Obama's Scary Budget: Why the Neediest People Should Be the Most Afraid
President Obama will unveil his budget for 2012 on February 14. The administration has so far been guarded about detailing how deeply the budget ax will slice. What is certain, however, is that the cuts will be painful, and that the neediest Americans will feel the worst of that pain. More than 44 million Americans are living in poverty—a fact that Obama barely referenced in his State of the Union speech. Yet a huge chunk of federal spending goes directly and indirectly for programs and services that provide for the needs of the poor.
Last September, Obama dropped a major hint about which programs were likely to be hardest hit. He quietly issued a directive to federal agencies to come up with ways to slash up to $75 billion from discretionary spending for 2012. This figure was not much different from the $100 billion in cuts demanded by the new Tea Party-influenced House Budget Committee chair Paul Ryan.
Obama’s directive ticked off several politically safe ways to achieve those cuts, including streamlining government contracting, selling off federal properties, consolidating some agencies, and revamping data collection. When he listed some of these predictable ideas in his State of the Union speech, the response was, predictably, applause.
But Obama made no mention though of the likely cuts that pose the greatest peril to the needy, including a 50 percent drop in funding for community service block grants that has already been floated. The savings from these grants—which fund an array of community education, health and social service programs in poor, underserved, largely inner-city neighborhoods—would amount to a relatively modest $350 million. Yet the programs that could be defunded or completely eliminated include many of the type that were near and dear to Obama’s heart during his days as a community organizer in Chicago’s South Side.
The bigger 2012 cuts are likely to be concentrated among the dozens of programs and agencies already identified by the Office of Management Budget as ripe for the chopping block. These include: more than 110 programs in science, technology, engineering and mathematics education across 14 departments and agencies; more than 100 youth-mentoring programs, and 40-plus programs that provide employment and training assistance. Sizeable cuts also loom in departments that disproportionately impact low-income communities of color: Health and Human Services ($4.1 billion), Transportation ($4.0 billion), Education ($2.5 billion), Housing and Urban Development ($2.1 billion), and Justice ($1.4 billion).
Obama has little room to maneuver when it comes to these massive cuts. He has been relentlessly pounded by the GOP as a Big Government, tax-and-spend Democrat since the moment he announced his candidacy for President in 2007—a drumbeat that has become deafening. Nervous foreign investors as well as a slew of financial experts and economists, worry that the budget deficit—projected to soar to nearly $1.6 trillion in the current fiscal year, a post-World War II record—will continue to widen. This would saddle the nation, they claim, with higher taxes; deeper cuts in education, health and social services; staggering permanent debt; and possibly even bankruptcy.
This doomsday scenario is part political hyperbole, part financial panic. The projected deficit is about 10 percent of gross domestic product. That’s big enough, theoretically, to threaten economic growth if it were sustained for decades—but proportionally far smaller than the deficits that the United States ran during and immediately after World War II. The dooms-dayers also fail to acknowledge why and how the deficit ballooned to current levels.
It was unchecked defense spending and reckless tax cuts by GOP Presidents Ronald Reagan and George Bush that first swelled the deficit to post–World War II records. Bush and Congress piled on more debt with the $1 billion (and probably much bigger) bailout to Wall Street houses and banks in 2008.
The GOP boxed in Obama and forced him to extend the Bush tax cuts to the wealthy. This, along with Congress’s refusal to make more than cosmetic trims in a bloated military budget, continues the decades-long (and largely Republican) pattern of piling debt on more debt. The GOP recalcitrance virtually insures that the deficit “crisis” will continue to be a political attack issue and that programs to boost education, health, and jobs will continue to be the prime target of budget cuts this year and for years to come. The needy have good cause for concern.