Bloomberg News

House Panel Reduces Aid for Poor to Avoid Defense Cuts

May 08, 2012

A U.S. House panel voted to cut spending on food stamps, health insurance and other aid for the poor to avoid planned cuts in defense spending.

The House Budget Committee voted 21-9 yesterday for legislation that would reduce government spending by more than $300 billion over the next decade.

Committee Chairman Paul Ryan, a Wisconsin Republican, said the measure would eliminate duplicative programs and wasteful spending to head off Pentagon cuts without raising taxes.

“We shouldn’t be taking more from hardworking Americans to fix Washington’s mistakes,” Ryan said at the committee meeting. “We should be solving the problem with structural reforms to our entitlement programs to make them strong and sustainable.”

Democrats criticized the cuts and said they would disproportionately hurt the poor.

“Republicans have a real fairness problem,” said Representative Kathy Castor, a Florida Democrat, at the committee meeting. “Democrats and Republicans agree on the importance of reducing the deficit, but we have starkly different visions on how to get there.”

The House plans to vote on the bill this week. It won’t advance in the Democratic-controlled Senate, though it will establish the Republican position for negotiations later this year over what to do about automatic spending cuts due to begin in January.

Supercommittee’s Failure

The spending reductions are triggered by a so-called supercommittee’s failure last year to come up with a plan to reduce the government’s $1.2 trillion budget deficit. About $55 billion would be subtracted from the Pentagon budget, with an equal amount from non-defense programs.

Also yesterday, the House Appropriations Committee unveiled plans to boost defense spending next year by $1 billion to $519 billion, with an additional $88.5 billion for the war in Afghanistan.

The Budget Committee’s measure would cut off food stamps to 1.8 million Americans, according to the Congressional Budget Office, while reducing assistance to millions more. About 280,000 children would no longer be automatically eligible for free school lunches because they receive food stamps, according to CBO.

The bill would give states more ability to pare their Medicaid rolls and would end social services block grants, which fund programs such as Meals on Wheels for senior citizens. The bill would tighten rules on who may claim child-care tax credits in an effort to prevent aid from going to illegal immigrants.

Federal Retirement Benefits

Other provisions would reduce retirement benefits for federal workers, decrease funding for the administration’s health-care overhaul, raise premiums in the government’s flood insurance program and tighten medical malpractice laws, which the CBO said would reduce health-care costs.

The food stamp cuts are among the most contentious. Forty- six million Americans now receive aid, up 75 percent since 2007. Annual costs are projected to reach $80 billion, more than the annual budgets of many federal agencies. The average household receiving aid in 2010 had an annual income of about $8,800, according to CBO.

Food stamp aid averaged $287 per month, about $4.30 per person per day, according to the agency. Three-fourths of the households included a child, a disabled person or someone age 60 and older.

Food Stamp Cuts

The legislation would cut projected food stamp spending by about 4 percent over the next decade. Republicans say the state governments that administer the program have abused the rules for determining who qualifies for assistance.

“All we’re saying in this reform is the people who are actually eligible for the program, those are the people who should get it,” Ryan said. “That shouldn’t be a partisan issue. That’s common sense.”

He said the social services block grants are duplicated by “dozens” of other programs.

Democrats said the cuts went beyond targeting waste.

“It’s shifting all of the costs onto the most vulnerable people that don’t have strong enough lobbyists to stand up for themselves, and I think it’s a terrible wrong,” said Representative Lloyd Doggett, a Texas Democrat, at the committee meeting.

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net


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