Herseth Response to President's Budget

HERSETH RESPONSE TO PRESIDENT'S BUDGET
Lewis and Clark, Mni Wiconi see Year-Over-Year Increase in Budget Outline
Includes Significant Cuts to Agriculture, Medicare, Education, Veterans, Yet Creates Largest Deficit in History

02/06/06

February 6, 2006, Washington, D.C. - U.S. Rep. Stephanie Herseth today responded to the release of the President's budget, which outlines funding recommendations for the federal government. The budget contained funding requests for South Dakota priorities including rural water projects and EROS, as well as $12.9 million for an Army Reserve readiness center in Sioux Falls, but remained full of misplaced values and unnecessary cuts while creating one of the biggest deficits in our nation's history.

Herseth said, "Amazingly, this budget contains deep cuts for rural America and still results in out of control deficits. With significant cuts to programs that people in rural America rely upon, such as Medicare, ag programs, economic development, education and veterans health care, this budget is bad for South Dakota. And despite these deep cuts to programs for rural America, this fiscally irresponsible budget creates one of the largest deficits in our nation's history."

South Dakota Water Projects

The budget includes $21 million for the Lewis and Clark Rural Water Project, an increase of $6 million over the President's budget last year; and a total of $32.1 million for the construction, maintenance and operations of Mni Wiconi, an increase of $2.25 million. Herseth said, "The extra $6 million is desperately needed by the communities that will be served by Lewis and Clark, especially Sioux Falls. I will continue to work, along with the senators, to build on this number as the budget makes its way through Congress."

In December of last year, Herseth joined Senators Johnson and Thune for a conference call with Josh Bolton, the Director of the Office of Management and Budget, to discuss specifically funding levels for South Dakota's rural water projects in the President's 2007 budget.

Medicare

The President's budget proposes cutting Medicare funding by approximately $35 billion over five years. Herseth said, "It is stunning that the President would recommend this type of cut to Medicare at the same time it is struggling to implement its costly and complex prescription drug benefit. At a time when the federal government is slashing funding for the Medicaid program and doing very little to help the uninsured, these cuts to Medicare pose significant threats to our nation's health care system."

With 16 percent of its population receiving Medicare, South Dakota has the 6th largest per capita Medicare enrollment in the United States.

Deficit and Fiscal Responsibility

Despite all the proposed spending cuts, with this $2.7 trillion budget, the fiscal 2007 deficit would remain near record levels in dollar terms, at $355 billion. Herseth noted that this figure does not take into account the full cost of our efforts in Iraq and Afghanistan and potential future costs for rebuilding the Gulf Region.

In 2005, the House Blue Dog Caucus offered a 12 Step Plan to reform the broken budget process. The Blue Dog plan required, among other things, that all federal agencies pass clean audits, a balanced budget, the establishment of a rainy day fund to be used in the event of a natural disaster, and reinstatement of the pay as you go rules. Herseth said, "We can't continue to pass the buck to our children and grandchildren. If states like South Dakota can balance our budget, there is no reason the federal government can't balance its budget as well."

Agriculture

The President recommends a five percent across-the-board cut to crop and dairy payments for producers, which would result in a reduction in many agriculture programs that are important to South Dakota. Herseth, who serves on the House Agriculture Committee said, "This is bad policy that hurts rural America, and it is particularly unwarranted, considering the current Farm Bill cost billions of dollars less than predicted when it was originally enacted in 2002. We shouldn't try to balance the federal budget on the backs of farmers and ranchers and rural communities and I will oppose these cuts."

Herseth supports the budget's provision to lower limits on individual payments to $250,000, which would result in a more equitable distribution of farm payments and save the government money overall.

Veterans Health Care

The budget provides for a continued suspension of enrollment for new priority 8 veterans. Last year, more than 1200 South Dakota priority 8 veterans were denied VA medical care services. The budget also proposes an annual enrollment fee for all priority 7 and 8 veterans, and to raise the medication co-payment amount for priority 7 and 8 veterans from $8 to $15.

Herseth, who serves on the House Veterans Affairs' Committee, said, "This budget is an insult to veterans. Hundreds of veterans in South Dakota are already being denied health care, and this budget would seek to add enrollment fees and nearly double fees for prescriptions."

Economic Development

The budget includes a 20% cut to Community Development Block Grants, which is an improvement over last year's recommendation by the President to zero out the CDBG program. Congress was able to reinstitute the funding through the budget process last year. This year's budget, however, eliminates the Community Services Block Grant.

The budget also includes $200,000 for Genesis of Innovation, Rapid City. The Genesis of Innovation for South Dakota is a non-profit 501(c)(3), which acts as an advocate for entrepreneurial-minded individuals, businesses, and agricultural producers who are pursuing innovative research and development for the purpose of incubating and fostering South Dakota owned businesses in the New Economy.

Department of Interior

The President's budget calls for a $52 million reduction for the Bureau of Indian Affairs. This cut comes on the heels of an announcement last week that Interior would cut Tribal programs to pay $7 million in legal costs from an ongoing dispute over Interior's management of Tribal assets. "BIA programs have rarely, if ever, been funded at adequate levels and these additional cuts continue that unfortunate trend. Last week's decision to extract legal fees from BIA programs coupled with today's budget request is another unjust disservice to Indian Country."

Education

The President's budget cuts 2.1 billion from education programs, restricting or eliminating programs ranging from pre-school to adult education. The proposed budget would fund No Child Left Behind at $15 billion less than its authorized level, taking the cumulative NCLB shortfall to over $55 billion since the legislation was signed four years ago.

Even though tuition costs have risen 40% since 2001, access to Pell Grants has either been cut or remained flat in each budget proposal. This year, the President has again frozen the scholarship maximum at $4,050.

http://www.house.gov/herseth/press_020606_budget.htm