2006 Budget: Helping the Rich, Hurting the Poor

From food safety to veterans' medical needs to meals for impoverished children, activists and economists alike say the $2.6 trillion federal budget proposed for 2006 strikes out at the country's most vulnerable citizens as well as working families who are already having trouble making ends meet.

"The budget features cuts in scores of programs that middle- and low-income families rely on, alongside large, additional tax cuts for those at the top of the income spectrum who have benefited the most from the tax cuts already enacted," said economists at the Center on Budget and Policy Priorities, calling the budget "a statement about national priorities."

And by failing to include the billions needed for the Iraq war and the trillions to restructure Social Security—in the unlikely event the privatization scheme is approved—economists say the budget will raise the federal deficit, despite the president's repeated claims that he'll cut it in a half by 2010.

In fact, CBPP says that by the end 2005, "the cost of tax cuts enacted over the past four years will be over three times the cost of all domestic programs" over the same period.

The following shows how some of the 150 programs slated for cuts would be affected by President Bush's 2006 budget:

• The budget would more than double the co-payment many veterans pay for prescription drugs and would charge some of them a new $250 annual fee for government health care. Some veterans hospitals would be shut down or have their services cut back.
  
  
• The budget would cut $1.1 billion from the federal food stamp program over the next 10 years, leaving 300,000 very low-income working families without aid.
  
  
• Medicaid would be reduced by $45 billion over 10 years. The CBPP economists said that reducing Medicaid when the ranks of the uninsured are swelling and states already can't afford their share of the program costs "would almost certainly push states to squeeze Medicaid programs in ways that further increase the numbers of uninsured children, parents, elderly and disabled people."
  
  
• Nearly all the Food and Drug Administration's inspection programs would be reduced. The number of domestic food safety inspections would drop by 5 percent, foreign drug plant inspections would drop by nearly 6 percent and checks on the nation's blood banks would be cut nearly 5 percent.
  
  
• Some of the 5 million people who depend on energy assistance to heat their homes may have to choose between eating or staying warm—as Vermont Sen. Jim Jeffords put it—thanks to a $200 million cut in the program, which has taken hits every year since Bush took office.
  
  
• Among $56 billion in education cuts, Bush wants to end Perkins loans, which provide low-interest loans to low- and middle-income college students. The budget also would end Perkins loan forgiveness for members of military and Peace Corps volunteers. The savings would be redirected to Pell Grants, but many of the students eligible for loans wouldn't qualify for the grants.
  
  
• Steep cuts—at least $1 billion—are proposed in community development block grants that help cities help low-income residents with everything from affordable housing to job training and child care.

Among many Republicans, reaction has ranged from concern to anger, according to media reports. While many are upset about programs in their own states that would be affected, some have taken a broader view.

Critics include Sen. John McCain (R-Ariz.), who said the artificially low $419 billion Pentagon budget that includes no funds for the Iraq war "removes from our oversight responsibilities the scrutiny that these programs deserve."

Sen. Gordon Smith (R-Ore.) said the proposed $45 billion in Medicaid cuts "would be devastating." He has introduced a bill to create a commission to study Medicaid for a year before any changes are made.