Bush Proposed Budget Cuts

Bush administration officials recently laid out proposals for deep cuts in spending on housing and community development. On the same day, the nation's top health official fleshed out proposals to cut $60 billion from the projected growth of Medicaid in the next decade. Michael Leavitt, the new secretary of health and human services, said the president's proposed budget would crack down on the ability of middle-income families to get Medicaid coverage for nursing home costs, which average more than $55,000 a year. But Leavitt said that 12 million to 14 million people could gain health insurance if Congress approved Bush's proposals to provide tax credits for such coverage and helped small businesses band together to buy coverage.

Housing and Urban Development Secretary Alphonso Jackson and Commerce Secretary Donald Evans said Bush wanted to consolidate 18 local assistance programs scattered among five departments into one new grant program, to be run by the Commerce Department. The government is now spending more than $5.6 billion a year on the 18 programs, which include the Community Development Block Grant, a lifeline for many impoverished urban neighborhoods. For the new program, Bush will request $3.7 billion, a cut of about 33 percent.

"The current system forces communities to navigate a maze of federal departments, agencies and programs, each imposing a separate set of standards and reporting requirements," Jackson said. The programs, he said, "duplicate and overlap one another and have different eligibility criteria," with little accountability for the way money is used. But Jim Hunt, a city councilman in Clarksburg, W.Va., who is first vice president of the National League of Cities, said the president's proposal would have "a dire negative impact on cities of all sizes." For three decades, Hunt said, cities have used the federal money to create jobs, stimulate private investment and revitalize distressed communities. Akron, Ohio, Mayor Don Plusquellic, who is president of the U.S. Conference of Mayors, said: "The new proposal in unconscionable. It will cut programs that help the poorest and the neediest." Plusquellic, said the reshuffling of federal programs obscured the likely effects. "It would be more honest if the federal government simply said, 'We don't care about these poor people,' " he said.

Among the programs that would be folded into the new initiative is the Community Services Block Grant, which helps pay for community action agencies begun more than 35 years ago as part of what was called the war on poverty. These agencies provide a wide range of housing, nutrition, education and employment services to low-income people.

-Adapted from“White House plans deep cuts in housing, community grants; Top health official lays out plan to lop off $60 billion in projected Medicaid growth”, by Robert Pear, New York Times, February 4, 2005.

02/2005