Last Thursday (5.10.12) the House of Representatives took another whack at slashing the social safety net, ensuring that millions of members of our communities would go hungry, live on the streets, be in more crowded classrooms, be unable to work for lack of daycare, and become sicker as Medicaid funding would be more limited. All of this while working to ensure that those with the greatest incomes will still receive the highest percentage tax breaks given.

Of course, we trust that Sequester Replacement Reconciliation Act of 2012 (H.R. 5652) will neither be passed by the Senate, nor signed into law by the president. But the leadership and many members of the House are putting their true values out for all of us to see. Remember, the budget is a moral document, and where you put your money shows what you value.

This legislation is not the only an attack on those who are vulnerable, who are ill or have lost jobs. The most recent budgets, and certainly the Budget Control Act of 2011 (which kept us from exceeding the debt limit) have resulted in attacks of the lowest-wage earners.

Check the chart (EFFECTS OF PROPOSED FUNDING CHANGES IN 2013), which compares what would have happened as a result of the Budget Control Act of 2011 (Sequestration) and what is occurring in the appropriations negotiations being deliberated in the House and Senate right now. As things change, the chart will be updated.

Negotiations are moving slowly on means to avert Sequestration (known as the Fiscal Cliff). It seems it is up to Representative Boehner and the president to come to some agreeable compromise.  Although there is a tremendous amount of speculation about what will be the final deal; there is far more misinformation based on assumptions.

What we have, from the White House and from Representative Boehner’s own statements, appears on this chart.

COMPARING GOP ALTERNATIVES TO SEQUESTRATION WITH PRESIDENT OBAMA’S PLAN

(ALL ARE OVER 10 YEARS)

* Since establishment of the Budget Control Act (BCA) Discretionary Programs have already been cut by $1.5 trillion over the next 10 years. By 2017, non-defense discretionary spending will be at the level of 1962, with far fewer seniors and less wealth disparity.

** This is insufficient to offset even the cost of extending the tax cuts for the wealthiest 2% in our nation.

Sources:

http://www.speaker.gov/sites/speaker.house.gov/files/documents/letter_to_wh_121203.pdf

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/11/29/the-white-houses-fiscal-cliff-proposal/

This chart will be adapted as more information becomes available. Keep an eye on it.

New “solutions” to the fiscal crisis continue to emerge. Congress and the president continue to volley possible plans to avoid the “cliff.” Speaker Boehner and even the president are beginning to focus on one area of savings objected to by advocates who know what it is: a benefit cut to Social Security beneficiaries.

The “Chained-CPI” is a way to define the basis for inflation, slowing it – which affects the tax base – and more importantly it defines the annual rate of increase in Social Security benefits and veterans’ benefits. The election seemed to clarify that most of the public does not approve of cuts in benefits to our elders or to those in the greatest need, in order to support tax breaks for those with greater wealth. But, many do not recognize the actual effects of this change, if it is made.

CHAINED CPI, Our Elders and Our Veterans

New attention is being given to a measure of inflation termed the “Chained-CPI.” Currently, a formula for calculating inflation is based on a set of typical items in a market basket – the Consumer Price Index (CPI). The “Chained-CPI” differs in that it makes substitutions in the basket – so that is one product goes up in cost at a greater rate than most of the others, a lower priced item would be substituted. This makes the cost increase of the basket be less. So, the inflation rate would be less. Many government programs, as well as tax rates, are based on this index.

This impacts Cost of Living Adjustments (COLA) for recipients of Social Security, Veterans Benefits and many other programs. Robert Greenstein, Executive Director of the Center for Budget Policy Priorities (CBPP) addressed this in a recent interview on National Public Radio. For seniors at a Social Security rate of $1000, under the current CPI it might rise to $1080 for the next year. However, using the Chained-CPI, it might rise to only $1030. They would receive $50 per month less in Social Security benefits. This amount would be significant for seniors on fixed incomes, or for veterans recovering from the trauma of duty in Iraq or Afghanistan.

For seniors, neither the current CPI, nor the Chained-CPI is a good match for where they spend their money. Seniors generally make significantly more health care purchases than does the general public. These purchases are not well represented in either “market basket.” The Chained-CPI would make the situation even worse for our elders. This leads to limited-income seniors bearing the weight of savings for the general population.

The Sequester is bearing down on us!! This Friday, March 1, terrible cuts are due to be made that will seriously affect those in our communities who are barely able to provide food and shelter for themselves and family members. Many members of the House of Representatives are now saying: Oh, it isn’t so bad; its effects are being blown out of proportion by the administration.

Well, the administration is now one of at least three well-respected national groups outlining what the cuts will actually mean – on the ground, in YOUR STATE. As the sequester is designed, cuts would be made at a program level – not at a broad department level. So, cuts are specific to things like Head Start, not to a large entity like the Department of Education or Department of Health and Human Services. So, real children will lose their teachers and aides, and locations will be closed. This is only one of MANY examples.

If this happens, the cuts will be felt by everyone!

Check out the three views of the state level impacts:

• http://www.washingtonpost.com/wp-srv/special/politics/sequestration-state-impact/?hpid=z2
• http://www.chn.org/background/save-state-fact-sheets/
• http://costofwar.com/publications/2013/sequestration-pentagon-and-states/

Sequestration has gone into effect! It is a reality. What does it mean, and why did it become necessary?

The simple answer to the last question is that in August 2011 a deal was made, allowing the federal government to borrow money to continue paying the bills it had already accrued.  The Budget Control Act (BCA) was put into place. It did two BIG things:

• Set spending caps for discretionary spending area for ten years

• Required Congress to find ways to save an additional $2.5 trillion over the same period. If it didn’t, there would be dire consequences – known as “sequestration.” Funds would be sequestered from (almost) all spending areas, across the board, with no attention to what is most necessary, what preserves life and dignity of persons.

Congress did not do the job so the dire consequences are with us.  Most of us have yet to feel them, but that will come.

But, how did we get to the point of needing to make such cuts?  A better, more interesting explanation than what I would give is found here. Take a look. Think about and evaluate what you hear on the news, or see in papers. Is it true, what some members of Congress say, that we spend too much on non-defense programs, which help people? The non-defense discretionary spending has gone from a mere 16% of the federal budget to an even smaller 14% over the last five years.

At NETWORK, we keep saying:

• We need increased revenues.

• We need to protect those at the margins.

• We need to reduce out-of-control spending by the Pentagon, remembering that 41% of all weapons spending in the world is by the United States.

For more information, click here.

On Tuesday, March 12, Rep. Paul Ryan released the Republican FY14 Budget proposal: The Path to Prosperity, A Responsible Balanced Budget. It is difficult to see how it is either balanced or responsible.

As the New York Times noted in today’s editorial, this budget is nothing more than “a retread of ideas that voters soundly rejected, made even worse, if possible, by sharper cuts to vital services and more dishonest tax provisions.”

Also, as Ezra Klein points out in today’s Washington Post: “Here is Paul Ryan’s path to a balanced budget in three sentences: He cuts deep into spending on health care for the poor and some combination of education, infrastructure, research, public-safety, and low-income programs. The Affordable Care Act’s Medicare cuts remain, but the military is spared, as is Social Security. There’s a vague individual tax reform plan that leaves only two tax brackets — 10 percent and 25 percent — and will require either huge, deficit-busting tax cuts or increasing taxes on poor and middle-class households, as well as a vague corporate tax reform plan that lowers the rate from 35 percent to 25 percent.”

Rep. Ryan claims to balance the budget within 10 years while lowering tax rates. He admits that some of this is due to the already-in-place tax increases on those earning more than $400,000 per year, which he STRONGLY opposed, and more of it is due to repealing (not reducing) the Affordable Care Act. Medicaid would become a capped block grant program –which would result in denying healthcare to at least hundreds of thousands of persons who have no access to insurance, thus increasing the real costs of healthcare by their use of emergency rooms for common ailments. Medicare would have means-tested premiums for high-income seniors, and workers born in 1959 or later would enter a private Medicare Exchange with a premium support provided beginning in 2024. Supplemental Nutrition Assistance Program (food stamps) would be given over to the states in a block grant, and a federal mandate would call for time limits and work requirements.

In his totals, spending would be about $50 billion less than under sequestration! Discretionary spending would total $966 billion, which is $92 billion below the $1.058 trillion cap established by the 2011 Budget Control Act. There are no stated provisions to accommodate the needs of children, the elderly and those with physical or emotional restrictions on their ability to work.

NETWORK strongly opposes each of the above proposals as they create untenable situations for those struggling to survive economically.

President Obama, in his FY2014 Budget Request, aims to prime the economy to the benefit of all of us. His budget invests in what is necessary for the nation to have a strong future:

–        Repair of long-neglected infrastructure including schools, bridges and roads

–        Development of manufacturing innovation institutes

–        Increase of nondefense research and development

–        Education and job training to prepare people in the above areas, including “Preschool for All”

–        Investment in clean energy, creating an Energy Security Trust, encouraging states to cut energy waste, modernizing the energy grid and making permanent the tax credit for renewable energy production

NETWORK supports these elements, and applauds the President for making these improvements while cutting the federal deficit. Many of the proposals demonstrate a concern for the middle class and low-income families, echoing NETWORK’s call for a respect of the dignity of work and workers.

At a time when the Supplementary Nutrition Assistance Program (SNAP) is challenged by the Farm Bill and in the House budget proposal, NETWORK is extremely supportive of the President’s holding the line on SNAP funding. This is known to be the most efficient of government programs, ensuring adequate nutrition to millions of Americans and providing economic benefit to neighborhoods, as each dollar in SNAP benefits turns over $1.78 in commerce.

However, as in any budget, NETWORK raises attention to significant concerns. In an attempt to compromise with House opponents, the President has included use of the “Chained CPI” a formula which changes the way federal benefits and certain provisions of the tax code are adjusted for inflation. Over time, this would, in effect, reduce benefits to recipients of Social Security and various veterans’ benefits. The longer a person receives benefits, the greater the reduction. The President refers to protections for the most elderly, and for those with the greatest need. Details of this are yet to be seen.

The President also suggests increasing Medicare premiums for the wealthiest in the nation. NETWORK is concerned for the future impacts means-testing could have on future Medicare support in Congress. NETWORK does, however, laud contracting for better prices on pharmaceuticals for Medicare.

NETWORK also has mixed reaction to the tax proposals in the President’s budget. We are very grateful for the retention of the ARRA improvements to the Child Tax Credit (CTC), the Earned Income Tax Credit(EITC). We support making permanent the American Opportunity Tax Credit, the CTC and EITC.

We laud the President for including the Buffett Rule, requiring households with incomes over $1 million to pay more in taxes, and for closing many loopholes by which those with the greatest wealth are eluding portions of their dues to society.

However, it is unfortunate that savings from this is used to lower corporate tax rates rather than for supporting the many unmet needs of the nation.

Finally, President Obama calls for a raise in the minimum wage to $9/hour – one step closer to achieving a living wage. These changes will make it easier for workers to be rewarded for their effort by having a decent life for themselves and their families. The President’s budget proposal indicates a shift towards greater concern for the middle class and working families.

The changes proposed in President Obama’s FY 2014 budget are a step in the right direction for lessening the economic disparity between the wealthy few and average Americans. NETWORK applauds these efforts to promote meaningful work and to ensure that Americans can invest in their families’ future.

Further study of the FY2014 budget will be reflected as implications are recognized.

President Obama, in his FY2014 Budget Request, aims to prime the economy to the benefit of all of us. His budget invests in what is necessary for the nation to have a strong future:

• Repair of long-neglected infrastructure including schools, bridges and roads
• Development of manufacturing innovation institutes
• Increase of nondefense research and development
• Education and job training to prepare people in the above areas, including “Preschool for All”
• Investment in clean energy, creating an Energy Security Trust, encouraging states to cut energy waste, modernizing the energy grid and making permanent the tax credit for renewable energy production

NETWORK supports these elements, and applauds the President for making these improvements while cutting the federal deficit. Many of the proposals demonstrate a concern for the middle class and low-income families, echoing NETWORK’s call for a respect of the dignity of work and workers.

At a time when the Supplementary Nutrition Assistance Program (SNAP, usually known as food stamps) is challenged by the Farm Bill and in the House budget proposal, NETWORK is extremely supportive of the president’s holding the line on SNAP funding. This is known to be an extremely efficient government program, ensuring adequate nutrition to millions of Americans and providing economic benefit to neighborhoods, as each dollar in SNAP benefits turns over $1.78 in commerce.

However, as with any budget, NETWORK has significant concerns. In an attempt to compromise with House opponents, the president has included use of the “Chained CPI,” a formula that changes the way federal benefits and certain provisions of the tax code are adjusted for inflation. Over time, this would, in effect, reduce benefits to recipients of Social Security and various veterans’ benefits. The longer a person receives benefits, the greater the reduction. The president refers to protections for the most elderly, and for those with the greatest need. Details of this are yet to be seen.

The president also suggests increasing Medicare premiums for the wealthiest in the nation. NETWORK is concerned about the effects means-testing could have on future Medicare support in Congress. NETWORK does, however, laud contracting for better prices on pharmaceuticals for Medicare.

NETWORK also has mixed reaction to the tax proposals in the president’s budget. We are very grateful for the retention of the ARRA improvements to the Child Tax Credit (CTC), the Earned Income Tax Credit (EITC). We support making permanent the American Opportunity Tax Credit, the CTC and EITC.

We laud the president for including the Buffett Rule, requiring households with incomes over $1 million to pay more in taxes, and for closing many loopholes by which those with the greatest wealth are eluding portions of their dues to society.

However, it is unfortunate that savings from this are used to lower corporate tax rates rather than for supporting the many unmet needs of the nation.

Finally, President Obama calls for a raise in the minimum wage to $9/hour – one step closer to achieving a living wage. These changes will make it easier for workers to be rewarded for their effort by having a decent life for themselves and their families. The president’s budget proposal indicates a shift towards greater concern for the middle class and working families.

The changes proposed in President Obama’s FY2014 budget are a step in the right direction for lessening the economic disparity between the wealthy few and average Americans. NETWORK applauds these efforts to promote meaningful work and to ensure that Americans can invest in their families’ futures.

Further reflections about the FY2014 budget will come as implications are recognized.

Tomorrow, NETWORK will receive a volunteer who has been a government mailroom clerk since 1997. He has received awards for his dedication, never missing a day of work even in the midst of the 9/11 attack and anthrax scares. Having been furloughed since the government shutdown began last Tuesday, he said he is relieved to have work tomorrow, even though it is unpaid. He will use his mailroom skills to help us sort thousands of immigration advocacy postcards by zip code and Congressional district.

While the impasse in Congress seems baffling to most Americans, this NETWORK volunteer is actually incapable of understanding reasons for the government shutdown or that the dispute involves dismantling the Affordable Care Act. Yet, his livelihood and his life depend on both. Like many of his colleagues in the mailroom, he has a disability (autism) and other health issues that would cause him to be denied health insurance because of “preexisting conditions.”

Congress needs to hear more stories like the one above.Please share your story with us. We will collect and share them with Congress. You can also email us your story or picture(s) at [email protected]

NETWORK approaches today’s House vote on the passage of a new five-year Farm Bill with mixed feelings. We commend Congress for reaching a bipartisan agreement that avoided the absolutely unconscionable cuts to nutrition assistance proposed under the House-passed Nutrition Reform and Work Opportunity Act of 2013, which proposed nearly $40 billion in cuts over the next 10 years to the Supplemental Nutrition Assistance Program (SNAP). Still, as people of faith, we must speak out against the mentality that this compromise seems to embody and which frighteningly continues to appear in Congress’ legislative agenda.

At NETWORK, we realize the need for our nation to have responsible programs that work effectively and spend our tax dollars wisely. We recognize the need to rein in deficit spending and to get our national debt under control. However, we wholly denounce the idea that in order to do so, we must look to our nation’s vital safety-net programs for savings. Congress continues to approach programs that successfully lift folks out of poverty as a piggy bank for deficit reduction and for funding other programs. This attitude not only harms the most vulnerable among us, but it ignores true government waste in other arenas and the need for tax reform that generates reasonable revenue.

This year, we commemorate the fiftieth anniversary of President Lyndon Johnson’s proclamation of an unconditional “War on Poverty.” While our efforts as a nation have effectively halved the rate of poverty in America, there is still much work to be done. Congress should be prioritizing programs that protect the poorest among us as well as seeking to end the structural problems that marginalize people every day, not incessantly attempting to pare back the safety net. Beyond the safety net, Congress should be actively working to create jobs, repair our crumbling infrastructure, and ensure that everyone – corporations included – contributes to our continued prosperity.

Throughout his ministry, Jesus never ceased to proclaim the message that we will be judged by how we cared for people considered the least among us. Pope Francis continues to echo Jesus’s call, and reminds us all to seek creative solutions to end the structures that cause hunger and poverty. We urge all members of Congress to heed the call of the Gospel, to protect the safety net we have, and to proactively work to end hunger.