Senator Kennedy: The Truth Behind Bush's Budget

SENATOR KENNEDY: THE TRUTH BEHIND BUSH'S BUDGET

"It's the most anti-family, anti-worker, anti-healthcare, anti-education budget in modern times, and it doesn't deserve to pass."

"Each of these Administration proposals demonstrates what we see so often -compassionate conservatism without an ounce of compassion."

"Again, the administration is playing politics with the defense budget by failing to include the cost of our operations in Iraq and Afghanistan. They need to level with the American people about the true costs of this war."

OUTLINE OF BUSH 2005 BUDGET

Worst of the Worst:

Health

The President says expanding coverage for the uninsured is a priority but he provides $20 billion less than he proposed last year. And his proposed expansion of Association Health Plans would actually mean higher premiums for 20 million currently insured workers. Proposes $25 billion in additional tax expenditures to encourage Health Savings Accounts, which help the healthy and wealthy at the expense of everyone else. President says he has $130 million for new "BioSense" bioterrism program while cutting $50 million out of core bioterrorism functions, such as Centers for Disease Control programs to strengthen state and local bioterrorism response capabilities and grants to hospitals to prepare for bioterror attacks. Minimal increase for NIH which will cut the number of new grants by at least 500. Cuts the state match for Medicaid administrative costs from 90% to 75% just as states are faced with mounting deficits and cutting eligibility.

Education

The President underfunds No Child Left Behind by $9.4 billion, leaving over 4.6 million children behind. Bush proposes to eliminate funding for 171,000 federal-state college grants (LEAP) and provides zero increase in the maximum Pell grant. Labor

The Administration claims to add $250 million for job training by community colleges, but does nothing to restore over $900 million in job training cuts they've proposed over the last three years.

Summary of Budget:

Education

Each year and by increasing amounts, the President walks away from his promise of public school reform and improvement. Today, he proposed to underfund his signature education initiative by $9.4 billion. Over 4.6 million children will be left behind. President Bush breaks his promise of better teachers, smaller classes, and after-school help next year to over half of those children. The President proudly announces an increase in Title I education funding, but seems to think people won't notice that he proposes $7 billion less than the amount promised in the No Child Left Behind Act. In his State of the Union speech, the President celebrated 33,000 new college grants, but today he proposes to cut more than 33,000 federally leveraged state college grants. In fact, for the families of more than 15 million college students, the President's higher education message is "borrow more to pay higher tuition." The Bush Administration helps banks more than students.

Labor

The economy is down 2.4 million jobs since President Bush took office. At the December rate of job growth - 1,000 jobs created - it would take 200 years to return to pre-recession job levels. Yet the President's job creation plan is more tax cuts for the wealthy and training for jobs that just aren't there. And the President's budget fails to extend unemployment benefits even though the Congressional Budget Office and the consensus of Blue Chip economists expect the unemployment rate to be 5.8 percent-higher than when the recession began, and higher than when Congress first enacted the unemployment insurance program in March 2001.

Ninety thousand workers a week are running out of unemployment benefits with no job in sight because the Bush economy is creating only one job for every three unemployed workers. Yet the Bush budget merely re-packages last year's failed Personal Reemployment Accounts into a pilot program. Workers need jobs, not untested, punitive programs.

As the Bush budget allows federal unemployment benefits to expire, it instead trumpets a plan to fight benefit fraud and abuse - a worthy cause, but one that will do nothing to help the millions of Americans struggling to pay the mortgage, the grocery bills, and for their children's health care.

The Bush job training plan is another example of the Administration's shell game. The Administration raided a proven job training program to fund their new community college initiative. Community colleges are critical to job training, but setting up a new under-funded program out of existing workforce dollars makes no sense. Dividing a meager $250 million among 1,661 community colleges -- $150,511 per campus-is insufficient for today's troubled economy.

In this economy, workers need more economic security, not less. Yet the Bush budget denies overtime protections to over 8 million workers and fails to increase the minimum wage for millions struggling to stay out of poverty.

The Bush savings accounts punish work and reward wealth, by allowing wealthy Americans to increase their investment earnings tax-free-while working Americans struggle to make ends meet. This proposal will cost billions of dollars outside the budget window-driving up deficits further to benefit the wealthiest Americans. And the Bush pension funding rules would penalize manufacturing sector pension plans and pension plans with older employees.

Health

In health care, the President has proposed a smoke and mirrors budget-long on rhetoric and short on real resources to meet the needs of the American people.

The American people face a crisis of escalating health costs and declining health coverage. Despite the President's lip service to these needs, the proposals in the budget do nothing to control costs and little to expand coverage. In fact, many of his proposals will actually make matters worse.

The President's proposes an additional $25 billion in tax breaks for Health Savings Accounts. This proposal benefits the healthy and wealthy and will actually raise premiums for most Americans.

He proposes the creation of Association Health Plans, would actually raise premiums for 20 million Americans and reduce benefits for millions more.

He actually proposes less for new tax credits to the uninsured than he did last year ($70 million versus $89 billion). The tax credits are grossly inadequate to buy meaningful coverage but will encourage some employers to drop the coverage they now offer.

The President touts his bioterrorism initiative, but his proposals cut spending 4% in real terms in the last two years. Under his budget, programs to strengthen the preparedness of hospitals, and state and local public health agencies would be cut $144 million this year.

The President touts his commitment to biomedical research, but funding for ongoing research grants has been cut to two-thirds below the rate of inflation.

The Administration ignores the health crisis facing minorities. Health scholarships for disadvantaged students are cut 80%, from $48 million to $10 million, and the overall health professions program, which largely benefits minority and underserved communities, was cut from $294 million to $11 million.

The Administration cuts $156 million in AIDS, STD and TB funding.

And cuts Medicaid $1.5 billion through "program integrity savings," including cuts in funds to States through programs like DSH.

And essentially eliminates the Community Access Program (cuts from $104 million to $10 million), almost as much as the proposed in increase for Community Health Centers ($164 million), even though they serve the same population.

And cuts CDC by $364 million, at the same time the budget document touts new initiatives to improve public health.

And proposes an additional $50 million for information technology in health care, an amount so small as to be practically worthless. One large health system (Kaiser) will spend $1.5 billion to put in a full it system. Canada will spend ten times as much for one-tenth the population.

Overall

Public health functions largely funded at current levels, with selected increases offset by cuts in important programs (see above).

Health financing programs offer little to control costs or expand coverage, and much of what it proposed is actually harmful-expanded deductions for HSAs and Association Health Plans.

Taxes

Despite an on-budget deficit that is already projected to be more than $4 trillion over the next decade, President Bush is proposing more than $1 trillion in new tax cuts in his budget. Like the $2 trillion in tax cuts already enacted, the additional $1.2 trillion in new tax breaks will go overwhelmingly to the wealthiest taxpayers. The Bush Administration is increasingly out of touch with economic reality. It has no understanding of the problems working families face every day. The President pretends that the economy is back on track even though there are no jobs being created. If the first $2 trillion in tax cuts for the wealthy did not produce any significant job growth, it is absurd to believe that another trillion dollars in tax breaks for the same people will magically result in an employment boom. Despite its optimistic rhetoric, the Administration's own budget analysis assumes only a very small decline in unemployment throughout 2004.

Defense

The Defense Budget for FY 2005 is $401.7 billion, a $26.4 billion (7%) increase from last year's defense budget of $375 billion. Of this $104.8 billion is for the military personnel accounts. Yet, the budget does not include the incremental funding required to pay for our operations in Iraq and Afghanistan which could be more than $60 billion. The Administration doesn't plan on asking for those funds until after the 2004 elections.