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President Clinton's Reasons for Vetoing the Republican Budget:
37. EDUCATION AND TRAINING FUNDING SHOULD BE STRENGTHENED, NOT CUT BY MORE THAN $30 BILLION
38. DIRECT LOANS: CHOICE AND COMPETITION MUST NOT BE ELIMINATED AND SCORING SHOULD BE UNBIASED
39. INCOME CONTINGENT -- PAY AS YOU EARN -- OPTION SHOULD NOT BE WITHDRAWN FOR MILLIONS OF STUDENTS
40. CUTS IN HEAD START WOULD LEAVE THOUSANDS OF CHILDREN WITHOUT A CHANCE
41. ENDING GOALS 2000 WOULD CRIPPLE STATE AND LOCAL EFFORTS TO RAISE ACADEMIC STANDARDS
42. SLASHES FUNDS FOR BASIC AND ADVANCED SKILLS ASSISTANCE
43. SHARP REDUCTIONS IN SAFE AND DRUG-FREE SCHOOLS WOULD CRIPPLE EFFORTS TO REDUCE DRUG ABUSE, PREVENT VIOLENCE, AND IMPROVE DISCIPLINE IN AMERICA'S SCHOOLS
44. TEACHERS WOULD BE DENIED THE TRAINING THEY NEED TO HELP STUDENTS REACH HIGHER ACADEMIC STANDARDS
45. EDUCATION TECHNOLOGY CUTS THREATEN TO LEAVE SCHOOLS, LIBRARIES, AND COMMUNITIES OFF THE "INFORMATION SUPERHIGHWAY"
46. CUTS TO THE PELL GRANT PROGRAM DENY DESERVING STUDENTS A COLLEGE EDUCATION
47. ELIMINATES AMERICORPS -- PREVENTING STUDENTS FROM LEARNING RESPONSIBILITY THROUGH COMMUNITY SERVICE
48. ELIMINATES FUNDING FOR WOMEN'S EDUCATIONAL EQUITY ACT
49. ELIMINATES THE SUMMER JOBS PROGRAM AND CUTS FUNDS THAT HELP YOUNG PEOPLE MOVE FROM SCHOOL TO WORK
50. CUTS IN EMPLOYMENT AND TRAINING PROGRAMS WILL LEAVE WORKERS UNPREPARED FOR THE NEW ECONOMY
51. CUTS ENFORCEMENT OF WORKPLACE SAFETY LAWS AND JEOPARDIZES ENFORCEMENT OF THE FAMILY AND MEDICAL LEAVE ACT AND THE MINIMUM WAGE
52. PROHIBITS IMPLEMENTATION OF THE PRESIDENT'S EXECUTIVE ORDER ON STRIKER REPLACEMENT AND MAKES IT TOUGHER FOR WORKING PEOPLE TO BARGAIN COLLECTIVELY FOR HIGHER WAGES AND BETTER BENEFITS
74. ABOLISHES COMMITMENT TO PUTTING 100,000 NEW COPS ON THE STREET
75. REDUCES THE EFFECTIVENESS OF THE VIOLENCE AGAINST WOMEN ACT
76. ABOLISHES NEW COMMUNITY DEVELOPMENT BANK PROGRAM TO LEVERAGE PRIVATE SECTOR INVESTMENT IN DISTRESSED COMMUNITIES
77. SLASHES FUNDING TO DEMOLISH SEVERELY DISTRESSED HOUSING PROJECTS, JEOPARDIZES ENFORCEMENT OF FAIR HOUSING LAWS, AND MAKES IT MORE DIFFICULT TO USE SURPLUS FEDERAL PROPERTY TO HELP THE HOMELESS
The Republican budget makes extreme, unnecessary cuts in Medicare and
Medicaid, education, and environmental protection to pay for excessive
tax cuts, largely for the wealthiest in our society. President Clinton
believes we must balance the budget in a way that is consistent with
American values: honoring our commitment to our seniors, helping working
families, providing a better life for our children.
Following are the most extreme elements of the Republican
budget.
HEALTH CARE. The bill contains $433 billion in Medicare and
Medicaid cuts, four times the largest ever, forcing many rural and urban
hospitals to close and reducing quality of care for all Americans.
MEDICARE. The Republican budget would turn Medicare into a
second-class health care program, slowing annual per capita spend growth to 5.5%, compared to 7.1% for the private sector. It raises premiums by $264 for an elderly couple in 1996 alone
and nearly doubles premiums by 2002.
MEDICARE FOR POOR ELDERLY AND DISABLED. The bill eliminates the
requirement that Medicaid pay premiums, deductibles, and copays for 5.4
million poor elderly and disabled people, disproportionately hurting
older women.
MEDICAID. The bill limits annual per capita Medicaid growth to
1.6%, compared to 7.1% for the private sector, denying coverage for
nearly 8 million people by 2002. Its block grant eliminates the national
guarantee of defined, meaningful coverage for the sick, elderly, poor,
pregnant women, blind, and disabled.
MEDICAID FOR CHILDREN AND ELDERLY. The bill could deny coverage
to 3.8 million children; 330,000 elderly could be denied nursing home care.
NURSING HOMES. The bill would repeal key enforcement measures
that protect nursing home residents -- 75% of whom are women -- from
abuses and inadequate treatment.
MASSIVE TAX CUTS. The bill provides $245 billion in tax cuts. The
tax cuts explode to $400 billion over ten years because key provisions
are written to expand dramatically after seven years.
UNFAIR TAX BREAKS. The bill takes from the poor to give to the
wealthy. According to the Treasury Department, families in the lowest
20% of income distribution as a group (and those with incomes under
$30,000, according to Joint Tax Committee), face a net tax increase.
Nearly half of the tax cuts go to the top 12% -- those with incomes
above $100,000. The top 1% -- those with incomes over $349,000 -- would
receive an $8,500 a year tax cut. Retroactive capital gains cuts provide
a $13 billion win dfall to those who have already sold their assets.
TAX INCREASE ON WORKING FAMILIES. The repeal of the Earned Income
Tax Credit hits 12.6 million working families (14.5 million children)
with an average $332 tax increase in 1996.
BREAKS FOR CORPORATIONS. The bill permits corporations to raid
pension funds, risking pensions for millions of workers, and allows many
profitable corporations to pay no income tax.
CHILDREN. The bill cuts benefits for disabled children and school
lunch and other nutrition benefits.
EDUCATION. The bill provides a gift to special interests by
denying direct college loan opportunities for 2.5 million students in
1,350 colleges and universities. It would lead to $30 billion in
education cuts over seven years, denying opportunities to millions of
young Americans, including cuts in Head Start, Safe and Drug-Free
Schools, basic and advanced skills for disadvantaged students, and Pell
Grant scholarships. In addition, Goals 2000 reforms and the AmeriCorps
community service program would be repealed.
ENVIRONMENT. The bill would open to oil drilling the rare,
pristine Arctic National Wildlife Refuge, and its cuts would lead to
massive reductions in enforcement of clean air and drinking water laws
and dramatically slow down clean-up of toxic w aste dumps.
1. MAGNITUDE OF $433 BILLION MEDICARE AND MEDICAID CUTS:
The Republican budget cuts Medicare and Medicaid combined by $433
billion over 7 years -- four times greater than anything ever enacted by
any Republican or Democratic President -- to fund a tax cut for
the wealthy. These cuts will deny health care coverage for nearly 8
million people by 2002, threaten urban and rural hospitals with closure,
reduce the quality of care for everyone, and increase health care costs
for the privately insured through cost shifting.
$433 Billion Combined Medicare and Medicaid Cuts Could Force Many
Rural and Urban Hospitals to Close.
Hospitals will receive $1,025 less per admission on average than
they would under current law, a drop of roughly 13%.
According to the American Hospital Association, nearly 700 hospitals
derive two-thirds or more of their net patient revenues from
Medicare and Medicaid. The combined Medicare and Medicaid cuts could
force many of these nearly 700 vulnerable hospitals to close.
Over half of these vulnerable hospitals are rural, and 20% are in
the inner city. Their closure will deny access to health care for many
people in rural and urban communities across America.
With each hospital closure comes job lose, since hospitals are often
one of the largest employers in rural communities.
$433 Billion Medicare and Medicaid Cuts Will Reduce the Quality of
Care for Everyone.
The American Hospital Association, the Catholic Health Association,
the National Association of Public Hospitals, and over 40 state hospital
associations say: "the reductions in the conference report will
jeopardize the ability of hospitals and health systems to deliver
quality care, not just to those who rely on Medicare and Medicaid, but
to all Americans."
$433 Billion Medicare and Medicaid Cuts Will Increase Health Care
Costs for the Privately Insured By Cost Shifting Billions of Dollars.
A new analysis by Lewin-VHI for the National Leadership Coalition on
Health Care concluded that the Medicare and Medicaid cuts in the
reconciliation bill could lead doctors and hospitals to raise their fees
on privately insured patients by at least $85 billion over 7
years through cost-shifting. Cost shifting is the process by which
health care providers charge privately insured people more in order to
make up for losses from serving Medicare and Medicaid beneficiaries and
the uninsured.
$67 billion of the $85 billion in increased costs would be passed on
to workers by employers in the form of lost wages and higher health care
premiums. This cost shifting would effectively reduce wage increases for
lower income workers by 10%.
60% of the shift would be concentrated on the middle class --
families with incomes between $20,000 and $75,000.
Their $270 Billion Cut Will Turn Medicare Into a Second Class
Health Care Program.
The Republican budget reduces Medicare spending growth per
beneficiary far below projected private sector growth rate. Based on CBO
data, private sector per capita health care spending is projected to
increase 7.1% per year over the next 7 years, but the Republican budget
reduces Medicare spending growth per beneficiary to 5.5%, on average.
Federal Medicare spending per beneficiary would be $1,700 less than
under current law in 2002.
3. SLASHES FUNDING FOR POOR ELDERLY AND DISABLED MEDICARE
BENEFICIARIES:
Under current law, Medicaid pays all Medicare premiums, coinsurance,
and deductibles for people below 100% of poverty (known as QMBs) and
premiums for people with incomes between 100% and 120% of poverty.
5.4 million poor elderly and disabled people currently have their
Medicare cost sharing covered by Medicaid. This assistance ensures that
they can afford Medicare.
Does Not Set-Aside Any Funds For Their Copayments and
Deductibles. The Republican budget completely eliminatesthe requirement that states cover coinsurance and deductibles for
poor elderly and disabled people, and does not set aside any money for
this purpose.
More than 5 million elderly and disabled people would immediately
lose their guarantee of assistance with copayments and deductibles.
Sets Aside Less Than Half Of What Is Needed For Their
Premiums. While Republicans claim to cover poor elderly and
disabled peoples' premiums, they set-aside less than half of the
money needed to cover their premiums by 2002.
950,000 Could Lose Assistance With Their Premiums -- Just When
Premiums Are Increased. HHS estimates that as many as 950,000 poor
elderly and disabled people could lose funding for their Medicare
premiums in 2002 -- at the same time that the Republican plan increases
these premiums.
Could Force The Poor To Leave Fee-For-Service Plans.
Without assistance with premiums, copayments, and deductibles,
poor Medicare beneficiaries may be forced to leave their fee-for-service
plan and enroll in a managed care plan that does not require
cost-sharing -- if one exists in their area.
4. ALLOWS DOCTORS TO OVERCHARGE:
Allows Doctors in new Medicare plans to "Balance Bill"
or Charge Medicare Beneficiaries Above the Medicare Payment Rates.
Without protections from balance billing, beneficiaries in private
fee-for-service plans or high deductible/Medical Savings Account plans
would be subject to higher charges.
The opportunity to balance bill in the new Medicare plans will give
doctors incentives to leave the traditional Medicare fee-for-service
program, forcing many patients to change their doctor or leave the
traditional fee-for-service program.
5. INCREASES MEDICARE PREMIUMS:
Increases Medicare Premiums and Burdens Older and Disabled
Americans -- Just to Pay for a Tax Cut for the Wealthy.
The Republican budget increases premiums from 25% of Part B program
costs to 31.5%. In 1996 alone, this change will increase costs for
elderly couples by $264. These higher costs will place a large financial
burden on Medicare beneficiaries -- three-quarters of whom have incomes
below $25,000 -- and will disproportionately burden older women.
Since 1984, the Part B premium has been set so as to finance 25% of
program costs.
In an effort to protect beneficiaries from excessive increases in
Medicare premiums, premiums were set at specific dollar amounts for
1991-1995, rather than at 25% of program costs. The 1995 premium was set
at $46.10 per month. As a result of the difficulties in estimating
program costs far in advance, this premium actually financed 31.5% of
1995 program costs, even though Congress never intended to raise
premiums above 25% of program costs.
In OBRA '93, Congress returned to the traditional approach of
setting premiums at 25% of program costs rather than writing fixed
monthly premium dollar levels into the statute. Thus, OBRA '93 set
premiums at 25% of program costs for 1996 through 1998. In 1996, 25% of
program costs will amount to $42.50 a month.
The Republican budget would set premiums at 31.5% of program costs
for the next seven years. President Clinton's plan maintains the current
policy and permanently sets premiums at 25% of program costs.
Among the 36 million Medicare recipients who will face higher
premiums are 8.8 million veterans -- one-third of all veterans in the
United States -- who will be forced to pay higher out-of-pocket costs
for lower quality care.
6. CONSTRAINS SPENDING IN TRADITIONAL MEDICARE MORE THAN IN NEW
PLANS:
The Republican plan disadvantages the traditional Medicare
fee-for-service program compared to the new MedicarePlus plans by
initially constraining spending in the fee-for-service program far more
than in the new plans.
In 1996 alone, the Republican plan allows spending in the new plans
to increase at an average per capita rate of 8.0% -- one third higher
than the increase for traditional Medicare.
This uneven treatment of MedicarePlus plans and traditional Medicare
will harm quality and create incentives for doctors to leave traditional
Medicare.
7. MEDICAL SAVINGS ACCOUNTS:
The Republican Medicare plan allows beneficiaries to withdraw a set
amount of money from the Medicare program to buy health insurance with a
high deductible. Individuals may deposit any money left over after the
purchase into a tax-preferred medical savings account (MSA).
MSAs tend to attract only the healthiest individuals, who expect few
medical expenses in the coming year and who typically cost the Medicare
program little.
To the extent that MSA vouchers are set at a level that exceeds the
cost of these healthy beneficiaries under the current Medicare system,
MSAs will increase spending on healthy beneficiaries.
In fact, CBO estimates that MSAs will raise Medicare costs by nearly
$5 billion over 7 years. A Lewin-VHI study concluded that MSAs would
cost the Medicare system $15-$20 billion over 7 years.
Since the Republican plan caps Medicare spending, MSA costs would
have to be offset by further cuts in services for the less healthy
beneficiaries remaining in the traditional fee-for-service plans.
8. LOCKS BENEFICIARIES INTO PLANS:
Under current law, beneficiaries are permitted to leave a managed
care plan at any time, with termination effective as of the first of the
first month following the request to leave.
Under the Republican budget, beneficiaries who enroll in one of the
new MedicarePlus plans, including managed care plans, provider-sponsored
organizations, or a high-deductible medical savings account plan, would
generally be locked into that plan for a year. In general, they could
not leave the program except during the annual open enrollment period.
The President's proposal retains current law and allows
beneficiaries to leave at any time.
9. INCREASES COSTS FOR BENEFICIARIES WITHOUT EXPANDING BENEFITS OR
PREVENTION:
The Republican budget increases beneficiary costs while only adding
one new benefit: coverage of oral nonsteroidal antiestrogen for the
treatment of breast cancer.
Currently, Medicare does not cover the array of preventive benefits
now offered by many private plans, particularly managed care plans.
These preventative benefits can both increase beneficiaries' health and
reduce costs at the same time.
President Clinton's proposal updates the Medicare benefit package to
make it more comparable to private sector benefit packages, including:
Mammography. The President's proposal eliminates
copayments for mammography services and provides annual screening
mammograms to help detect breast cancer.
Certain Colorectal Screening. Early detection of
cancers and other serious conditions can result in less costly
treatment, enhanced quality of life, and, in some cases, a greater
likelihood of cure. The President's proposal provides coverage for
colorectal screening.
Preventive Injections. The President's proposal would
increase payments for certain preventive injections provided in
physician offices which will encourage providers to immunize beneficiaries.
Respite Benefit for Families of People with Alzheimer's.
The President's plan creates a Medicare respite benefit for
families of beneficiaries with Alzheimer's disease or other irreversible
dementia, covering up to 32 hours of care per beneficiary per year,
administered through home health agencies or other entities. Services
could be provided in the home or in a day care setting.
MEDICAID
10. MAGNITUDE OF $163 BILLION MEDICAID CUTS: Lowering
average annual spending growth per recipient to 1.6% could cause
millions to lose coverage.
The Republican budget cuts federal support for Medicaid by an
unprecedented $163 billion -- over ten times anything ever enacted by
any Republican or Democratic President.
The Republican plan achieves these savings by capping overall
spending. This means that spending growth per beneficiary would fall
from the current 7.0 percent to 1.6 percent annually -- far below the
rate of inflation.
States cannot sustain coverage when federal funds are increasing at
only 1.6 percent per beneficiary. States will be forced reduce benefits
and/or provider payments and eliminate coverage for millions of people
on Medicaid.
11. MEDICAID CUTS COULD MORE THAN DOUBLE IF STATES REDUCE THEIR
SPENDING:
The $163 billion reflects only the federal cuts. Yet
Medicaid is a federal-state plan, and if states only contribute the
amounts that the federal government will match and provide no additional
funding, the Center on Budget and Policy Priorities estimated the total
reduction in federal and state Medicaid funds would exceed $400
billion over seven years, compared with current law.
Whatever the exact amount, given the other cuts in federal
assistance to states, the total federal and state Medicaid cuts are
likely to total far beyond $163 billion.
12.ENDS NATIONAL GUARANTEE OF COVERAGE:
The Republican plan repeals the Medicaid Program, replacing it with
a "block grant."
The Republican budget completely eliminates Medicaid's guarantee of
defined, meaningful coverage for Americans who are sick, elderly, poor,
blind or disabled in other ways.
Because the block grant constrains spending growth per beneficiary
to 1.6% per year, providing 28% less funding than under current law by
2002, states will be forced to significantly reduce Medicaid eligibility
and benefits.
Under current law, all states are required to cover a minimum set of
services, including hospital, physician, and nursing home services.
States have the option of covering an additional 31 services, including
prescription drugs, hospice care, and personal care services.
States could eliminate almost any benefit currently covered by
Medicaid. The only required services would be immunizations and
limited family planning.
13. NO GUARANTEE OF EVEN MINIMAL HEALTH CARE COVERAGE FOR POOR
CHILDREN UNDER THE AGE OF 13, PREGNANT WOMEN, AND PEOPLE WITH
DISABILITIES:
While the proposal includes language calling for States to provide
Medigrant services to poor children under 13, pregnant women, and people
with disabilities, States could determine the level of benefits provided
and define the eligible disabilities. Financially strapped States could
satisfy this requirement with de minimis coverage, which could
mean millions fewer people receiving a meaningful benefits package.
The President believes it is wrong to change the laws in ways that
could lead to less coverage for poor children, pregnant women, and
people with disabilities.
14. DEEP CUTS PLUS ELIMINATION OF GUARANTEE COULD LEAD TO MILLIONS
GETTING LESS COVERAGE OR NO COVERAGE:
With Federal Medicaid funding per beneficiary growing on average at
one-fourth the rate of private health insurance spending per person,
based on Congressional Budget Office data, states cannot continue to
guarantee coverage.
Of the 36 million Medicaid recipients, more than 18 million are
children. Medicaid covers one out of every five children in the nation.
Another 6 million of the current Medicaid recipients are disabled.
Medicaid functions as the primary insurer for many people with
disabilities, since private insurance is generally not affordable for
people with pre-existing conditions.
Sixty percent of all Medicaid beneficiaries are women.
About 1/3 of all babies born in the United States are covered by
Medicaid.
Over 90 percent of children with AIDS are covered by Medicaid.
Loss of Medicaid Coverage Under Republican Plan:
The reduction in Federal support under the Republican plan could
force States to deny coverage for nearly 8 million Americans in 2002
alone, according to HHS estimates.
These nearly 8 million people include:
3.8 million children
1.3 million people with disabilities
850,000 elderly
330,000 nursing home residents -- 75% of them likely to be women
150,000 veterans
15. WEAKENS QUALITY PROTECTIONS FOR NURSING HOME RESIDENTS AGAINST
ABUSE AND NEGLIGENCE:
Current law:The landmark 1987 nursing home reform
law, approved with bi-partisan support during the Reagan Administration,
sought to address at times deplorable treatment in nursing homes,
including unjustified physical restraints, and gross negligence in
caring for nursing home residents, by establishing the Federal quality
standards in place today. Prior to the OBRA '87 reforms, the Institute
of Medicine reported that all States had some facilities with serious
deficiencies in nursing home quality of care.
Progress:Since the 1987 reforms were implemented,
nursing home quality has improved dramatically. The use of physical
restraints has declined 25%; dehydration has declined 50%;
hospitalization rates have declined 31% (Research Triangle Institute;
HCFA).
Federal Enforcement and Key Protections Would be Repealed:The Republican bill takes away key federal protections and
enforcement. While States may want to maintain these guarantees,
inadequate resources could lead them to fail to set and enforce quality
standards that protect elderly and disabled people in nursing homes.
Repeals federal enforcement of nursing home standards. States could
turn over their survey and enforcement responsibilities to private
accreditation organizations with no Federal review, thereby reducing
accountability and increasing variations in quality and enforcement.
Nursing homes would no longer be required to optimize each
resident's health and well-being. The bill repeals the current
requirement that nursing homes provide services to "attain or
maintain the highest practicable physical, mental, and psychosocial well
being of each resident." Thus, residents could be denied skilled
nursing and rehabilitative services necessary to improve their ability
to function.
Residents would no longer be guaranteed the same comprehensive
assessment of their health and functional status now required nationally.
Uniform data collection would not be required, making monitoring
more difficult.
Federal training requirements for hands-on caregivers would be
eliminated; each State could determine who would be trained and how.
16. NO ADEQUATE QUALITY OF CARE FOR MEDICAID MANAGED CARE
PLANS:
Unlike, the explicit protections in current law for residents of
nursing homes and institutions caring for mentally retarded individuals,
the current Federal Medicaid contracting rules for Medicaid managed care
plans use proxy measures -- such as enrollment composition requirements
(the "75/25 rule") -- that are vaguely, at best, related to
quality of care for Medicaid beneficiaries who are enrolled in managed
care systems.
The Conference Agreement includes no quality of care standards for
managed care systems -- even though 23% of all Medicaid enrollees
received their health care through managed care programs in 1994, and an
even greater proportion is enrolled in managed care in 1995.
States would not be required to establish or enforce quality
standards for capitated managed care plans.
The Federal government would have no authority to enforce managed
care access standards or quality requirements.
The Administration's proposal would ensure quality of care for
managed care enrollees and nursing home residents by replacing out-dated
statutory rules with real quality of care protections for managed care
enrollees -- quality improvement programs that have been field-tested in
several states and were developed with extensive industry participation.
17. ELIMINATES QUALITY STANDARDS FOR FACILITIES THAT SERVE
MENTALLY ILL AND MENTALLY RETARDED INDIVIDUALS:
Federal law calls for explicit-outcome oriented quality of care
protections for mentally ill and mentally retarded Medicaid
beneficiaries who live in institutions.
While the Republican Medicaid proposal maintains some federal
protections for nursing homes, it completely eliminates the
current statute that includes explicit, outcome-oriented quality of care
protections for nursing home residents and mentally ill and mentally
retarded beneficiaries who live in institutions.
18. WEAKENS PROTECTIONS AGAINST SPOUSAL IMPOVERISHMENT:
The Republican budget undermines protections against spousal
impoverishment that were signed into law by President Reagan in 1988.
Since the law went into effect, it has protected about 450,000 spouses
of nursing home residents. Most of these spouses are women.
The Republican budget leaves it entirely up to States to determine
which persons in institutions receive Medigrant assistance. Individuals
could be denied coverage for long-term care services altogether. Spouses
of individuals denied coverage would receive no protection from the
"spousal impoverishment" provisions. Because the Republican
budget repeals the guarantee of nursing home coverage, it also
effectively eliminates the guarantee of protection from spousal
impoverishment.
The Republican budget also repeals the right of individuals to
enforce spousal impoverishment protections in court when they believe
they have been wrongfully denied, making the protections unenforceable.
19. ELIMINATES FINANCIAL PROTECTIONS -- PUTS MEDICAID
BENEFICIARIES' HOMES AND FAMILY FARMS AT RISK:
Under the Republican budget, the sick could be forced to sell their
homes, family farm, car, and all their savings in order to qualify for
Medicaid. The Republican proposal repeals all Federal laws protecting a
minimum level of income and assets (such as the family home or farm) in
determining Medicaid eligibility.
It allows States to count the value of one's home or family farm in
determining Medicaid eligibility.
People whom States define as no longer "poor enough" to
qualify for medical assistance would be faced with paying all their
medical costs themselves, or seeking help from relatives or charity.
In the worst cases, families would have to mortgage or sell their
homes to be able to pay for care, or elderly people needing long-term
care would have no choice but to turn to their children for help.
Nursing facilities could require additional payments from residents
or their families in order to be admitted, or in order to continue
living in the facility.
The Republican Medicaid plan would remove all restrictions on how
large a share of the costs of medical care States can require from
eligible individuals, other than children and pregnant women.
Cuts in the scope of the nursing home benefits could mean that
families of poor patients will have to pay for services such as personal
hygiene, laundry, or various therapies, that States now pay.
20. REPEALS REQUIREMENT THAT ALL COMMUNITIES IN A STATE RECEIVE
COMPARABLE BENEFITS AND HURTS URBAN AREAS:
The Republican Medicaid plan eliminates all requirements that
comparable services be provided across the different geographic areas of
a State. Thus, people in politically weak communities could receive
fewer benefits than those in more powerful communities.
Approximately 75% of Medicaid recipients live in cities. Assuming a
proportional allocation of the $163 billion in Republican cuts, Medicaid
spending in urban areas will drop by $122 billion.
The Republican budget could deny Medicaid coverage to 6 million
people living in urban areas, according to HHS, including:
Almost 3 million urban children
975,000 urban people with disabilities
650,000 urban elderly
21. CUTS WILL HURT VETERANS:
More than 600,000 veterans currently depend on Medicaid for their
health care.
The Republican Medicaid cuts could deny 150,000 veterans
Medicaid coverage in 2002 alone. Most could not afford private health
insurance, leaving many veterans without any health care coverage at all.
The Republican budget also doubles the copayment that veterans must
pay for prescription drugs for non-service connected conditions.
It also restricts the Secretary's ability to waive the copayment for
veterans who cannot pay.
22. THE SIZE OF THE TAX CUT, WHICH EXPLODES OUTSIDE THE BUDGET
WINDOW, CANNOT BE JUSTIFIED:
At a time when we are working to balance the budget, the
"Contract" tax cuts are too costly, forcing excessive cuts in
Medicare, Medicaid, education, technology, and the environment, as well
as the Earned Income Tax Credit.
Over 7 years, these tax cut provisions, including capital gains
cuts, estate tax cuts, and Individual Retirement Account provisions,
cost $258 billion. Moreover, the cost of these tax provisions,
particularly those for the most affluent, is designed to explode outside
the 7-year budge window -- to more than $400 billion over 10 years.
23. IT IS WRONG TO SINGLE OUT LOW AND MODERATE-INCOME WORKING
FAMILIES EARNING UNDER $30,000 A YEAR FOR A SPECIAL TAX INCREASE:
The Republican budget raises income taxes on low and moderate income
working families by $31 billion through cuts to the Earned Income Tax
Credit (EITC), a provision that President Ronald Reagan called "the
best anti-poverty, the best pro-family, the best job creation measure to
come out of the Congress."
President Clinton expanded the EITC to move families from welfare to
work and to help ensure that parents who work full-time do not have to
raise their children in poverty.
Nearly half of all EITC recipients with children are female heads of
households who choose to work rather than rely on welfare.
Under the Republican plan, 12.6 million working Americans with 14.5
million children would lose, on average, $332 of the EITC in 1996.
Moreover, even after accounting for the fully phased-in Republican tax
cuts, about 7.7 million families who earn under $30,000 a year would
face an average net tax increase in 1996 of $318 per family under their
plan.
On average, families in the lowest 20% of the income distribution
would face a net income tax increase, not a tax cut, under their
plan.
24. TAX CUTS ARE TARGETED TOO HEAVILY TO BENEFIT THE WEALTHIEST
TAXPAYERS, AND NOT ENOUGH ON HELPING MIDDLE CLASS FAMILIES:
At a time when we are all working to balance the budget, any tax
relief must be focused on middle income Americans.
The Republican bill gives nearly half the tax benefits to the top
12% of families with incomes of $100,000 or more. The highest income 1%
of families, those with incomes over $349,000, would receive an average
annual tax break of almost $8,500 per family.
Their bill provides $13 billion in retroactive capital gains relief,
a huge windfall for past investments, with no conceivable economic
purpose. This windfall cannot be justified in light of cuts on working
families and the poor.
Overall, Republicans provide capital gains tax cuts costing $47
billion over 7 years and $77 billion over 10 years, cuts that
overwhelmingly benefit the wealthy. In fact, 75% of the benefit of the
capital gains cuts go to the wealthiest 12% of households, who have
incomes over $100,000 a year.
25. SPECIAL INTEREST TAX LOOPHOLES:
The American people elected this Congress and this President to
balance the budget and move the country forward, not to provide special
tax breaks for special interests.
The Republican budget contains dozens of tax breaks for particular
taxpayers and special interests, costing the rest of American taxpayers
more than $3 billion over 7 years. These special-interest provisions,
both large and small, are designed to benefit, among others:
- multinational corporations that stockpile assets overseas,
- the airline industry,
- certain coal companies,
- real estate developers,
- insurance companies,
- certain convenience stores,
- newspaper companies, and
- certain pharmaceutical companies with operations in Puerto Rico.
These special-interest favors for the well-connected are
inappropriate, especially since this budget increases taxes for
millions of working families. These special interest provisions have
little or nothing to do with stimulating the economy or creating new
jobs. Now is the time to close loopholes and special interest
provisions, not open up new ones.
26. ALLOWS PROFITABLE CORPORATIONS TO PAY NO INCOME TAX, WHILE
MILLIONS OF WORKERS PAY THEIR FAIR SHARE:
This Administration is committed to simplifying the Alternative
Minimum Tax (AMT), without compromising fairness. The Republican budget
goes too far.
Under the Republican budget, some profitable corporations would be
able to pay little or no income tax, at a cost to the rest of America's
taxpayers of $15 billion over 7 years and $18 billion over 10 years.
The Republican proposal makes the tax code more complex, not
less, and rewards investments that are seven years old.
27. A $90,000 PER ESTATE TAX CUT CANNOT BE JUSTIFIED:
We ought to help farmers and small businesses whose heirs want to
continue running the family business, but we should not provide tax
breaks to the wealthiest estates at high cost when we are trying to
balance the budget.
The Republican budget would give an average of $90,000 in estate tax
relief to the wealthiest 1% of decedents owing estate tax each year --
about 30,000 wealthy estates -- costing $13 billion over 7 years and $27
billion over 10 years.
Only the wealthiest 1% of taxpayers who die pay any estate tax. An
estate that could take full advantage of the proposed changes could save
over $1 million in taxes.
Heirs who want to continue to run their family farm or small
business should not be forced to liquidate in order to pay estate taxes,
but the Republican budget goes way too far.
28. WEALTHY AMERICANS SHOULD NOT BE ABLE TO AVOID PAYING U.S. TAX
ON THEIR GAINS BY RENOUNCING THEIR U.S. CITIZENSHIP:
Wealthy Americans who seek to avoid their taxes by renouncing their
citizenship should pay the same tax on income accrued while they were
subject to U.S. tax laws that those who remain will pay.
The Republican budget effectively leaves open a loophole for
expatriates. Their provision would reward tax avoiders who are willing
to wait 10 years before realizing gains; it rewards those who invest in
foreign assets; and it makes enforcement very difficult.
29. MULTINATIONAL CORPORATIONS SHOULD NOT BE ABLE TO AVOID PAYING
THEIR FAIR SHARE OF INCOME TAXES BY SHELTERING PASSIVE ASSETS IN
OFFSHORE TAX HAVENS:
This Administration put in place a new rule in 1993 to reduce the
incentive for multinational companies to stockpile passive assets in
excess of reasonable business needs, primarily to avoid taxes, not to
invest, grow, and compete.
The Republican bill repeals this provision, enhancing the incentive
for these companies to move capital overseas and to keep their profits
in passive assets there.
30. ALL AMERICANS WHO WORK HARD AND PLAY BY THE RULES OUGHT TO BE
ABLE TO COUNT ON THEIR PENSIONS WHEN THEY RETIRE:
The Republican budget gives employers the green light to raid
their employees' pension funds.
During the 1980s, corporations removed more than $20 billion from
employee pension plans, often to fund corporate takeovers, until
Congress effectively put an end to this. And just last year, we took
further steps to improve pension funding and reduce taxpayer risk
through the Administration's 1994 Retirement Protection Act.
Now, the Republican budget permits employers to transfer without any
excise tax, pension assets in excess of 125% of a pension plan's
"termination liability" to pay certain employee benefits. In
effect, this would allow companies to use pension assets to free up
other corporate funds for other purposes.
The Republican proposal would increase risk to pensioners and to the
Pension Benefit Guaranty Corporation, and ultimately to America's
taxpayers. A plan's financial condition can change rapidly as interest
rates and markets fluctuate. Today's "overfunded" plan can
become tomorrow's underfunded plan, and experience shows that the
financial condition of plans can deteriorate significantly prior to
termination.
It would permit corporations to use valuable tax benefits granted to
help American workers accumulate retirement savings for nonpension,
corporate purposes.
It would permit corporations to remove billions from the retirement
system at a time when it is critical to increase national savings and
retirement security.
The Republican budget would require federal employees to pay more for
their retirement.
It also requires agencies to pay more for employees covered by the
Civil Service Retirement System (CSRS), diverting much-needed resources
from important programs.
31. REPEALS TAX CREDITS THAT CREATE HOMES AND JOBS FOR WORKING
FAMILIES AND REBUILD COMMUNITIES:
This Administration made the low income housing tax credit permanent
in 1993. Since its enactment in 1986, state housing agencies report that
the credit has been used to construct or rehabilitate nearly 100,000
units of low income rental housing per year.
The Republican budget terminates the low income housing tax credit
at the end of 1997, a cut of $3.5 billion over 7 years. Their budget
also ends an incentive for community development that builds bridges
between businesses and communities.
The Republican budget also would repeal the tax credit that
encourages economic activity in Puerto Rico. We must not ignore the real
needs of our citizens in Puerto Rico, and any legislation must contain
effective mechanisms to promote job creation in the Islands.
The Republican budget cuts aid to most of the severely disabled
children coming on the rolls by 25%, and slashes $12 billion from
disabled children's SSI benefits.
The tightening of eligibility would apply to children currently
receiving benefits as well as future applicants, so that 160,000
children currently in the program would lose eligibility within one year
after enactment.
The Republican bill creates an indefensible division between
severely disabled children, making some of them eligible for only 75% of
the federal benefit rate. Because of their responsibility for their
children, the low-income parents of these children experience special
costs and reduced employment opportunities.
The Republican bill would take away SSI and food stamp benefits from
legal immigrant children and adults who became severely disabled
after entering the U.S.
33. PROVIDES TOO LITTLE CHILD CARE FOR REAL WELFARE REFORM THAT
WOULD MOVE PEOPLE FROM WELFARE TO WORK:
The Republican Budget does not provide the child care that is
essential to move people from welfare to work.
The bipartisan Senate welfare reform bill would have increased child
care funding by $1.7 billion from the CBO baseline over the next five
years. By contrast, the Republican budget cuts that funding by
$1.4 billion, which means thousands of mothers will need to stay at home
with their children on welfare instead of going to work.
The Republican budget also weakens important bipartisan work
provisions of welfare reform such as requiring states to maintain their
stake in moving people from welfare to work, rewarding states for
putting more people to work, requiring recipients to sign personal
responsibility agreements, and providing a contingency fund for economic
downturns.
34. UNDERMINES THE NATIONAL NUTRITIONAL SAFETY NET:
The Republican budget excessively cuts foods stamp benefits by about
$35 billion over 7 years, cutting benefits by 20% in 2002.
Their optional food stamp block grant destroys our national
nutritional safety net.
Current law states that families with children that pay over 50% of
their income for housing will receive food stamps in order to keep these
families from having to choose between food and shelter. The Republican
budget repeals this provision.
The Republican bill would deny food stamp benefits to nearly 700,000
people, even those who are willing to work but cannot find a job.
The Republican budget would also deny food stamp and SSI benefits to
over 1 million legal immigrants. And it would severely limit
Medicaid, AFDC, and scores of other important federal programs to
legal immigrants.
It also cuts child nutrition and the school lunch program by $5
billion. In addition, it would force schools to act as an extension of
the nation's immigration authorities by denying school lunches to many
immigrant school children.
35. JEOPARDIZES IMMUNIZATIONS FOR CHILDREN:
The Republican budget repeals the Vaccines for Children program,
putting at risk at least $1.5 billion over seven years that would
otherwise provide vaccinations for children.
36. SLASHES CHILD PROTECTION BY 20%:
The Republican budget cuts and block grants funding for child
protection services and administration, including services that are
needed to remove children from unsafe homes, place them in appropriate
settings, and recruit and train foster parents and those wishing to adopt.
HHS estimates that total spending in these programs is slashed by
about 20%, or about $4 billion over seven years.
These cuts would occur at a time when GAO and others report that
resources are already failing to keep pace with the need. Between 1983
and 1993, foster care caseloads mushroomed by two-thirds. Over 1,300
children die each year due to child abuse and neglect.
Yet the Republican budget slashes and caps these programs,
eliminating the ability of the programs to respond to increases
incidence in child abuse and neglect.
37. EDUCATION AND TRAINING SHOULD BE STRENGTHENED -- NOT CUT BY
MORE THAN $30 BILLION:
While Republicans claim that they are balancing the budget to
protect our children and grandchildren, their budget proposals make
devastating cuts in education that would deny many children the tools
needed to rise to their full stature as human beings. These cuts would
halt years of progress preparing children for learning, raising
educational goals and standards, and making student loans more affordable.
Republicans propose to sell our nation's seedcorn. They cut
education and training by more than $30 billion over 7 years, denying
millions of children and youths opportunities to succeed.
RECONCILIATION: The main education issue in dispute in the
reconciliation package is their proposal to nearly eliminate the Direct
Loan program.
38. DIRECT LOANS: CHOICE AND COMPETITION MUST NOT BE
ELIMINATED:
A. The Republican budget cuts off direct lending opportunities for
2.5 million students in 1,350 institutions in 1996 alone.
Their budget effectively replaces the Direct Lending program with
the more costly, inefficient guaranteed loan program by
"capping" direct lending at 10% of total loan volume. 90% of
all schools will be denied the opportunity to choose their student loan
program.
On November 15, 1995, over 450 College Presidents wrote the
President, Speaker and Senate Majority Leader making clear that direct
lending was very popular, that competition and choice were the best
principle, and that arbitrary caps were counterproductive. The
Presidents and Chancellors of colleges and universities currently using
or planning to use the Direct Lending program wrote to oppose attempts
to "arbitrarily limit the ability of schools to participate in
direct lending."
This year, 1,350 colleges and universities will offer direct loans,
with an estimated loan volume of $12 billion. With more than 2 million
borrowers, direct loans now account for 35 to 40 percent of total
student loan volume.
The reason is straightforward: Under the direct loan program it is
easier for students to repay their students loans, is simpler to borrow,
and saves money.
A recent survey by Education Daily found that more than 90
percent of participating colleges and universities rate the direct
lending program as "excellent."
B. The Republican budget uses biased scoring of the Direct Lending
program.
Republicans claim that capping or eliminating Direct Lending will
save taxpayer's money. But that conclusion is based on a scoring gimmick
-- a special interest scoring rule imposed on the Congressional Budget
Office by the Republicans.
That biased rule requires CBO to include certain kinds of expenses
when calculating the cost of Direct Lending but not when calculating the
cost of ordinary guaranteed loans.
Larry Lindsey, a member of the Federal Reserve, recently wrote that,
"As long as it is necessary to provide a profit to induce lenders
to guarantee students loans, direct lending will be cheaper."
The Republican proposal puts the special interests -- the banks --
ahead of student interests. The Senate proposal to cap Direct Lending
would increase loan volume under the guaranteed loan program by more
than $100 billion. That would ensure as much as $6 billion in additional
profits for banks, lenders, and others who hold guaranteed student loans.
39. INCOME CONTINGENT -- PAY AS YOU EARN -- OPTION SHOULD NOT BE
WITHDRAWN FOR MILLIONS OF STUDENTS:
The Republican budget also effectively eliminates one of the most
promising features of the Direct Lending program, which gives students
the option of adjusting their repayment to reflect their ability to pay.
This change will make it more difficult for many students to take
low-paying public service jobs or start a new business or take a year
off to raise a child.
DISCRETIONARY EDUCATION AND TRAINING CUTS: The Republican budget cuts
discretionary education and training programs by $26 billion over 7 years.
Nearly all Americans agree that investing in education is critical
to our future economic prosperity.
Despite this consensus, the caps on non-defense discretionary
spending proposed by the Republicans would have a devastating impact on
educational opportunities for children and students of all ages.
The massive cuts in education proposed in just the first year of the
Republican budget plan constitute nothing less than a down payment on
the elimination of effective Federal support for education.
The Republican plan is an attack on programs that will improve
academic achievement, create safer school environments, improve the
quality of our teachers, promote parental involvement, and provide
innovative technology in our classrooms.
Moreover, the Republicans are proposing severe cuts in precisely
those areas that parents, teachers, and business leaders agree are most
important for making real improvement in our education system, such as
improving basic skills, raising standards for all students, keeping
schools safe and drug-free, raising the qualifications of teachers, and
bringing technology into the classroom.
40.CUTS IN HEAD START WOULD LEAVE THOUSANDS OF CHILDREN
WITHOUT A CHANCE:
The Republican budget cuts $135 million from Head Start in 1996 --
$535 million below the President's request for 1996.
Assuming Republican spending on Head Start remains frozen at 1996
levels, their proposal would deny comprehensive education, health, and
social services, to 180,000 children by the year 2002.
These cuts would fall particularly hard on our most vulnerable
children. Most of the children participating in Head Start are only 3
and 4 years old. 95% of these children come from families below the
poverty line and 13% have a diagnosed disability.
These cuts are penny wise and pound foolish, for Head Start is a
good investment in our nation's future. As the Council of Economic
Advisors concluded, after reviewing the literature on Head Start,
"Participants in Head Start-style programs are less likely to be
held back in school and less likely to be classified as
special-education students, and more likely to graduate from High
School." [Council of Economic Advisors, "Educating America: An
Investment in Our Future," September 1995)]
41. ENDING GOALS 2000 WOULD CRIPPLE STATE AND LOCAL EFFORTS TO
RAISE ACADEMIC STANDARDS:
The Republican budget eliminates Goals 2000, cutting off 9,000
schools currently using Federal funds to raise educational standards,
just as States and communities have completed their planning and begun
to implement comprehensive reforms based on their own high academic
standards.
The President's proposal increases funding for Goals 2000, aiming to
help more than 8 million children in 17,000 schools meet higher
educational standards.
Goals 2000 has received widespread support because of its
flexibility and its emphasis on high standards and accountability. The
Wall Street Journal has reported that Goals 2000 is viewed
"by many political analysts as the most flexible education plan
ever produced by the Federal government." Wall Street
Journal, 8/30/95.
IBM Chairman Lou Gerstner, for example, says that "Goals 2000
is only a small portion of what we need. But it is a very critical
portion because it is the fragile beginning of the establishment of a
culture of measurement standards and accountability in this country. We
must go beyond Goals 2000. But if we lose Goals 2000, it is an
incredibly negative setback for the Nation."
42. SLASHES FUNDS FOR BASIC AND ADVANCED SKILLS ASSISTANCE:
The Republican budget cuts more than $1 billion and 1 million
students from the Title I program that helps low-achieving poor children reach the same high standards expected of other students.
More than 14,000 school districts and more than 50,000 schools rely on Title I funding to help improve their students' basic and advanced skills.
The President has requested increased funding and greater targeting of those funds on communities with the highest concentrations of poor children, but the Republicans would both cut funding and reject greater targeting.
43. SHARP REDUCTIONS IN SAFE AND DRUG-FREE SCHOOLS WOULD CRIPPLE
EFFORTS TO REDUCE DRUG ABUSE, PREVENT VIOLENCE, AND IMPROVE DISCIPLINE
IN AMERICA'S SCHOOLS:
The Republican budget cuts spending on Safe and Drug-Free Schools program by more than half in 1996, from $466 million to just $200 million, reducing services to up to 23 million school children.
These funds currently support drug abuse and violence prevention activities for 39 million students in nearly all elementary and secondary schools.
The Republican budget amounts to a surrender to the drugs and violence that plague so many of our communities, despite the fact that school safety and student abuse of drugs and alcohol are among the greatest concerns of parents and teachers.
The President's budget rejects surrender and raises Safe and Drug-Free Schools funding to $500 million.
44. TEACHERS WOULD BE DENIED THE TRAINING THEY NEED TO HELP
STUDENTS REACH HIGHER ACADEMIC STANDARDS:
The Republican budget cuts the Eisenhower Professional Development State Grant program by 80 percent, from $251 million to just $50 million in 1996
For all practical purposes, this would end Federal support for State and local efforts to prepare educators to teach to high standards in the core academic subjects -- a key to reaching the National Education Goals.
The President's budget, by contrast, would nearly triple funding for the Eisenhower program to $735 million, providing States and communities with substantial new resources for teacher training.
45. EDUCATION TECHNOLOGY CUTS THREATEN TO LEAVE SCHOOLS,
LIBRARIES, AND COMMUNITIES OFF THE "INFORMATION SUPERHIGHWAY":
The private sector will build, own, and operate the emerging
National Information Infrastructure (NII). President Clinton has made
clear, however, that he will not allow the emerging information
superhighway to bypass middle-class Americans, to extend the gap between
the well-off and the needy, or to let the United States become a nation
of information "haves" and "have-nots."
That is why he strongly opposes Republican plans to gut the National
Telecommunications and Information Administration and its
Telecommunications and Information Infrastructure Assistance Program
(TIIAP). Cuts, like those proposed for TIIAP, would mean that hospitals,
clinics, schools, libraries, local governments and non-profits may be
excluded from the development of the advanced NII.
46. CUTS TO THE PELL GRANT PROGRAM DENY DESERVING STUDENTS A
COLLEGE EDUCATION:
Pell Grants are one of the bedrock Federal student aid programs,
providing assistance to more than 3.7 million financially needy students.
Republican proposals in 1996 cut $450 million from Pell Grants,
denying Pell grants to 380,000 deserving students in 1996
Pell Grants remain a good investment for our country. A wealth of
economic data show that college graduates earn more over their careers,
making college education a good investment for individuals and the
Nation. The Bureau of Labor Statistics estimates that between 1963 and
1992, improvements in education accounted for about 20 percent of the
per-capita income growth over the period.
47.ELIMINATES AMERICORPS -- PREVENTING STUDENTS FROM
LEARNING RESPONSIBILITY THROUGH COMMUNITY SERVICE:
The Republican budget eliminates the Americorps national service
program.
Its elimination would deny nearly 50,000 young people the
opportunity to serve their communities next year while earning money
toward their college education.
General David Jones, a former Chairman of the Joint Chiefs of Staffs
captured the spirit of the National Service program best when he said:
"AmeriCorps programs work. They show what we can accomplish when
the government operates as a true partner of communities. Most
important, they build partnerships by enacting an old truth that the men
and women in our armed forces learn so well: to earn opportunity you
must take responsibility for yourself and for others."
In contrast to the Republican cuts, the President would increase
funding for National Service by $345 million next year, providing nearly
50,000 community service and college aid opportunities next year.
48. ELIMINATES FUNDING FOR WOMEN'S EDUCATIONAL EQUITY ACT:
The Republican Budget eliminates the Women's Educational Equity program, denying schools funding for research and training programs designed to promote educational equity for women and girls.
49. ELIMINATES THE SUMMER JOBS PROGRAM AND CUTS FUNDS THAT HELP
YOUNG PEOPLE MOVE FROM SCHOOL TO WORK:
The Republican budget eliminates the Summer Jobs program, denying
about 600,000 disadvantaged young people meaningful summer work
opportunities next year that would help prepare them to be active
contributors to the workforce and the community.
By eliminating the Summer Jobs program, Republicans will deny nearly
4 million disadvantaged youth summer job opportunities over 7 years.
Contrary to some claims, studies show that the Summer Jobs program
does not displace private market employment but, rather, employs youth
who would otherwise be unemployed and on the streets. [Jon Crane and
David Ellwood, The Summer Youth Employment Program: Private Job
Supplement or Substitute, Harvard University, March 1984.]
The Republican budget cuts funding for the School-to-Work
initiative which helps states and local partners design systems that
help young people make the transition from school to careers and
lifelong learning.
Linking academic skills to job skills and classroom teaching to
worksite learning are essential to increasing worker productivity,
raising wages, and maintaining American competitiveness in the new world
economy.
These Republican cuts will require cuts in the grants to the 27
states already participating in the initiative, and prevent any
additional states from joining.
50. CUTS IN EMPLOYMENT AND TRAINING PROGRAMS WILL LEAVE WORKERS
UNPREPARED FOR THE NEW ECONOMY:
The Republican budget cuts the President's request for employment
and training programs by $1.6 billion -- or 26% below the 1995 funding levels.
The Republican budget reduces funding to help dislocated workers
find new jobs by $379 million -- or 31% -- compared to 1995 levels.
Republican cuts would deny 155,000 workers next year alone help
obtaining the skills they need to adjust to the new economy and to
corporate downsizing.
These cuts don't make sense. Education and training programs,
including those for experienced workers, have been shown to offer
significant economic benefits. One recent study concluded that each year
of education provided through a Pennsylvania program for older displaced
workers increased earnings by roughly 7 percent. [Jacobson, LaLonde, and
Sullivan, "The Returns to Classroom Training for Dislocated
Workers," unpublished manuscript, September 1994; reported in
Council of Economic Advisers, "Educating America: An Investment in
Our Future," September 1995.]
A major study of the Job Training Partnership Act's program that
provides training to economically disadvantaged adults found that the
program is cost-effective. Participation increased the earnings of adult
males by 10% and the earnings of adult female participants by 15%. These
earnings gains were one and a half times greater than the costs invested
to produce them. [Bloom, The National JTPA Study: "Impacts,
Benefits, and Costs of Title II-A," Abt Associates, March 1994].
51.CUTS ENFORCEMENT OF WORKPLACE SAFETY LAWS AND
JEOPARDIZES ENFORCEMENT OF THE FAMILY AND MEDICAL LEAVE ACT AND THE
MINIMUM WAGE:
The Republican budget cuts funding for federal enforcement of
workplace safety laws 33% below the 1995 level.
This cut would slow the Occupational Safety and Health
Administration's response to imminent dangers and workplace emergencies,
and would curtail or eliminate many compliance assistance activities.
As a result of their 33% cut, an estimated 50,000 more workplace
injuries and illnesses may occur that could have been prevented. [Labor
Department estimate based on Wayne Gray and John Scholz, "Does
Regulatory Enforcement Work, Law and Society Review, July 1993.]
For many employers, safe workplaces save dollars. High rates of
injuries and illness impose millions of dollars of additional costs on
businesses, in the form of higher workers' compensation payments,
related medical costs, and employee turnover costs.
Since OSHA was created in 1970, the workplace fatality rate has
dropped by over 50%, and injury and illness rates have declined in the
industries in which OSHA has focused its enforcement efforts. The
Republican cuts would reverse much of this progress.
An extraneous provision in the Republican budget would also block
OSHA's efforts to identify and address work-related musculoskeletal
disorders (MSDs or ergo). They would also allow thousands more
work-related injuries and illnesses, cost employers billions more in
unnecessary worker's compensation claims, and even preclude OSHA from
gathering information about the problem.
The Republican budget cuts jeopardize American workers' newly won
rights to family and medical leave.
President Clinton signed the Family and Medical Leave Act to allow
workers to take up to 12 weeks of unpaid leave for the birth of a child,
to care for a sick family member, or if they themselves become too sick
to work.
The Republican budget cuts by 12% funding for worker protection
activities, including enforcement of the Family and Medical Leave Act.
Because of these Labor Department enforcement activities, a pregnant
woman in Miami got her job and health benefits back after she had been
illegally fired from her job and lost her health insurance for
requesting a leave of absence to have her baby. Since enactment of this
law, the Labor Department has responded to over 3,500 cases involving
the Family and Medical Leave Act.
The Republican budget cuts jeopardize enforcement of the minimum wage
by cutting enforcement of protections such as the minimum wage by 12%.
Republican budget cuts undermine efforts to stop garment industry
sweatshops.
The Department of Labor in 1995 stepped up enforcement actions
against sweatshops. These actions yielded $2.2 million in backwages for
7,400 garment workers. By using the hot goods provision in the Fair
Labor Standards Act, the Department has held manufacturers accountable
for their contractors' labor law violations.
In August, the Secretary of Labor issued a national call for action
against sweatshops in the garment industry, following the discovery of
slave-like working conditions in a Southern California sweatshop.
The Republican budget's 12% cut in worker protection activities such
as these will seriously impede efforts to end the exploitation of
workers in sweatshops.
52.PROHIBITS IMPLEMENTATION OF THE PRESIDENT'S EXECUTIVE
ORDER ON STRIKER REPLACEMENT AND MAKES IT TOUGHER FOR WORKING PEOPLE TO BARGAIN COLLECTIVELY FOR HIGHER WAGES AND BETTER BENEFITS:
The Republican budgets contains an extraneous provision that would
prohibit implementation of the President's Executive Order that
prohibits federal contracts with companies that permanently replace
lawfully striking employees.
The President's March 8, 1995 Executive Order allows the federal
government to ensure a stable and dependable supplier base by
prohibiting federal contracts with companies that use permanent
replacement workers and by encouraging cooperative and productive
labor-management relations. Research has found that strikes involving
permanent replacements last 7 times longer than strikes that do not.
The Republican budget cuts the National Labor Relations Board by 30%
in 1996 alone, crippling the NLRB's ability to guard against unfair
labor practices by both employers and employees, and to protect the
right of workers to organize.
This 30% cut will destroy the orderly legal framework for resolving
labor-management disputes, which has served the nation well for 60
years, and will severely undermine the rule of law that has governed the
nation's labor relations.
This 30% cut would require the closure of over half of the
NLRB's field offices, forcing employers and employees to wait months
longer for resolution.
The Republican budget also includes extraneous provisions that would
restrict the NLRB's authority to enforce the National Labor Relations
Act -- a direct attack on the basic right of employees to organize unions.
The Arctic National Wildlife Refuge is a rare, pristine wilderness that the President supports protecting permanently, for the benefit of future generations.
The Republican reconciliation bill would open the Arctic Refuge to drilling by the oil industry in hopes of generating $1.3 billion in federal revenues.
The $1.3 billion estimate is overstated by several hundred million
dollars due to oil price assumptions and other factors. It also assumes
that the State of Alaska will not sue for 90 percent of the revenues (up
from 50 percent in the bill) -- even though the Alaska statehood
legislation gave them 90 percent.
Exploration and development would disturb the area and create unacceptable risks of oil spills and pollution.
54. CONTINUES TO TURN OVER BILLIONS OF DOLLARS OF TAXPAYER-OWNED
MINERALS FOR A PITTANCE, EVEN WHILE IT RAISES TAXES ON WORKING FAMILIES:
The Reconciliation bill includes sham mining reform that provides
for the sale of federal mineral rights at their "market value"
-- defined as the value of the surface land, not the minerals. It's like
selling Fort Knox for the price of the roof.
The provision -- which sets a 5 percent royalty to be imposed after
minerals are processed and after numerous deductions -- is so riddled
with loopholes that the Congressional Budget Office estimates that it
will produce less than $1 million per year for the Treasury from all
federal hard rock mines in the nation.
This, together with the mining provision in Interior appropriations,
provides for the continued giveaway of public treasures under a law
signed by Ulysses S. Grant in 1872. Just this month, Interior Secretary
Bruce Babbitt was forced to turn over nearly $3 billion worth of copper
and silver for less than $2,000.
55. MANDATES TRANSFER OF WARD VALLEY (CA) SITE FOR A LOW-LEVEL
RADIOACTIVE WASTE DUMP -- WITHOUT PUBLIC SAFEGUARDS:
The Administration has engaged in negotiations with the State of
California to transfer the Ward Valley site with conditions recommended
by a distinguished panel of the National Academy of Scientists.
The Republican proposal would bypass good science and mandate
unconditional transfer.
56. FAILS TO TAKE ANY STEPS TO BUILD ON OUR EFFORTS TO PROTECT AND
RESTORE THE FLORIDA EVERGLADES.
57. ENVIRONMENTAL BUDGET IS A CATCHALL FOR VARIOUS OBJECTIONABLE
POLICIES, MANY HAVING NOTHING TO DO WITH BALANCING THE BUDGET:
The Republican budget includes an uncompetitive approach for handing
out national park concessions that would protect vender monopolies,
weaken safeguards against price gouging, and generally compromise
efforts to bring pure competition to vender services.
Other provisions in the budget pander to special interests at
taxpayer expense, including special loophole water deals for corporate
agriculture and certain water districts, and changes to federal oil and
gas royalty collection that invite evasion by making collection more
difficult and costly.
Appropriations (VA/HUD & Interior):
The President and Vice President believe that the impact of deep
Republican cuts in non-defense discretionary spending imposed by the
caps in the Republican reconciliation bill would have a devastating
effect on the environment and public health over seven years. In fact,
the Republican multi-year budget resolution specifically called for cuts
to clean and safe water infrastructure, land management, and national
parks. Furthermore, additional special interest riders and policy
provisions severely limit EPA's ability to set and enforce environmental
standards, and DOI's and USFS's ability to manage lands in a sound
manner. The Republican budget also cuts the President's environmental
advisors, the Council on Environmental Quality, by more than 50%.
58. IRRESPONSIBLE ENFORCEMENT CUTS WOULD LEAD TO DIRTY WATER,
UNHEALTHY AIR, AND UNSAFE LAND:
Cutting fair and consistent enforcement would hurt families who
depend on clean air and water, and hurt companies that obey the law.
Enforcement cuts would help only those companies who continue to evade
environmental laws and pollute irresponsibly.
The Republican budget contains a 25% cut in EPA's enforcement budget
from the President's request.
According to the Philadelphia Inquirer, budget cuts have
already forced EPA to cut back on hundreds of inspections at toxic waste
sites and for industrial air pollution and drinking water supplies; the
Republican budget would put even more people at risk. (11/28/95)
59. CUTS FUNDS BY 17% TO SET PUBLIC HEALTH STANDARDS FOR AIR
POLLUTION, PESTICIDES, AND CLEAN AND SAFE WATER.
60. DRINKING WATER CUTS WOULD LEAD TO MORE CONTAMINATED
WATER:
Safe drinking water is the first line of defense for protecting public health. President Clinton believes that when Americans turn on their taps, there should be no doubt that the water is safe.
The Republican budget cuts by 45 percent ($225 million) the money
that goes directly to States to protect communities' drinking water,
compared to the President's budget. These funds are used by communities
to upgrade facilities and better treat contaminants such as
cryptosporidium, which in 1993 killed 100 people and sickened 400,000
others in Milwaukee.
In the last two years, millions of residents of major U.S. cities,
such as New York and Washington, DC, have been ordered to boil their
drinking water.
61. CLEAN WATER CUTS WOULD BLOCK EFFORTS TO KEEP RAW SEWAGE AND
OTHER POLLUTION OFF BEACHES AND OUT OF WATERWAYS:
The Clean Water Act is a great American success story. Twenty-five
years ago, the Cuyahoga River was so polluted it burned. Lake Erie was
dead. Garbage floated in the Chesapeake Bay. Today, those waters are on
the rebound.
The Republican budget specifically cuts funds that go to States for
waste water treatment -- making it difficult for States to comply with
the Clean Water Act.
The Republican budget cuts the President's request for waste water
treatment support to the States by 30%. This money is used to construct
and upgrade waste water treatment facilities that keep raw sewage from
flowing into our rivers, lakes and streams.
The Republican budget also contains a particularly objectionable
rider that will prevent EPA from stopping the dumping of harmful fill
into rivers and wetlands.
62. BUDGET CUTS WOULD STOP OR SLOW CLEANUP OF TOXIC WASTE DUMPS:
Fifteen years after Love Canal, one in four Americans -- and five
million children under the age of four -- still live within four
miles of a Superfund toxic dump site.
The Republican budget cuts the President's request for the Superfund
toxic dump cleanup program by nearly 25 percent ($382 million),
needlessly exposing citizens living near these sites to dangerous chemicals.
In addition, Republicans in Congress separately continue to change
the Superfund law to relieve polluters -- including the company
responsible for Love Canal -- of the responsibility to pay for the
pollution they caused and shift that burden to the American people.
63. EXTRANEOUS POLICY PROVISIONS THREATEN OUR WATER, AIR AND LAND
-- AND THE PUBLIC'S RIGHT TO KNOW:
On August 8, President Clinton signed an executive order on
pollution disclosure to protect peoples' access to information about
toxic emissions in their communities. He had expanded the public's
"right to know" once before. The law is the most
cost-effective pollution reduction program we have.
The Republican budget originally included 17 separate special
interest riders -- including one blocking the public's right to know.
The conference budget contains several back door ways to include
previously attached riders.
The conference report threatens the next phase of the Clinton
Administration's effort to expand information available to communities
-- information not currently reported to the public about dangerous
chemicals. The bill may prevent EPA from moving forward.
Efforts to prevent the reduction of toxic pollutants from hazardous
waste facilities and block upgraded pollution control facilities have
also been transferred to report language.
Echoing two riders on the House budget proposal, the report language
advises EPA to delay for nearly one year the Clinton Administration's
combustion strategy, which would issue overall protections to reduce
toxic pollutants from hazardous waste incinerators.
64. REDUCES ENVIRONMENTAL RESEARCH AND TECHNOLOGY:
Environmental research and technology funding is cut by nearly $1
billion or 20% from the President's request for FY 1996.
The Republican cuts include a 92% reduction from the President's
request for the Environmental Technology Initiative (ETI), which would
thwart efforts to encourage the development of new technologies that
reduce pollution and clean-up the environment while creating new jobs
and economic growth. America cannot expect to be the world's leader in
environmental technologies -- a market that is expected to boom to $400
billion by 2000 -- if American industry does not make sufficient
investments in this area today.
The Republican budget also proposes to slash scores of other
environmental research programs that provide objective information in
forestry, agriculture, minerals management, global climate change,
natural disasters, fisheries, weather forecasting, and other areas. This
would stifle our efforts to better understand and cope with
environmental change.
65. INTERIOR APPROPRIATIONS BILL JOINS WITH RECONCILIATION BILL TO
CONTINUE MINING GIVEAWAY:
The Republican budget for the Interior Department would allow the
moratorium on new mining patents to be lifted prematurely.
This, together with the mining provision in the reconciliation bill,
provides for the continued giveaway of public treasures under a law
signed by Ulysses S. Grant. Just this month, Interior Secretary Babbitt
was forced to turn over almost $3 billion worth of minerals to a foreign
mining company for less than $2,000.
66. WAIVES ENVIRONMENTAL LAWS AND OPENS TONGASS RAINFOREST TO
CLEARCUTTING:
The Republican budget proposes to dictate timber cutting levels in
Alaska's Tongass National Forest beyond sustainable levels. It would
waive environmental laws and expand clearcuts, through an extraneous
policy provision in the Interior appropriations bill.
The Republican proposal could hurt sport and commercial fishing
interests in the area and the region's tourism industry, which has grown
40 percent in four years.
According to tour operators, the visitor industry is more profitable
and has a higher payroll by far than the timber industry, and increased
logging will directly hurt their business. (New York Times 9/12/95)
67. BUDGET BLOCKS EFFORTS TO PROTECT PACIFIC NORTHWEST
SALMON:
For centuries, salmon have been among the most valued resources in the Pacific Northwest, as the Oregonian says, "a treasured part of our natural heritage." (11/12/95 editorial.)
The Republican Interior appropriations bill includes a policy rider
that would block efforts to protect salmon and ensure sustainable
economic growth in the Columbia River Basin, by terminating
comprehensive planning for the management of public lands in that area.
68. UNDERMINES THE CALIFORNIA DESERT -- THE NATION'S NEWEST
NATIONAL PARK:
Last year Congress passed, and the President signed, the California Desert Protection Act, the largest single designation of parks and wilderness areas ever in the lower 48 states.
The new reserve protects broad desert vistas, rugged mountain ranges and unique archeological sites.
The Republican budget provides just one dollar for the National Park Service to operate the new Mojave National Preserve.
69. WOULD COMPROMISE MANAGEMENT OF HEALTHY ANCIENT
FORESTS:
The Republican Interior appropriations bill includes a policy rider
that would prohibit the Administration from using the most current and
appropriate science to protect forests in the Pacific Northwest, a
practice that could lead to expanded logging of healthy ancient forests.
70. SHORTSIGHTED BUDGET CUTS UNDERCUT EFFORTS TO HEAD OFF CHANGES
TO THE EARTH'S WEATHER:
Recently a panel representing 2,500 scientists from 100 nations
confirmed that human activity is affecting the global climate. Earlier
this year, scientists won a Nobel Prize for their work on ozone depletion.
Climate change could bring an increase in heat waves, fires, and
pest outbreaks, increase the number of heat-related deaths and
illnesses, and expand the range of infectious diseases like malaria,
yellow fever, and encephalitis.
The Republican budget cuts by more than 40 percent programs designed
to slow global warming through innovative, voluntary energy efficiency
programs and to prevent depletion of the ozone layer.
These programs reduce pollution, save money, and create jobs.
71. CUTS ENERGY EFFICIENCY PROGRAMS, INCREASING ENERGY USE AND
ENERGY COSTS:
The Republican budget cuts DOE energy conservation programs by
almost 40 percent ($187 million) from the President's request.
Energy efficiency programs such as these save consumers money,
create jobs, and reduce emissions that contribute to air pollution and
climate change. The Department of Energy estimates that federal energy
efficiency programs would save homeowners $17 billion and businesses
$12.5 billion per year by the year 2005, and would create 57,000 jobs.
In addition, the oil that could be saved by these programs is
greater than the oil that can be recovered in the Arctic National
Wildlife Refuge.
The Republican budget plan would cut non-defense research and
development (R&D) by one-third in real terms over the next
seven years, from $34 billion in FY 1995 to $23 billion in FY 2002,
according to independent analysis performed by the American Association
for the Advancement of Science. This is an amount
equivalent to eliminating all federal spending on university research.
These cuts break with America's unwavering bipartisan commitment to
U.S. leadership in science and technology, and threaten our economic future.
The Institute for Electrical and Electronics Engineers describes the
proposed Republican cuts to R&D as "short-sighted,
disproportionate, detrimental to the profession, and potentially harmful
to our economic and technological competitiveness."
The Industrial Research Institute predicts that "proposed cuts
clearly will have a long-range impact on industry's capacity to carry on
technological innovation and compete globally in the next century."
The Competitiveness Policy Council warns that "Current plans
for eliminating the budget deficit may sacrifice the nation's ability to
generate new technologies and develop new products and processes."
These cuts could not come at a worse time. Japan will surpass the
United States in total government dollars spent on non-defense R&D
if the Republican cuts are implemented and the Japanese government
implements its plans to double R&D by 2000.
Indeed, since World War II, innovation has been responsible for as
much as half of the nation's economic growth, generating new knowledge,
creating new jobs, building new industries, and improving the quality of
life for all Americans.
Americans hold millions of jobs in industries that have grown as a
result of wise public and private investment in R&D, including (as
of 1992): Biotechnology (79,000 jobs), Computers (479,000 jobs),
Communications (366,000 jobs), Software (450,000 jobs), Aerospace
(895,000 jobs), Semiconductors (317,000 jobs).
In 1992 average pay for workers in these and other high-technology
industries was 60% higher than the average for all American workers.
73. ELIMINATES PARTNERSHIPS WITH INDUSTRY THAT PROMOTE
INVESTMENT IN HIGH-RISK RESEARCH WITH BROAD ECONOMIC POTENTIAL:
American competitiveness in the 21st century depends on our ability
to continue to fund the development of high-risk, innovative
technologies. Yet despite historical bipartisan support, Congress has
proposed to eliminate the Advanced Technology Program (ATP), a
merit-based, competitive, cost-shared industry-led partnership that is
enabling the private sector to invest in high-risk technologies with
broad-based future economic potential.
Meanwhile, public and private investment in R&D -- in particular
long-term R&D -- has been anemic for more than a decade, with
industry's R&D investment growth rate negative for the past four
years. This trend has made the ATP a small, but critical, part of the
nation's R&D portfolio that must be maintained.
By eliminating the Advanced Technology Program, Congress will force
the government to renege on its commitment to fund up to 250 ATP
projects involving 700 different small and large companies,
universities, and other organizations in 36 states, who have committed
nearly a billion dollars of their own money to these projects. Perhaps
more importantly, without the ATP, American companies will find it even
more difficult to invest in the breakthrough technologies upon which
this nation's future depends.
74. ABOLISHES COMMITMENT TO PUTTING 100,000 NEW COPS ON THE
STREET:
The Republican plan calls for a block grant that would repeal the
national commitment to funding 100,000 new police officers.
President Clinton's Crime Bill is well on the way to placing 100,000
new police officers on the streets. The Republican plan would bring that
program to a halt and not guarantee a single additional new officer on
America's streets.
75. REDUCES THE EFFECTIVENESS OF THE VIOLENCE AGAINST WOMEN
ACT:
The Republican budget reduces funding for domestic violence
prevention and intervention programs by $22 million from the President's
budget, including zeroing out grants for women's shelters and grants to
reduce sexual abuse of runaway and homeless youth.
76.ABOLISHES NEW COMMUNITY DEVELOPMENT BANK PROGRAM TO
LEVERAGE PRIVATE SECTOR INVESTMENT IN DISTRESSED COMMUNITIES:
The Republican budget eliminates the Community Development Financial
Institutions program which was created to bring credit and growth to
distressed communities by promoting the formation and expansion of
community development financial institutions.
Community development financial institutions provide credit,
capital, equity, and technical assistance to thousands of promising
small businesses, economic development projects, and new homeowners in
distressed communities in urban and rural America.
The Treasury Department estimates that each dollar of federal money
generates $10 in new development activity, creating jobs and economic
growth.
77. SLASHES FUNDING TO DEMOLISH SEVERELY DISTRESSED HOUSING
PROJECTS, JEOPARDIZES ENFORCEMENT OF FAIR HOUSING LAWS, AND MAKES IT
MORE DIFFICULT TO USE SURPLUS FEDERAL PROPERTY TO HELP THE HOMELESS:
The Republican budget cuts nearly in half the President's request
for funding to reform public housing and revitalize communities by
demolishing the most severely distressed housing.
The Republican budget transfers HUD's responsibilities for enforcing
the Fair Housing Act to the Department of Justice, jeopardizing civil
rights enforcement and needlessly wasting funds and time.
The Republican budget repeals the McKinney Act requirement that
organizations serving the homeless be given priority in acquiring
surplus Federal property for use in providing shelter, job training,
meals, medical care, and other support to the homeless.
78. THREATENS CONSERVATION BENEFITS ACHIEVED UNDER THE
CONSERVATION RESERVE PROGRAM:
The Conservation Reserve Program is designed to achieve long-term
conservation benefits by authorizing long-term contracts with farmers to
keep environmentally sensitive land out of production.
The Republican budget would allow producers to withdraw from 10- to
15-year Conservation Reserve Program contracts -- which were entered
into voluntarily -- by simply giving USDA 60-days notice.
The main purpose of the CRP is to achieve long-term conservation
benefits, This self-declared withdrawal process completely undermines
that concept. It also invalidates the whole concept of a long-term
contract between the public and the farmer.
Currently, only the Secretary of Agriculture has the authority to
grant such "early outs." He continues to use that authority
judiciously to ensure that only those lands that truly belong in the CRP
remain there. But a standing provision that allows contract holders to
withdraw whenever they want and at no cost is bad public policy and
should not become law.
79. PREVENTS FARMERS FROM GRANTING PERMANENT EASEMENTS UNDER THE
WETLANDS RESERVE PROGRAM:
The Republican budget would prevent permanent easements under the
Wetlands Reserve Program.
Right now this important -- and completely voluntary -- wetlands
restoration program relies on 30-year or permanent easements. The
response to the program from farmers has been overwhelming: for every
acre USDA has agreed to fund, farmers have offered seven.
Moreover, from the standpoint of p rotecting the interests of the
American taxpayer, permanent easements offer the government the best
value -- taxpayers only have to pay for wetlands protection once.
The Republican budget would federally mandate the exclusive use of
15-year contracts or easements. This would require repeated renewals and
additional costs to achieve permanent protection. The bill does not make
sense -- either to farmers, who like the current program, or to
taxpayers, who want the most for their money.
The President also opposes the bill's prohibition on permanent
easements and its exclusive reliance on 15-year easements for wetlands
preservation. We believe that far sounder public policy would be to give
farmers choices for protecting wetlands -- ranging from cost-share
assistance to long-term and permanent easements.
80. SHREDS THE FARM SAFETY NET BY CUTTING THE LINK BETWEEN
COMMODITY PAYMENTS AND FARM CONDITIONS:
The Republican budget slashes the farm safety net. In contrast to
the present system, which provides assistance to farmers only during
periods of low prices, the Republican budget provides a fixed payment to
producers during good years and bad -- and then eliminates this critical
safety net for American farmers altogether.
Fixed payments do not respond to changing market conditions. By
cutting the link between farm payments and market prices, the Republican
budget leads to undesirable results. Producers could receive windfall
profits in good years when prices are high, while family farmers'
incomes would not be protected when prices are low.
Fixed payments can mean producers get unnecessarily large amounts of
money when market prices -- and profits -- are very high. This invites
public criticism of all farm programs when budgets are tight.
81. CROP INSURANCE:
Last year's crop insurance reform produced a program that is
cost-effective and reliable for both producers and taxpayers. The reform
linked insurance benefits to farm program participation in order to
insure maximum producer participation.
Now Congress wants to disrupt this program by eliminating the link
between farm program benefits and insurance. If this happens, farmers
who do not see the advantage of signing up for crop insurance will be
financially vulnerable when disaster strikes.
This will undoubtedly lead to producers asking Congress and
taxpayers for crop disaster assistance money. It is bad public policy to
ask taxpayers to pay for two programs designed for crop losses -- the
crop insurance program and disaster assistance.
82. CUTS THE EXPORT ENHANCEMENT PROGRAM:
The bill cuts funding for the Export Enhancement Program (EEP) to
levels well below those agreed to with our trading partners.
EEP is designed to counteract the unfair pricing practices of
trading competitors.
EEP funding in FY 1996 is set at just $350 million, $633 million
less than the level permitted under the Uruguay Round Agreement in 1994.
Should our producers need the EEP in future years, lack of funding could
hinder U.S. farm export efforts.