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March 14, 2005 Stealth bomb And so it begins. Last Thursday, under cover of media darkness - of what little coverage there was, much was focused on the likely impact on Alaskan oil drilling - the House and Senate budget committees passed their five-year budget plans, dropping the other shoe following President Bush's own proposals last month. And as I discussed then, Congress is marching full speed ahead into a "budget reconciliation" process, to force deep cuts in federal programs without having to muck about in actual public debate.Too technical, too inside-the-Beltway for you? Okay, let's try this: Newly emboldened by its strong Republican majorities in both houses, Congress wants to cut as much as $285 billion from domestic spending over the next five years. Among the programs facing the chopping block could be Medicaid (facing as much as $20 billion in cuts alone), food stamps, school lunches, education, housing, the Earned Income Tax Credit for low-income wage earners - really, anything you can think of that your federal taxes help pay for, with the exception of military and "homeland security" spending, which would get annual increases. It's being called the most devastating budget in a generation, since the first all-guns-no-butter budgets of Ronald Reagan more than 20 years ago. The stated reason given by Congressional Republicans is "deficit reduction," something that most news reports have dutifully repeated. "People will feel some real pain," Sen. Pete Domenici told the Washington Post. "But I don't know how you get a deficit down without people taking some medicine." All of which sounds very bracing, in a Mary Poppinsish sort of way. Until, that is, you discover that the federal deficit would in fact go up, not down, under the Congressional budget plans. According to the Center on Budget and Policy Priorities, both the House and Senate budgets would generate more than $120 billion in new red ink. That's because the cuts in social programs would be neatly counterbalanced by both defense spending hikes and new tax cuts - about $300 billion worth over the next five years. (If you've seen comments by Republicans in Congress that deficits would go down under their plan by $200 billion or so, that's a clever sleight-of-hand: The Congressional Budget Office projects deficits would go down by significantly more than that if no budget changes were made at all. As the CBPP's Richard Kogan puts it: "The budget committee is in the position of taking credit for gravity - 'See, our budget makes water flow from the top of the mountain down toward the lake.'") The budget bills, then, would merely oversee a massive shift of money from one pocket to another - with the lucky pair of pants belonging to those who get their federal money via tax breaks or defense contracts, not public education or medical coverage. This dynamic can be seen at its most bald-faced when it comes to the Earned Income Tax Credit, which House budget chair Jim Nussle has reportedly singled out as a likely target for cuts. The EITC is unusual as anti-poverty programs go, available to people who have a small amount of work income, but not too much - the credit you're eligible for slopes up as your income rises from zero, then back down as you earn enough to make your way out of poverty. The idea is to create a reward for poor people to work on the books, and it seems to have worked; the Clinton-era expansion of EITC is widely regarded as the only piece "welfare reform" to have actually put a dent in poverty. The important thing, though, is that the EITC is just a line you fill out on your tax form, the same as any other - the same, say, as reporting income as capital gains instead of regular income, a tax break that Congress is hoping to provide an additional $23 billion for in its new budget. By Congressional logic, though, the EITC gets defined as government spending that must be cut, while the lowered capital-gains tax rate is a tax cut that must be maintained - for the sole reason, apparently, that one is available only if you're poor, and the other only if you're wealthy enough to own property. If you're waiting for dollar figures for how much EITC would be cut - or any other programs, for that matter - don't bother. This is the genius of budget reconciliation: It doesn't set out specific cuts, just overall spending caps for the departments under the jurisdiction of each Congressional committee. Take, for example, the Agriculture Department. President Bush got all sorts of props for proposing cuts to farm subsidies in his budget plan, but Congressional leaders are already making noise about restoring them - crop subsidies are, pardon the expression, a sacred cow in farm states. (Which, let's not forget, have disproportionate representation in the Senate, thanks to the Senate's disproportionate electoral rules.) In a normal year, this would all be just a sideshow, part of the usual horse-trading that goes on in Washington. Under budget reconciliation, though, the Agriculture committees will face a dictate to cut somewhere between $2.8 billion (in the Senate bill) and $5.2 billion (the House version) from its programs; and after farm subsidies, it would have only one other big program to cut: food stamps. Farm-state Senators traditionally like food stamps - paying poor people to eat is good for farmers, too - which is one thing that's helped protect the program in recent years, even as such things as welfare and Medicaid have been whittled away. But if forced to choose between indirect subsidies via increased macaroni-and-cheese sales, and direct cash grants, it's likely the nation's farmers would take the cash, leaving the hungry out to dry. It's these sorts of desperate triage choices - farm subsidies or food stamps? college loans or school-lunch programs? - that will have to be made by the thousands if the budget reconciliation process goes ahead, as it seems almost certain it will. Those decisions wouldn't be made until the summer, though, by which time the budget rules, including the tax cuts, would already be set in concrete: The current plan is to pass House and Senate budgets this week, with a compromise bill worked out as soon as Congress gets back from its Easter break in early April. Even if you're horrified by the probable consequences - and make no mistake, the effect of bombarding poor families with multiple cuts at once is likely to be gruesome - it's hard not to be impressed on some level by the sheer Machiavellian chicanery of it all. "So many of these things are below the radar - not something you overhear people talking about on a subway platform," marvels Maureen Lane of the Welfare Rights Initiative, a program set up to serve and organize the thousands of New York City college students who rely on public benefits. "It's absolutely brilliant, politically. If you want to make the cuts and not have public debate, there's no better way to do it."
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