President Obama’s Fiscal Year 2012 Budget and H.R. 1, the Continuing Resolution: A Tale of Two Visions
During his State of the Union address in January 2011, President Obama called for making "hard choices now to rein in our deficits," but "not ...on the backs of our most vulnerable citizens." This principle, endorsed by recent fiscal reform commissions and incorporated in past deficit-control legislation, is especially important for women, who are at greater risk of poverty than men throughout their lives. And, it is especially important at a time when the economic recovery is still fragile, state and local governments are laying off workers and slashing services for vulnerable people, and millions of women and men are struggling to get back on their feet in the aftermath of the Great Recession.
The budget is a statement of national priorities, and in February 2011, the nation was presented with two drastically different visions: President Obama's budget for Fiscal Year 2012 and H.R 1, the House Republican bill for funding (or de-funding) the federal government for the remainder of Fiscal Year 2011.
President Obama's budget generally protects key programs for women and girls, in the context of a budget that freezes overall spending on "non-security" discretionary programs for five years. It would increase investments in some areas, but make painful cuts in others, including low-income home energy assistance and the community services block grant. The President's budget proposes to extend tax benefits for working families while allowing some tax cuts for the wealthiest to expire and trimming some tax subsidies for the wealthy and corporations. But, overall, the President's budget imposes most of the burden of deficit reduction on the spending rather than the revenue side of the budget.
In contrast, H.R. 1 would slash funding for programs vital to the well-being of women and their families, including Title X family planning and preventive health care services (eliminated), maternal and child health and nutrition programs, Head Start and child care, Pell Grants, job training, services for the elderly and the operating budget for Social Security offices. Yet the savings that would be achieved by gutting these and other domestic programs are less than half the cost of the two-year extension of tax breaks that House Republican leaders demanded last year and that benefit only the wealthiest Americans. Indeed, House Republican leaders have generally resisted any suggestion that tax breaks for the wealthiest Americans and corporations should be trimmed to contribute to deficit reduction.
(Technical note: In this report, NWLC compares President Obama's budget for Fiscal Year 2012 to H.R. 1. Because H.R. 1 is not a full budget, but an appropriations bill, comparisons are only possible for programs financed through annual appropriations. "Current funding" refers to the level of funding a program has for Fiscal Year 2011 under the enacted continuing resolution, not the level proposed in President Obama's FY 2011 budget. All comparisons are made in nominal dollars and do not account for inflation; thus, programs whose funding would be maintained at current levels would actually lose ground to inflation.)
NWLC analyzes provisions in the budget and H.R.1 of special importance to women and families:
- Health and Reproductive Rights
- Early Childhood Care and Development
- Employment and Training
- Assistance to Unemployed Workers
- Civil Rights and Worker Protections
- Tax Benefits for Working Families
- Safety Net Programs
- Violence Against Women
- Social Security and Retirement
- Tax Reforms
Health and Reproductive Rights
The President's budget shows a strong commitment to ensuring the full implementation of the Affordable Care Act and making sure all Americans have access to affordable, quality health care, although some important programs would be frozen or cut. In contrast, H.R.1 slashes funding for Affordable Care Act implementation and makes draconian cuts to a wide range of programs that improve the health of women and children.
Title X Family Planning Program
The Title X family planning program provides comprehensive family planning and related preventive health services to low-income women. In 2008, the program served over 5 million people, 93 percent of whom were women.The President's budget increases Title X family planning funding by about 3 percent.
While the increase in the President's budget isn't nearly enough to serve the 17 million women in need of family planning services, it stands in stark contrast to H.R. 1, which completely eliminates this important, cost-saving program.
Teen Pregnancy Prevention Program
Nearly one-third of teenage girls in the United States will become pregnant before the age of 20 and these pregnancies will cost taxpayers over $9 billion every year. The President's budget funds the Teen Pregnancy Prevention Program at $110 million, the same level as last year, and gives the Centers for Disease Control $22 million for evidence-based teen pregnancy prevention programs. Unfortunately, the President's budget still includes $50 million for ineffective abstinence-only programs.
H.R. 1 eliminates the teen pregnancy prevention program entirely.
Community Health Centers
Community health centers are an important source of primary and preventive care, especially for low-income women and women living in medically underserved areas. The President's budget shows a strong commitment to these important health care providers by proposing a funding increase of $1.1 billion, allowing health centers to serve over 900,000 new patients.
H.R. 1 would cut community health centers by nearly 60 percent ($1.3 billion). This catastrophic cut would eliminate funding for 127 clinics, cause over 2.8 million people to lose primary care access, and could cause over 5,000 health center workers to lose their jobs.
Maternal and Child Health Block Grant
The Maternal and Child Health block grant funds prenatal care for 2.5 million women and primary and preventive care services for 31 million children, including many with special needs. The President's budget proposes to cut this important program by 1.2 percent.
H.R. 1 proposes a cut in maternal and child health programs that is many times deeper than that in the President's budget -- 7.6 percent, or $50 million – which would cause much greater harm.
One worrisome item in the President's budget is a decrease in the Medicaid provider tax, which could ultimately cause states to cut back on Medicaid services that are important to many low income women.
Early Childhood Care and Development
The President's budget proposes substantial investments in early care and education to help children enter school ready to succeed and help parents afford the child care they need to work. It increases funding for the Child Care and Development Block Grant and Head Start/Early Head Start to maintain the gains achieved with the additional American Recovery and Reinvestment Act (ARRA) funds, and proposes a new Early Learning Challenge Fund to foster improvements in early care and education programs. In contrast, the funding cuts in H.R. 1 to Head Start and CCDBG would mean that 368,000 children would lose these early learning supports.
Child Care and Development Block Grant
The Child Care and Development Block Grant (CCDBG) program helps low-income families afford child care and supports activities to improve the quality of care for all families. The President's budget proposes to increase CCDBG funding by $1.3 billion, including an increase of $800 million in discretionary funds (which are appropriated on an annual basis and do not require a state match) and $500 million in mandatory funds (which require a state match). The additional funding would enable the program to maintain services to the additional children and families served under the ARRA-funded expansion. A total of 1.7 million children would be able to receive child care assistance–220,000 more children than would be served without this increase.
The additional funding in the President's budget also would support a reauthorization of the CCDBG that focuses on improving quality, protecting health and safety, and strengthening early learning. The funding set aside for quality improvement activities would increase to $373 million (from $271 million), of which $137 million would be for activities that improve the quality of infant and toddler care (up from $99.5 million previously). The set-aside for child care resource and referral and school-age activities would be increased to $25.71 million (from $18.96 million). Funding for the Child Care Aware toll-free hotline would remain at $1 million.
H.R. 1 would cut CCDBG funding for the remainder of FY 2011 by $39 million. This cut, on top of the loss of ARRA funds, would mean that more than 150,000 children would no longer be served by this program.
Head Start and Early Head Start
Head Start and Early Head Start provide comprehensive early education services to infants, toddlers, and preschoolers in poverty. The President's budget proposes to increase funding from the FY 2010 level (excluding ARRA funding) by $865 million, to $8.1 billion. This will allow Head Start and Early Head Start to serve approximately 968,000 children and their families, maintaining the ARRA expansion.
H.R. 1 slashes Head Start Funding by more than $1 billion dollars – nearly 15 percent of its total budget – eliminating 218,000 places for low-income children.
Early Learning Challenge Fund
The President's budget proposes to provide $350 million to establish a new Early Learning Challenge Fund that would offer states incentives to improve their early learning systems. States would compete for grants to improve the quality of early learning programs to help children enter kindergarten ready to succeed.
Child Nutrition Programs
The President's budget proposes a $1.343 billion increase for child nutrition programs, including the Child and Adult Care Food Program, which provides nutritious meals and snacks to 3.2 million children in day care, Head Start or outside-school-hours care centers as well as 112,000 adults receiving care in adult day care facilities.
Child and Dependent Care Tax Credit
The President's budget proposes an increase in the Child and Dependent Care Tax Credit for families earning up to $103,000. Families earning up to $75,000 would be eligible for a tax credit equal to 35 percent of qualified child care expenses, with the percentage phasing down to 20 percent for families earning $103,000 or more. For a family earning $50,000, the change could increase the maximum credit from $1,200 to $2,100. However, the proposal would not make the credit refundable, so families with little or no federal tax liability would continue to receive little or no benefit from the credit.
Individuals with Disabilities Education Act (IDEA) Infants and Families Program, and Preschool Grants
Funding for the Individuals with Disabilities Education Act (IDEA) Infants and Families program (Part C), which provides early intervention services for infants and toddlers with disabilities and developmental delays, would receive an increase of $50 million, to $489 million. The IDEA Preschool Grants (Section 619, Part B) program, which supports services for preschoolers with disabilities and developmental delays, would receive the same funding level as in FY 2010, $374 million.
21st Century Community Learning Centers
The 21st Century Community Learning Centers program supports after-school learning and enrichment activities. The President's budget would increase funding for the program from $1.166 billion to $1.266 billion. The program would also be part of a realignment and reorganization of several education grant programs.
H.R. 1 would reduce current funding for these centers by $1 million.
Child Care Access Means Parents in School
Funding for Child Care Access Means Parents in School (CCAMPIS), a competitive grant program supporting the participation of low-income parents in postsecondary education through campus-based child care services, would remain at $16 million.
Even Start would be consolidated along with other literacy programs into a new Effective Teaching and Learning: Literacy program that would receive $383 million in funding. Even Start would be eliminated as a separate program.
H.R. 1 also eliminates Even Start, but unlike the President's budget, it does not provide a clear substitute for its important work.
Over 25 percent of girls don't graduate from high school on time – if at all. And the rates are worse for girls of color – 41 percent of Latina and African-American girls don't graduate on time, nor do 49 percent of Native American girls.
President Obama's proposed 2012 Department of Education budget would increase federal funding for education, especially in public K-12 schools. Unfortunately, like H.R.1, the President's budget proposes to eliminate funding to help schools meet their gender equity obligations under Title IX, and would drastically cut funding for Career and Technical Education programs relied on by girls and women seeking to enter non-traditional, higher-paying fields. For college, the President's budget maintains the maximum Pell Grant award, in part by eliminating summer awards; while H.R. 1 cuts Pell grants deeply. (See also budget proposals for early childhood development and education.
Elementary and Secondary Education Act
The President's budget demonstrates a commitment to reauthorizing the Elementary and Secondary Education Act (ESEA), proposing to increase funding to $26.7 billion for a reformed ESEA. Title I, the program that provides school districts money for disadvantaged children, would receive $14.8 billion, an increase of $300 million over current funding levels. Enhanced investment in K-12 education is critical not only to the future economic security of women and families, but also to our country's future economic success. It is therefore even more important that the reauthorization of ESEA take into account the performance of subgroups of students who are most at risk, so that no child is left behind. To do so, there must be transparent reporting of data on subgroups of students and meaningful accountability for the success or failure of all students. Moreover, it is essential that programs that focus on improving academic achievement for low-income boys and girls of color be preserved.
In contrast, H.R. 1 would cut ESEA funding, including nearly $700 million in Title I grants to schools, which would mean an estimated 2,400 schools serving one million disadvantaged students could lose funding and approximately 10,000 teachers and aides could lose their jobs.
The President's budget supports low-income women and men in pursuing higher education by maintaining the maximum Pell Grant award of $5,550 and serving an estimated 9.6 million students. However, this funding is maintained partially through the elimination of summer awards, which allow low-income students to study year-round and is particularly beneficial to non-traditionally aged students, the majority of whom are women. The budget maintains funding for the Supplemental Educational Opportunity Grant (SEOG) program, which provides additional grants of up to $4,000 to the lowest-income Pell recipients, reaching 1.3 million of the nation's neediest students.
In contrast, H.R. 1 eliminates the additional $5.7 billion in discretionary funding for Pell grants provided in the currently enacted continuing resolution for FY 2011, cutting the maximum award by over $800 per student. H.R. 1 also eliminates funding for SEOG grants.
Career and Technical Education
The President's budget cuts funding for Career and Technical Education by $265 million, as compared to current funding levels. This program is a critical component of education for girls and women, as they remain vastly under-represented in traditionally male CTE courses that can lead to high-skill, high-wage, and high-demand jobs.
H.R. 1 cuts funding for this important program by eliminating its Tech-Prep Education State Grants.
Women's Educational Equity Act
Both the President's budget and H.R. 1 would eliminate funding under the Women's Educational Equity Act (WEEA). First enacted in 1974 to help educational agencies and institutions meet the requirements of then newly enacted Title IX, WEEA funds effective and replicable gender equity programs, including promising STEM programs. This $2.4 million program provides competitive grants to local educational agencies to partner with local organizations or to develop independent programs. At a time when the President has highlighted the importance of expanding and improving programs in math, science and technology, where women and girls remain vastly under-represented, WEEA funding is critical to ensure that women and girls have equal opportunities to participate and succeed in these programs.
Employment and Training
Since the beginning of the economic recovery in July 2009 through January 2011, women actually lost 366,000 jobs. And although women make up nearly half of the workforce, they remain dramatically underrepresented in many fields that offer relatively high pay for workers with relatively low educational levels. Investment in job training programs is essential to the economic recovery. In order to be successful in serving all sectors of the workforce, job training programs must be held accountable for reaching under-represented populations, including women, who often make up only a small percentage of participants in programs preparing workers for highly-skilled and high-paying jobs.
President Obama's proposed 2012 Department of Labor budget would decrease funding in the Employment and Training Services Administration by approximately five percent from current funding levels, but also would increase funding for several critical programs that enable underserved populations to gain training and skills for employment in growth industries. It further protects funding for programs that track important employment data, while creating a new fund to assist states in implementing paid leave policies.
H.R. 1 would cut job training programs by over $2 billion.
Women in Apprenticeship and Non-Traditional Occupations
The budget maintains level funding of $1 million for the Women in Apprenticeship and Non-Traditional Occupations Act (WANTO), which funds targeted training for women in non-traditional fields. This kind of accountability is particularly important given pending cuts in Career and Technical Education.
Green Jobs Innovation Fund and Workforce Innovation Fund
The budget increases funding for the Green Jobs Innovation Fund by 50 percent, as compared to current funding levels, providing a total of $60 million for training to help unemployed or low-wage workers advance into the "green industry." And it provides nearly $380 million for the newly created Workforce Innovation Fund, an initiative jointly administered by the Departments of Education and Labor that would provide grants directly to states to pursue promising workforce preparation programs.
H.R. 1 would eliminate the Green Jobs Innovation Fund.
Senior Community Service Employment Program
A deep cut in both the budget and H.R. 1 targets the Senior Community Service Employment Program, which faces a 45.5 percent decrease in funding under the budget and a 63.6 percent slash in the House CR. This important program, 70 percent of whose participants are women, provides job training and employment opportunities for disadvantaged older workers. Recent research has shown that the gender pay gap is even greater for older women – they earn only 68 cents to every dollar earned by men the same age.
Bureau of Labor Statistics, the Workforce Data Quality Initiative, and Women's Bureau
Programs that track demographic trends in employment are critical to ensuring that women have the tools to pursue equal pay and equal career opportunities. The budget maintains or increases funding for many programs in this area, including the Bureau of Labor Statistics and the Workforce Data Quality Initiative. The budget also protects funding for the Women's Bureau, the only federal office concerned exclusively with serving and promoting the interests of female workers.
H.R. 1 cuts the Workforce Data Quality Initiative entirely.
State Paid Leave Program
This year's budget includes $23 million for the State Paid Leave Program, which will provide grants to aid states in implementing innovative paid leave insurance programs. State paid leave insurance programs will help workers who need to take time off for reasons covered by the Family and Medical Leave Act, such as caring for a newborn or recently adopted child or for a seriously ill family member. Without these programs, workers who cannot afford to take unpaid leave are forced to choose between the care their families need and the paychecks their families rely on. The funding in this year's budget means more states will be able to help workers avoid this difficult choice.
Department of Labor Wage and Hour Division
The budget provides $241 million to the Wage and Hour Division, a slight increase compared to current funding levels, for the enforcement of a range of worker protection laws, including minimum wage, overtime pay, and family medical leave. The Wage and Hour Division budget includes $15 million for work on the inter-agency misclassification initiative, which targets the misclassification of employees as independent contractors.
Assistance to Unemployed Workers
During the Great Recession unemployment reached record highs, and unemployment rates among single mothers and women of color exceeded overall unemployment. Although a modest recovery is underway, it has largely left women behind and has a long way to go: in 2012, unemployment is expected to remain above 8 percent. State unemployment insurance (UI) systems are already strained by the widespread and prolonged unemployment. The President's budget includes a proposal to relieve pressure on state unemployment insurance systems to protect both jobless workers and employers.
State Unemployment Insurance Programs
At the end of 2010, 31 states' UI programs were in debt, forcing them to borrow billions of dollars from the Federal government in order to continue paying benefits. To repay these loans, federal UI taxes on employers are automatically scheduled to increase in a number of states. The President's budget would provide short-term relief to states with indebted UI systems by suspending interest payments on their debt, helping to avert tax increases on employers while the economy is weak. Over the longer term, the proposal would help shore up state UI trust funds. Starting in 2014, the federal government would gradually raise the amount of wages subject to the federal UI tax from $7,000 to $15,000 per worker. This would bring the UI taxable wage base to roughly the same amount, in real terms, as it was in 1983, when the level was last changed.
At the same time, the federal unemployment insurance tax rate would decrease to make the change revenue-neutral for the federal government. But, because the increased federal taxable wage base would raise the floor for the taxable wage base in the states, this change would help states to rebuild their strained UI programs and help avert cuts to UI benefits.
Civil Rights and Worker Protections
This year's budget reflects the importance of the government's civil rights agencies in helping to ensure that workers, women, and citizens will be able to receive the nondiscriminatory treatment they deserve in such crucial areas as employment, education, and medical care. Fully funding the civil rights agencies gives teeth to critical laws that protect women, including the Equal Pay Act, Title VII, and Title IX.
Equal Employment Opportunity Commission
In 2010, more than 29 percent of all EEOC charges claimed sex discrimination. Under President Obama's budget, funding for the EEOC would increase by $19 million to a total of $386 million. The EEOC's role in enforcing civil rights employment laws has never been more important, as women's employment and financial security is on the line. A well-funded EEOC means that the Equal Pay Act and Title VII of the Civil Rights Act – laws which made big strides toward eliminating sex-based employment discrimination – will continue to have teeth.
Department of Education – Office for Civil Rights
OCR serves the vital mission of ensuring equal access to education, including enforcement of the Title IX protections in federally funded education programs and activities. Proposed funding for OCR increased by approximately $5 million over current levels. This funding is much needed, as OCR handled a record number of complaints in 2010 – a 9 percent increase over the 2009 number. The 2012 budget provides additional staff to help accommodate this demand for enforcement. It will also provide OCR with the resources it needs to provide technical compliance assistance to schools, parents, and students.
Department of Education – Training and Advisory Services
Proposed funding for Training and Advisory Services stayed level. These funds support ten regional Equity Assistance Center grantees, which help provide school districts with the services and information about race, sex, and national-origin discrimination that they need.
Health & Human Services – Office for Civil Rights
The budget for HHS OCR increased by approximately $9 million over current levels. By enforcing civil rights laws in health and social service programs, OCR helps ensure women's rights to nondiscrimination in health care and in services such as adoption, foster care, and TANF.
Department of Labor – Civil Rights Center
Funding for the Civil Rights Center remained level. The budget will support CRC's and the Secretary of Labor's goal of "good jobs for everyone" by continuing to enforce anti-discrimination laws in the programs the DOL funds and conducts and within DOL itself. The CRC's programs help ensure that the millions of women will not be victims of discrimination.
Department of Labor – Office of Federal Contract Compliance Programs
Funding for OFCCP, which is responsible for enforcing nondiscrimination and affirmative action in federal contracts, increased by about 3.8 percent. OFCCP is pursuing a "transformative strategy" of worker education, compliance reviews, and complaint investigation, and these funds will allow broader enforcement, beyond systemic low-wage hiring discrimination cases, and more comprehensive and timely compliance reviews. OFCCP's role is essential to ensuring that women will receive their fair share of jobs with government contractors – including American Recovery and Reinvestment Act contractors – during tough economic times.
Department of Justice – Civil Rights Division
Funding for the Civil Rights Division increased by about $16 million. The Civil Rights Division enforces numerous laws that are important to women, including Title VII, Title IX, and the Freedom of Access to Clinic Entrances Act. For FY 2012, the Civil Rights Division plans to focus resources on housing and lending discrimination; voting rights; hate crimes, and employment discrimination, all programs critical to ensuring that DOJ can help women get fair housing, fair lending, and fair job opportunities.
Office on Violence Against Women
Funding for the Office on Violence Against Women (OVW) increased by $32 million. In addition to administering justice and victims' services, OVW administers nineteen federal grant programs and provides federal leadership and technical assistance in implementing the Violence Against Women Act. Funding for OVW also supports several special programs, including youth-oriented programs, sexual assault services, transitional housing for victims of domestic violence, victims' legal assistance, and training for courts.
Tax Benefits for Working Families
The President's budget proposes to make permanent improvements in tax benefits for households with incomes below $250,000 and to expand the Child and Dependent Care Tax Credit, while allowing tax cuts for the wealthiest households to expire (see Tax Reform).
The budget would make permanent provisions of the 2001 to 2003 tax cuts that benefit households with incomes below $250,000 ($200,000 for individuals) which were extended through 2012 under the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. These include an increased Child Tax Credit, marriage penalty relief, reductions in tax rates for households with incomes below $250,000, and improvements in the Child and Dependent Care Tax Credit.
The budget would make permanent a number of refundable tax credits created or expanded in the American Recovery and Reinvestment Act which also were extended through 2012. These include the reduction in the earnings threshold for the refundable Child Tax Credit, which increases this credit by about $1,500 for a full-time, minimum wage worker with two children; the increase in the Earned Income Tax Credit for families with three or more children, worth up to $630; additional marriage penalty relief in the EITC; and the newly refundable American Opportunity Tax Credit for higher education expenses, which replaced the Hope Scholarship Credit.
The budget would increase the Child and Dependent Care Tax Credit for families earning up to $103,000. Families earning up to $75,000 would be eligible for a tax credit equal to 35 percent of claimable child care expenses, with the percentage phasing down to 20 percent for families earning $103,000 or more. For a family with two children earning $50,000, the change would increase the maximum credit from $1,200 to $2,100. However, the proposal would not make the credit refundable, so families with little or no federal tax liability would continue to receive little or no benefit.
Safety Net Programs
While recent months have seen some signs of economic recovery, job growth has largely left women behind, and the poverty rate is expected to climb above 15 percent, with one in four children living in poverty. At the same time, states facing ongoing budget shortfalls are likely to continue cutting deeply into supports for vulnerable people. While the President's budget proposes some much-needed increases in assistance for people in need, it also proposes some painful cuts, especially to low-income energy assistance and the Community Services Block Grant. Indeed, the cuts in the President's budget to these programs are deeper than in H.R. 1.
Supplemental Nutrition Assistance Program (SNAP)/Food Stamps
The President's budget increases funding for Supplemental Nutrition Assistance Program (SNAP)/Food Stamps, a program that feeds nearly 45 million people each month, helping families put food on the table and stimulating local economies. The budget proposes to increase overall funding for SNAP by $4.291 billion compared to current levels (excluding ARRA), a boost that will expand coverage and restore the SNAP benefits that were cut in the child nutrition reauthorization.
Women, Infants, and Children (WIC)
The President's budget boosts support for the Women, Infants, and Children (WIC) program, which provides nutritious food to 9.6 million low-income pregnant women, new mothers, and young children each month. The budget increases funding for WIC by $138 million compared to current levels.
Under H.R. 1, WIC funding would be cut by $747 million.
Temporary Assistance for Needy Families (TANF)
The Temporary Assistance for Needy Families (TANF) program is a block grant to states to fund cash assistance, work supports, and other services for low-income children and parents. In FY 2010, approximately 1.85 million families– the large majority headed by single mothers – received TANF assistance. The budget reflects an increase in the TANF contingency fund from the FY 2011 level of $334 million to $612 million in FY 2012 (the amount already appropriated by Congress).
However, the President's budget does not propose a change in funding for the basic TANF block grant, which has not increased since the program was enacted in 1996. Nor does the President's budget include renewed funding for the TANF Emergency Contingency Fund. This highly successful program, created by ARRA, helped states create nearly 250,000 subsidized jobs and respond to growing needs in FY 2009 and 2010–before Congress allowed it to expire on September 30, 2010. However, the budget does state: "When TANF reauthorization is considered, the Administration would be interested in exploring with Congress a variety of strategies to strengthen the program's ability to improve outcomes for families and children, including helping more parents succeed as workers by building on the recent successes with subsidized employment…."
Low-Income Home Energy Assistance Program (LIHEAP)
LIHEAP helps millions of low-income households, mostly single mother families and elderly women, afford to heat and cool their homes in extreme weather conditions. LIHEAP has been able to respond to growing need, from serving approximately 7.7 million households in FY 2009 to an estimated 8.9 million in FY 2011, thanks to an increase in program funding from $2.57 billion in FY 2008 to $5.1 billion in FY 2009, FY 2010, and FY 2011.
The President's budget proposes a drastic 50 percent cut to LIHEAP, returning to the FY 2008 level of $2.57 billion (which includes a $590 million contingency fund). Although home energy prices have declined since FY 2009, price forecasts from the Department of Energy indicate that home energy prices in the winter of 2012 will be similar to their levels in the winter of 2008 and higher than in any year since, while the poverty rate is expected to be substantially higher than in 2008. An estimated 3.1 million households will lose LIHEAP assistance if the President's proposal is enacted. The LIHEAP cut proposed in the President's budget is deeper than in H.R. 1, which would cut $390 million from the $590 million LIHEAP contingency fund but not cut core program funding.
Child Support Enforcement Program
The child support enforcement program serves one in four children – more than 17 million – and distributes about $24 billion in child support to families annually. Child support represents 40 percent of family income for poor families who receive it, and the Congressional Research Service estimates that it reduces the poverty rate for children in these families by nearly 25 percent. Among other proposals, the President's budget proposes an important initiative to increase child support for families. It would encourage states to give more of the child support noncustodial parents pay on behalf of children receiving TANF to the family, rather than retaining the money to reimburse welfare costs.
The budget allocates an additional $1 billion over 8 years in support of this initiative, including a $454 million, five-year pool of additional funds for states that adopt the reforms. Unfortunately, this budget does not propose to restore the federal match for reinvested incentive funds that were cut by the Deficit Reduction Act and restored for FY 2009 and 2010 by ARRA. Instead, the budget proposes a two-year increase in the incentive pool that would restore only about one-third of that funding. Thus, states will have less federal support for core child support enforcement services in FY 2012 than they had in FY 2010, making it more difficult to maintain services and implement new initiatives.
Administration on Aging (AoA)
The Administration on Aging (AoA) supports a broad range of program activities for older Americans and their caregivers, including home and community-based supportive services, caregiver support services, nutrition services, prevention of elder abuse and neglect, and programs to modernize long-term care and expand access to services. AoA programs serve approximately 11 million seniors and caregivers annually. These services are especially important to women, who are over two-thirds of the elderly poor.
The President's budget requests $2.238 billion for the Administration on Aging in FY 2012, effectively a 6.6 percent decrease from current levels. (Although the overall AoA budget appears substantially larger than in previous years, this primarily reflects the transfer of the Senior Community Services Employment Program from the Department of Labor to AoA – and the President's FY 2012 funding request for this program is $450 million, $375 million less than current levels.) While some programs administered by the AoA would see lower funding, the budget also includes substantial increases in areas such as home and community-based supportive services (+ $48 million) and caregiver support services (+ $48 million).
H.R. 1 proposes to cut $71 million from the Administration on Aging for the remainder of FY 2011 and $525 million from the Senior Community Services Employment Program. If we combine these programs (as the President's budget does), this amounts to a 24.9 percent cut of nearly $600 million relative to current funding levels of $2.389 billion.
Housing Choice Voucher Program
The Housing Choice Voucher program provides core rental assistance to over two million vulnerable families, a large majority of which are headed by women. The President's budget proposes an increase of $1.039 billion, which would help more families with very low incomes retain and obtain decent, safe, and sanitary housing.
H.R. 1 cuts more than $100 million from the Housing Choice Voucher program, putting women and families at risk.
Housing for the Elderly
The President's budget would cut the Housing for the Elderly program (Section 202), whose recipients are 90 percent women, by $68 million from the current funding level of $825 million.
Community Development Fund (CDF)
The Community Development Fund (CDF) would be cut by nearly 15 percent ($646 million) under the President's budget. Ninety percent of CDF funding went to the Community Development Block Grant (CDBG) in FY 2011, which supports housing rehabilitation, job creation and retention, child care, and other services.
H.R. 1 would make a far more drastic cut in CDF funding, reducing it by more than two-thirds ($2.95 billion).
Community Services Block Grant (CSBG)
The Community Services Block Grant (CSBG) provides assistance to states and localities through a network of CSBG-eligible community-based organizations. CSBG-funded entities help reduce poverty and revitalize communities by providing a broad range of programs and services to low-income Americans, including emergency services and programs to support education, employment, housing, nutrition, and health. In FY 2008, CSBG-eligible entities provided services to nearly 16.4 million individuals in 7.1 million low-income families.
The President's budget cuts funding for CSBG by half, from the current $700 million level to $350 million in FY 2012. The budget proposes to expand oversight and introduce a competitive grant process with the goal of directing program funds to high performing CSBG-eligible organizations.
H.R. 1 would cut funding for CSBG by $306 million, not quite as much as the President's budget.
Social Services Block Grant (SSBG)
The Social Services Block Grant (SSBG) provides funds to states that may be used to support a range of social services – such as child care, services for people with disabilities, protective services, transportation, and housing assistance – based on the needs of the population within the state. In 2008 (the last year for which federal data is available), nearly 25 million people, including 11 million children, received services supported by the SSBG program. The President's budget maintains the current funding level of $1.785 billion for SSBG in FY 2012.
Violence Against Women
Although crimes of domestic and sexual violence are highly underreported, studies have found that approximately one in four women will experience domestic violence in her lifetime, and one in six women will be a victim of rape or sexual assault. During the recession, family economic pressures have escalated intimate partner violence and made it more difficult for women to leave abusive situations. Meanwhile, several states, their own budgets tight, have cut funding for shelters, hot lines, counseling, and legal assistance even as demand increased. At this critical time, the President's budget proposes increased funding for services to combat violence against women.
Sexual Assault Services Program
The budget increases funding–to $35 million–for the Sexual Assault Services Program, which provides crisis intervention, criminal justice advocacy, and support during forensic exams.
Civil Legal Assistance and Law Enforcement
Funding for civil legal assistance for victims of domestic violence and sexual assault would be maintained, for a total of $50 million.
The budget includes funding to better equip law enforcement and health care workers to deal with cases of sexual assault. This funding includes $5 million for pilot programs to help law enforcement agencies reduce the backlogs of unprocessed rape kits, $7.5 million for training law enforcement officers on DNA evidence, and $7.5 million for Sexual Assault Nurse Examiners Grants.
Shelters and Emergency Housing
Recognizing that access to safe spaces such as shelters and emergency housing is important to victims of domestic violence, the President proposes using $100 million of the $195 million increase in the Crime Victims Fund to provide emergency and transitional housing as well as allocating $135 million to the Department of Health and Human Services (HHS) to help fund battered women's shelters.
Domestic Violence Hotline
The budget also includes $4.5 million for the domestic violence hotline, an important resource for victims of domestic violence as well as their friends and families.
Social Security and Retirement
Achieving a secure retirement was already more difficult for women than men because of women's lower lifetime earnings and longer lifespans, and the recession has made it even harder. The value of retirement savings and homes has dropped, traditional pensions are disappearing at an accelerated rate, many employers have cut back or eliminated contributions to workplace savings plans, and jobs are harder to find for those who seek to remain in or return to the workforce. Social Security remains the foundation of a secure retirement, especially for women – but its benefits are modest, averaging only about $12,000 for older women, and even with Social Security, one in every nine older women is poor.
Social Security Benefits
President Obama's budget does not propose changes to Social Security benefits. It recognizes that "Social Security does not face an immediate crisis and is not driving our short-term deficits or long-term debt," and calls on Congress to work in a bipartisan fashion to strengthen Social Security for the future. The budget articulates six principles for reform, including that reform should "strengthen retirement security for the most vulnerable, including low-income seniors," and not "slash benefits for future generations" or "privatize or weaken the Social Security system."
Social Security Administration
The President's budget provides $12.5 billion for the operation of the Social Security Administration, an increase of $1 billion above current funding levels, to enable it to serve the increasing number applications from baby boomers reaching retirement age and reduce the backlog of disability applications.
H.R. 1 cuts funding for the Social Security Administration by over $600 million dollars. These cuts could force thousands of layoffs and furloughs in offices across the country, delaying the processing of applications for Social Security and Medicare benefits.
$250 Economic Recovery Payments
The President's budget would provide $250 Economic Recovery Payments in 2012 to recipients of Social Security, Supplemental Security Income, and certain other benefits.
The President's budget proposes to require employers in business for at least two years with more than 10 workers who do not offer retirement plans to offer an automatic IRA (Individual Retirement Account) option to which contributions could be made by payroll deduction. Employees would be automatically enrolled, but could choose to opt out or increase or reduce their contributions. Employers could claim a temporary tax credit for establishing auto-IRAs. The proposal may expand retirement savings, but it is unclear how much it would increase retirement income for lower-income workers, especially women.
Years of tax policies that have disproportionately benefited higher-income Americans and corporations have left the country with a tax code that is both unbalanced and insufficient to meet national needs.
The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 included an extension of emergency unemployment insurance benefits and improved tax credits for working families. But the price demanded for this urgently needed help – tax cuts for the very wealthy – was outrageously high.
Tax provisions in the President's budget would provide tax benefits to working families while allowing provisions of the 2001 and 2003 tax cuts that benefit only the wealthiest households to expire, trimming some tax expenditures and closing some tax loopholes.
The tax proposals in the President's budget would raise federal revenues to 17.9 percent of GDP in 2013--about the same level as under President Reagan. The net revenue raised by these proposals would contribute about one-third of the $1.1 trillion in savings achieved by the budget over the next 10 years, with the rest of the burden of deficit reduction placed on cutting spending other than tax expenditures. Yet even these modest proposals are likely to meet intense opposition in Congress.
Bush-Era Tax Cuts
The budget proposes to allow many of the Bush-era tax cuts for couples making more than $250,000 per year (or individuals making more than $200,000) to expire after the end of the recent two-year extension through December 31, 2012. The 39.6 percent and 36 percent top tax rates would be reinstated after 2012, and the 28 percent tax bracket would be expanded. Limitations on personal exemptions and itemized deductions would also be reinstated.
The budget would reinstate the estate tax at the 2009 rates and exemption levels – 45 percent and $3.5 million for individual decedents or $7 million for couples -- after the current two-year rate of 35 percent and $5/10 million exemption level expire at the end of 2012 and would make portability of unused exemption amounts between spouses permanent.
Capital Gains and Dividends
In 2003, the maximum tax rate on long-term capital gains was reduced from 20 percent to 15 percent. The maximum rate on dividends, which had been taxed as ordinary income, was also reduced to 15 percent. The Obama administration is proposing that couples with incomes above $250,000 (and individuals with income above $200,000) be subject to a maximum tax rate of 20 percent on both capital gains and dividends. Lower rates would remain in effect for lower-income taxpayers.
Itemized Deductions and the AMT
The budget would limit the tax subsidies the wealthiest taxpayers get from itemized deductions to 28 percent. For example, under current law, a wealthy taxpayer in the 35 percent tax bracket who makes a $1,000 charitable contribution gets a tax savings of $350. A middle-income taxpayer in the 15 percent tax bracket who makes the same $1,000 contribution gets a tax savings of only $150. The proposal would reduce the tax subsidy for taxpayers with incomes above $250,000 for a couple ($200,000 for an individual) to 28 percent. This proposal would raise about $321.3 billion over 10 years to offset a three-year patch to the Alternative Minimum Tax (AMT) that would prevent millions of Americans from being subject to the AMT.
Financial Crisis Responsibility Fee
The budget would impose a new "financial crisis responsibility fee" on the largest firms in the financial sector (those with assets in excess of $50 billion) to recoup the costs of the Troubled Asset Relief Program (TARP) and discourage excessive risk-taking, as the combination of high levels of risky assets and less stable sources of funding were key contributors to the financial crisis. The fee would be assessed against excess liabilities (generally, liabilities less deposits, in the case of a bank) at the rate of 7.5 basis points (0.075 percent) and would raise an estimated $30 billion over 10 years.
International Tax Reform
The budget includes international tax reform proposals that target corporate tax avoidance, reduce incentives for corporations to shift jobs and profits offshore, and crack down on tax havens where corporations and wealthy individuals evade taxes. These proposals would raise $129.2 billion over 10 years.
The budget proposes to eliminate fossil-fuel preferences that impede investments in clean energy sources and undermine efforts to deal with climate change. Closing tax loopholes and eliminating tax breaks for oil, gas, and coal companies would raise just over $46 billion over 10 years.
Private Investment Fund Manager Loophole
The President's budget proposes to close the tax loophole that currently allows multi-millionaire managers of private investment funds to pay a lower tax rate on their compensation than ordinary working Americans by reporting "carried (profits) interests" as capital gains income rather than as ordinary income. The proposal is estimated to raise $14.8 billion over 10 years.
When employees are misclassified as independent contractors, they are deprived of workplace benefits and protections to which they are legally entitled. Misclassification also has a budgetary impact, reducing employment tax revenue, including Social Security, Medicare, and Federal Unemployment Tax Act receipts. The President's budget calls for legislation to enhance the ability of the IRS to reclassify workers for employment tax purposes. The proposal would increase revenues by $8.7 million over 10 years.
Repealing 1099 Requirement
Generally, a business making payments of $600 or more to one recipient in a calendar year is required to send an information return, Form 1099, to the Internal Revenue Service (IRS) with the amount paid and the name and address of the recipient. Under longstanding IRS regulations, there were exceptions for payments to corporations and payments to anyone for goods. Effective for payments made after December 31, 2011, the Affordable Care Act expanded the information reporting requirement to include payments to a corporation and payments for property. The President's budget would repeal the additional information reporting requirements imposed by the Affordable Care Act. Further, the proposal would require businesses to file the Form 1099 information return for certain payments to corporations for services. Compared to current law, this provision would cost $9.2 billion over 10 years.
Corporate Tax Reform
The budget would begin the process of corporate tax reform by closing some loopholes and simplifying other provisions. But the budget proposes to use the savings to lower the tax rate for corporations rather than contribute to deficit reduction.