental care is tight in Pat Dixon's family. The West Palm Beach grandmother is putting off getting a wisdom tooth treated to make sure she keeps a little money for emergencies involving her three grandchildren.

"It would come out of my pocket, and I barely can afford my own health care," Dixon said.

The cutbacks pending in Congress would not directly offset the costs for disaster aid and reconstruction, which mounted to $62 billion in the wake of Hurricane Katrina. Budget-conscious Republicans, eager to preserve tax cuts while whacking back the federal deficit, had proposed cutting domestic programs even before Katrina.

The disaster costs nevertheless inspired deeper cutbacks to social programs, even as the nation became newly aware of pervasive poverty in the Mississippi Delta and elsewhere.

Hurricane Wilma then brought new demands for aid, as well as renewed appreciation in Florida for the social safety net.

The emergency "Food for Florida" food stamps passed out this week would not be affected by the legislation in Congress. The emergency program did, however, demonstrate to many middle-class Floridians the importance of federal help for the needy.

While leaving an emergency food-stamp distribution site in Delray Beach, Juanita Morales, a cashier who was forced out of her home by the storm, said she sympathized with those who rely on food stamps.

"If they really need it," she said, "I don't understand why they (Congress) would cut it back."