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Newsletter: Straight Talk on America's Budget


Location: Unknown

Dear Friend,

One of my highest priorities in Congress is resolving our country's fiscal problems in a fair and responsible way. With such huge implications for our economy and our future, I know this is a subject of concern to you as well.

That's why I'm launching periodic "Budget Straight Talk" newsletters like this one -- to share what I've learned in my first few months as your Congressman, and what I'm working on as a member of the House Committee on the Budget. It's in the Budget Committee that many issues fundamental to the direction of our nation are decided, and I hope these periodic updates will help inform you about what's really going on in Washington.

A federal budget at last, or more short-term gimmicks?

Here's a fact that tells you a lot about the gridlock in Congress: for the past several years, there hasn't even been a federal budget. Congress was too divided to pass one. Instead, our government has been funded by a series of "continuing resolutions," short-term deals, and gimmicks that were enacted only after high-stakes political standoffs involving threats to shut down the government and default on our financial obligations.

The most recent of these is the "sequester" cuts that began on March 1st. These automatic, across the board cuts are having real consequences throughout the country. In California, 8,200 children will lose access to Head Start services that prepare disadvantaged preschool children for success in school. Low-income women and children may be denied nutrition assistance due to cuts in the federal WIC program, and the far-reaching cuts are leading to fewer FDA inspections, furloughs for national park police, and fewer meals for low-income seniors.

If that sounds unacceptable to you, that was the whole idea: to design cuts that would be so unappealing that Democrats and Republicans would be forced to agree on a more sensible deficit reduction plan. Unfortunately, this underestimated the intensity of anti-tax and anti-government ideology among House Republicans, who have now embraced the "sequester" despite warnings by independent economists that it would eliminate hundreds of thousands of jobs and undermine our economic recovery.

Now we are at a pivotal point that will determine whether Congress breaks out of the dysfunctional pattern of political standoffs that has taken the place of deliberative budgeting over the past few years. The House and Senate both passed budget resolutions in March, and President Obama presented his budget proposal to Congress in April. All that remains to reach a budget agreement for the upcoming fiscal year is for congressional leaders to appoint a Conference Committee and start the hard work of negotiation.

Unfortunately, after months of criticizing the Senate for not producing a budget proposal, Speaker Boehner is refusing to work out differences between the chambers and refusing to negotiate with President Obama. He believes his party's agenda is better served by allowing the "sequester" to take effect, and leveraging concessions this fall when the country drifts back to the brink of default as the debt ceiling is reached.

It's shameful that Congress cannot agree on a federal budget -- and that congressional leaders would choose to not even try. I will continue pushing for an orderly, good faith process to get to a budget agreement, but whether this happens is truly in Speaker Boehner's hands right now.

Some Positive Fiscal News

There is no question that America is in a fiscal jam brought on by fiscally irresponsible decisions in the previous decade -- including cutting taxes while waging two costly wars -- and compounded by the worst recession in three generations. But there is some positive news: our federal deficit is now declining rapidly due in part to improved healthcare costs, rising consumer confidence, a resurgent housing market, and higher tax revenues.

Domestic discretionary spending has been reduced to its lowest level as a share of the economy since Dwight D. Eisenhower was President, and the federal deficit has been cut in half over the last four years. According to the Congressional Budget Office, our deficit is projected to fall from 7% of the economy to 2.1% of the economy by 2015.

Congress and the President have more work to do, but as we debate the budget it's important to note that even with our fragile economic recovery we are making substantial strides in the direction of fiscal stability. And the outlook will greatly improve if we help the economy grow stronger and create more jobs.

Balanced Deficit Reduction vs. Cuts-Only Austerity

The competing budget proposals in Congress reflect dramatically different priorities and philosophies. House Republicans, led by Budget Chairman Paul Ryan, offer an approach focused on shrinking the federal government through deep cuts in research, education, infrastructure, and the social safety net and continuation of the "sequester" cuts -- while increasing the military budget.

I voted against the Ryan budget because I believe its extreme austerity would make our problems worse. It surrenders the future by failing to invest in the things we need -- education, research and infrastructure -- and increasing military spending when we don't need it and can't afford it. Worse, it elevates ideology over actual problem solving: cutting taxes in the face of our need for revenues to balance the budget, privatizing Medicare at the expense of seniors who cannot afford higher healthcare costs, and repealing Obamacare just as it is starting to benefit millions of Americans through lower healthcare costs and expanded coverage.

The better approach in my view is reflected in the two leading Democratic budget alternatives: the Van Hollen budget in the House, which I voted to support, and the Murray budget which passed out of the Senate. Both of these budgets confront our long term debt problem in a balanced and responsible way that keeps the economy growing, invests in the future, honors our commitments to seniors, and replaces the arbitrary "sequester" cuts with targeted spending reductions focused on closing wasteful tax expenditures and loopholes that benefit the wealthiest Americans and biggest corporations.

The President's Budget and Concerns about Social Security

President Obama's budget proposal also stabilizes our debt while investing in the future. I applaud most of the President's budget, but I strongly disagree with one element: his proposal to reduce Social Security benefits by adopting the "chained CPI" inflation formula.

This formula would reduce benefits for seniors who have paid into Social Security and are counting on those benefits. For seniors on fixed incomes like my 83-year-old mother, chained CPI means about $1,100 less to spend every year. What's more, Social Security is not contributing to our national debt or deficits, so there is no need to reduce the program's modest earned benefits for seniors.

That's why I've not only voted against chained CPI on the floor of the House, I've spoken out against it in floor speeches and joined 106 House Democrats in sending a letter to President Obama opposing this proposal.

Chained CPI is widely opposed by Democrats in Congress and it's important to note that the President included it only on the condition that Republicans agree to about $600 billion in increased tax revenues over the next decade -- which is unlikely. Still, the fact that President Obama included chained CPI in his proposal should be of concern to seniors.

Other Budget-Related Legislation

In addition to my work on the budget, I'm co-sponsoring legislation to addresses the deficit in targeted ways that don't threaten our economic recovery. I am a co-sponsor of a bipartisan expedited line-item veto, which would target wasteful and unnecessary spending by requiring an up or down vote by Congress on projects selected by the President for review. I am also supporting a bill to take action on recommendations the Government Accountability Office (GAO) has made in reports to Congress to reduce duplicative programs and enhance revenue, while protecting benefits earned by seniors and veterans.

Other budget ideas I'm considering include a bipartisan biennial budgeting bill that would have Congress pass its budget resolution and appropriations bills to cover a two-year period, allowing more time for planning, oversight, and review instead of crisis-driven, short-term funding deals. This idea has worked very well in local government, and I supported it in the state legislature.

In Conclusion…

That's a lot of information, but I wanted to catch you up on what I've been working on and why it is so important. I hope you find these Budget Straight Talk newsletters useful. Your feedback is always important as I work to provide you with the best possible information and level of service.

Jared Huffman

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