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Impact of Republican "So Be It" Spending Bill

In addition to destroying 800,000 jobs and weakening our economic growth, the Democratic staff of the House Appropriations Committee prepared the report below that describes some of the worst cuts in the GOP 'So Be It' spending bill, passed by the House on February 19th.  Some of these cuts would hinder our ability to ensure the safety of our food, rebuild America, secure our nation and educate our children.

Republicans are planning to introduce short-term Continuing Resolution that mirrors these irresponsible cuts.  Democrats are committed to reducing the deficit, beginning with an aggressive attack on waste, fraud, and abuse.  We have offered a responsible way forward to avoid a shutdown - a short-term continuing resolution that preserves the $41 billion in cuts already on the books while we negotiate a bill that the President will sign. We can cut spending without sacrificing jobs or weakening our economy.  Republicans should join us.

AGRICULTURE

  • Food and Drug Administration: The Republican proposal cuts FDA funding by $241 million below 2010 and $400 million below the Administration's 2011 budget request.  This would lead to furloughs and/or RIFs of hundreds of FDA staff including those who inspect our domestic and imported foods.  It would also lead to a sharp reduction in the number of samples of food and medical products coming into our country from overseas.
  • Safety of our meat and poultry:  the Republican CR funds the Food Safety and Inspection Service, which is responsible for the safety of meat and poultry, at exactly the 2008 level.  This is $88 million below the CR and $107 million below the 2011 President's budget.  USDA says this would mean furloughing the federal inspectors in slaughter and processing plants.  Since plants cannot operate without inspectors, the plants would have to close their doors.  USDA estimates those plants would have to shut down for six to nine weeks. This will hurt the plants, the economies in their towns, the workers, producers and consumers, as prices rise.  USDA estimates an economic loss of $11 billion.

COMMERCE, JUSTICE, SCIENCE

  • Overall, the CR cuts funding for DOJ State and Local grants (including COPs, the Office of Justice Programs and the Office of  Violence Against Women) by over $1 billion, or 27%.  Such a reduction would have significant impacts on criminal justice activities and law enforcement operations and personnel across the country. It would translate into 3,838 fewer criminal justice jobs.
  • Within the State and local activities grants, the CR guts the State and Local Law Enforcement Assistance account by $581 million (or roughly 38 percent) compared to the current level.  The programs funded in this account include the Byrne-JAG formula grant program; the State Criminal Alien Assistance Program; the Second Chance Act  program, Drug and Mental Health Court grants; Tribal grants; border prosecution grants; and National Instant Criminal Background Check (NICS) grants.
  • The CR provides $232.5 million for DOJ Juvenile Justice grants, a cut of $191 million (45 percent).  The JJ account includes funding for youth mentoring; block grants and formula grants to states; delinquency prevention grants; child abuse investigation and prosecution grants; and Community-based Violence Prevention.

ENERGY AND WATER

  • This bill cuts nearly $1.4 billion from Science and ARPA-E at the Department of Energy. This cut will result in the loss of approximately 5,400 jobs. Federally supported basic research has been a reliable source of new knowledge and new products. However, a $1.1 billion cut to the Department of Energy's Office of Science would significantly curtail fundamental research in areas of science that are a key to our nation's prosperity and to preserving America's place as the world leader in science and technology. A further cut of $250 million to the newly established ARPA-E program will severely curtail a program that has shown promise in leveraging private funding for cutting edge science. In 2006, President Bush made a commitment to double the budget for science over a decade. The commitment to double funding for research and development in science and technology was a response to stark warnings from a group of government experts and business leaders that warned in their report, known as Rising Above the Gathering Storm, that the “scientific and technological building blocks critical to our economic leadership are eroding at a time when many other nations are gathering strength.”  President Obama has maintained this commitment and the America Competes Act, which passed with bipartisan support, authorized the continued growth of the budgets of these agencies. The proposed cut would be a major setback to U.S. leadership in science and technology.
  • Corps of Engineers and Bureau of Reclamation: This bill would cut $816 million for the water infrastructure accounts relative to FY 2010 levels and would result in the termination of more than 350 ongoing projects. In the years following Hurricane Katrina, we spent more than $14 billion on reconstructing the flood protection in New Orleans, nearly three times the annual budget of the Corps of Engineers. This expenditure was necessary because we had not made the proper initial investments in that community to start. As we examine what cuts to make, let's ensure that we continue to make wise investments now to avoid expensive rebuilding efforts later. This bill does not make smart investments.  The American Society of Engineers have given our locks, dams and levees D/D- grades, reducing the level of investment in these areas is penny-wise and pound foolish. Further, section 3001 will rescind $163 million in funds (not reflected in the cuts above) required to oversee ongoing construction projects, likely resulting in the termination of some projects to pay termination costs on others.
  • Nonproliferation: President Obama's 2009 announcement of “a new international effort to secure all vulnerable nuclear material around the world within four years” has placed NNSA's nuclear nonproliferation programs in the global spotlight. The President's request included $2.7 billion- this bill cuts $648 million in defense funding from that level, unnecessarily increasing the likelihood that bomb-grade material falls into the hands of those hostile to the United States.
  • Weapons:President Obama has committed to maintaining a safe, secure and reliable nuclear deterrent. This bill reduces the President's request and the current CR by $312 million compromising our ability to make needed investments to rebuild aging infrastructure, both facilities and personnel. The President has made a commitment, partially at the insistence of Republicans, to invest more than $84 billion over the next decade to modernize the nation's nuclear weapons complex and perform warhead life extension programs.

INTERIOR AND EPA

  • Gutting communities' ability to provide clean water and safe drinking water: The Republican bill slashes the clean water and drinking water state revolving funds by 56 percent, reducing the number of wastewater and drinking water projects communities could finance by approximately 750 nationwide.   The Republican EPA Administrator under President George W. Bush, Christine Todd Whitman, estimated that the needs of our nation's aging water infrastructure topped $660 billion.  This would also be a missed opportunity to add an estimated 54,000 engineering, construction and other support service jobs by cutting these programs. Additionally the bill includes an undesignated $300 million rescission to EPA that will most likely impact the revolving funds or other State and Local assistance.
  • Funding limitations that stop EPA from limiting greenhouse gas emissions from stationary sources, such as power plants and refineries.  EPA has found that these emissions have serious consequences to human health, so not only will this language impact human health, it will further contribute to climate change and the loss of private sector jobs. EPA would be blocked from issuing valid permits, which would throw all attempted large, job-creating construction projects across the country into great uncertainty. The litigation uncertainty would cause the cancellation of countless projects and eliminate thousands and thousands of American jobs. 

FINANCIAL SERVICES

  • Securities and Exchange Commission - $1.07 billion proposed, $189 million below the President's budget request and $41 million below the current CR level, which leaves the regulatory agency with fewer staff to investigate potential misconduct and police securities markets to prevent another financial crisis.  Further, this level will not allow the implementation of the Dodd-Frank Act, meaning that hedge funds, credit rating agencies, and broker-dealers will continue to operate without regulation, therefore increasing the risk of another fiscal meltdown.
  • Judiciary (Salaries and Expenses) - $4.521 billion, $150 million below the President's request and $476 million below the current CR level.  Cuts to the Judiciary will force the federal courts to lay off more than 2,400 support staff and stop payments to attorneys who represent indigent criminal defendants.  These layoffs will include probation officers and pre-trial staff, therefore, there will be fewer probation officers to monitor sex offenders and felons, perform law enforcement duties, and protect the general public.
  • Special Inspector General for TARP (SIGTARP) - $36.3 million, $13 million above the President's request, but $13.3 million below the current CR level.  TARP consists of 13 implemented programs.  Because TARP investment authority expired on October 3, 2010, no new obligations may be made with TARP funds, however, dollars that have already been obligated to existing programs may still be expended.  Of the total amount given to TARP, $160 billion remains outstanding (spent, but out there), and an additional $59.7 billion available to be spent. SIGTARP's investigative efforts have helped prevent $555.2 million in taxpayer funds from being lost to fraud.  They have already charged 45 individuals civilly or criminally with fraud, of whom 13 have been criminally convicted.  They have 142 ongoing investigations (including 64 into executives at financial institutions that applied for and/or received TARP funding) - more remains to be done.

HOMELAND SECURITY

  • State and local grants.  After restoring the $510 million cuts to the firefighter grants on the floor through amendment, FEMA's grant programs were reduced by 30 percent in HR 1.  Funding for many of these grants has never been lower.  There is no funding for:
  1. Interoperable communications (-$50 million),  a program that provides funding to states, territories, and local and tribal governments to improve interoperable emergency communications, including communications in collective response to natural disasters, acts of terrorism, and other man-made disasters.
  2. Buffer zone protection grants (-$50 million), a program that provides grants to enhance security around critical infrastructure and key assets, including chemical facilities, financial institutions, nuclear and electric power plants, dams, stadiums.
  3. Regional catastrophic preparedness (-$35 million), a program to enhance catastrophic incident preparedness in selected high-risk, high-consequence urban areas and their surrounding regions.
  • Other grants within FEMA's State and Local program have been substantially reduced.  For example:
  1. Both port and transit grants are cut 66 percent from the 2010 level (-$200 million each)
  2. The urban area security grants which fund security in high-risk/high threat cities was reduced by 10 percent (-$87 million)
  3. State homeland security grants that fund each state's security needs was cut by 10 percent (-$110 million) when you take into account carveouts that they did in the basic program for new activities for the driver's license security grants and Citizen Corps that previously received separate grant dollars ($50 million and $12 million respectively in 2010)
  4. Over-the road bus security was reduced by 58 percent (-$7 million).
  • Security funding to protect the federal infrastructure from cyber attacks is cut by 15 percent below the 2010 level, leaving us vulnerable to the latest cyber intrusions from overseas.
  • TSA Surface Transportation Security.  HR 1 provides $106 million for surface transportation security; $32 million (23 percent) below the 2011 request and slightly below the 2010 level (-$4million).  Such a cut would stop in its tracks any hiring of rail security inspectors and canine teams proposed in 2011 and the possibility of furloughing onboard inspectors and canine teams for a short time in order to keep all the new hires from the 2010 bill.

LABOR, HHS, EDUCATION

Education

  • Title I Grants to School Districts. The Republican CR cuts nearly $700 million from one of the Federal Government's two major formula programs that provide aid for education to States and localities.  This amounts to a 4 percent cut to Title I below last year's funding level. Title I provides critical federal support to thousands of schools serving nearly 1 million disadvantaged students.  These funds pay for teachers, tutors, and after school programs--this reduction in funding could cause 10,000 teachers and aides in these struggling schools to lose their jobs.
  • Head Start. Head Start is providing comprehensive early childhood services to almost one million low-income children and their families. The cut of $1.1 billion, or 14 percent, below the FY2010 appropriation and more than $500 million below FY2008, would translate to a massive loss of comprehensive early childhood services, causing nearly 218,000 children across the country to be kicked out of the Head Start program this year (a cut over 20%). This reduction will also put over 55,000 Head Start teachers out of work and close more than 16,000 Head Start and Early Head Start classrooms.
  • Striving Readers Comprehensive Literacy. The Republican bill cuts $439 million from Striving Readers - a comprehensive birth through grade 12 literacy program.  This is the only targeted federal literacy funding for teacher professional development and research-based interventions for students who cannot read and write well enough to progress in school. The program supports 114,000 students and 2,900 jobs.  The cut is achieved through a rescission of $189 million from balances currently available for the program, combined with zero new appropriations for FY 2011 (compared to $250 million appropriated in FY 2010).
  • After-School Programs. The Republican CR cuts $100 million from the 21st Century Community Learning Centers program at the Department of Education. This funding supports programs that provide additional time for students, particularly those who attend high-poverty and low-performing schools, to participate in enrichment activities that complement their regular academic program.  Hundreds of thousands of working families nationwide depend on these services for their school age children. The cut produces a 9% reduction in funding which would likely mean that 800 fewer sites could be funded, and some 130,000 to 140,000 fewer children could receive after-school services.
  • Pell Grants and Other Student Aid. The Republican CR cuts the maximum Pell Grant amount from the current level of $5,550 to $4,705 for the coming academic year.  Pell Grants provide the basic foundation of federal student aid and help 9 million students afford to attend college.  The CR also entirely eliminates federal funding ($757 million in FY 2010) for Supplemental Educational Opportunity Grants, which colleges and universities use to assist undergraduates who have the greatest financial needs.  That program assisted about 1.3 million college students last year.

Job Training and Labor Programs

  • Job Training/Employment Services.  The CR includes more than $4 billion in cuts to job training programs.  The basic formula grant programs under the Workforce Investment Act, which received just under $3 billion in regular and advance appropriations in last year's appropriations bill, receive zero funding in the new CR.  The result would be that State and local systems that provide employment and training services to dislocated workers, new entrants into the workforce, and low-income youth would have to begin phasing out their operations entirely this year.  New enrollment in job training would be terminated and would force current participants to leave training programs that are already underway, affecting up to 8 million workers seeking services this year. 
    • Other cuts include a $100 million (44%) rescission from the Dislocated Worker national reserve, and the complete elimination of numerous other programs such as Youthbuild (which received $103 million in FY 2010) and Green Jobs ($40 million in FY 2010). At-risk youth would be hurt further by the $300 million rescission in funding for Job Corps which could result in as many as 10,000 fewer program slots and reduced training at Job Corps centers. 
  • Occupational Safety and Health Administration (OSHA).  OSHA is cut by $99 million (18 percent) below FY 2010.  Its proposed appropriation would actually be $26 million (5 percent) below FY 2008.  As a result, OSHA would have to furlough all of its staff by up to three months, resulting in 8,000 fewer workplace hazard inspections.  In addition, the OSHA appropriation provides up to 50 percent of funding for state workplace safety programs, which currently protect 40 percent of the nation's workers.  States would also be forced to curtail their inspections as a result of the funding cut.  In the current budget environment, some states might decide to turn enforcement responsibilities back to the Federal Government, which would not have the resources to absorb those responsibilities.

Health

  • National Institutes of Health.  The Republican bill cuts appropriations for the National Institutes of Health by $1.6 billion below FY 2010 and $2.5 billion below the President's budget.  This reduction would be a significant setback to research to find and improve treatments for cancer and other diseases.  Many ongoing clinical studies would have to be curtailed and funding for current research grants would have to be cut below planned levels.  The NIH cuts also include complete elimination of the $300 million provided through the NIH budget for the Global Fund to Combat HIV/AIDS, Tuberculosis, and Malaria.
  • Medicare Operations. The Republican bill cuts appropriations for the Centers for Medicare and Medicaid Services by $458 million below FY 2010 and $634 million below the budget request. This amounts to a 13 percent overall reduction from last year and would leave appropriations a bit below their level five years earlier.  Most of these funds are used for review and processing of payments to doctors, hospitals and other providers for services to Medicare patients.  Cuts of this magnitude will cause serious problems for the timely payment of claims (jeopardizing the financial health of some providers), as well as hampering efforts to reduce fraud and abuse in the program.  
  • Family Planning.  The bill entirely eliminates funding for the title X Family Planning program, which received $317 million in FY 2010.  This program helps support family planning and reproductive health services to more than 5 million people annually at 4,500 community-based clinics.  Grantees include state and local health departments, hospitals, community health centers, and private non-profit organizations.  Services provided include the full range of contraceptive services, as well as screening and treatment for sexually transmitted diseases, cancer and HIV screenings, education, and other preventive services.
  • Teen Pregnancy Prevention.  The bill also eliminates funding for the Teen Pregnancy Prevention program (which received appropriations of $110 million in FY 2010).  This program makes competitive grants to public agencies and private non-profit organizations to support evidence-based teen pregnancy prevention efforts.
  • Health Professions and Nurse Training.  The CR cuts the HHS health professions training programs by $57 million or 23 percent below the FY 2010 level.  These programs are primarily designed to expand the number of primary care providers in medically underserved areas.  In addition, the CR cuts a separate group of programs that support training of nurses and scholarships for nursing students by $88 million or 36 percent.

Other Agencies

  • Social Security Operations. The Republican bill cuts funding for operations at the Social Security Administration by $125 million below FY 2010 and $1.057 billion below the President's request. It also rescinds $500 million currently available to Social Security for its information technology needs.  These cuts will severely hamper efforts to keep up with growing workloads and reduce the backlog of pending claims for disability benefits.  At the very minimum, they will force indefinite continuation of the current hiring freeze, which is expected to reduce staffing by about 2,500 at the Social Security Administration and by 1,000 at the state agencies that do initial review of disability applications.  It is quite possible that the hiring freeze will not be sufficient, and furloughs will be required.   In either case, the bill will produce longer waits for service at Social Security offices or on the phone and longer delays in decisions on claims.
  • Corporation for Public Broadcasting. The Republican bill does not provide the traditional advance appropriation for the Corporation for Public Broadcasting and rescinds any unobligated balances from the previously enacted advance appropriation for FY 2011.  The President's budget proposed a $460 million advance appropriation for FY 2013, and last year's bill included a $445 million advance appropriation for FY 2012.  The largest portion of this appropriation is used for direct grants to help support the operation of approximately 1,300 local public television and radio stations throughout the country.
  • Corporation for National and Community Service (CNCS). The Republican CR entirely wipes out this institution, which is the nation's largest grant maker in support of service and volunteering (Americorps, Senior Corps, Learn and Serve) and even leaves it with insufficient funds to shut down its operation. The Corporation engages more than five million Americans in service to their communities - the program participants enable thousands of national and local non-profit organizations, faith-based groups, schools, and municipal agencies to solve tough problems and meet critical local needs.

TRANSPORTATION / HOUSING

  • The bill cancels over $3 billion in high speed rail (51 projects in 22 states) and surface transportation projects (TIGER grants = 76 projects in 40 states) that were awarded with fiscal year 2010 funds.  These projects are estimated to have  created more than 100,000 new construction jobs.   State and local governments dedicated time and resources to submit applications for these programs.  The Federal Government spent time and resources evaluating applications.   All rendered useless by the action of the House majority. 
  • The bill eliminates $150 million in funding for safety and capital improvements on Washington's METRO system that were recommended by the National Transportation Safety Board in light of the June 2009 crash that killed eight passengers and a train operator.  Each year, METRO carries more than 220 million passengers from the local area and visitors from all over the country. 
  • The bill cuts more than $200 million from the Federal Aviation Administration's capital budget delaying on-going development of technologies to modernize the nation's air traffic controller system and further deferring maintenance on already aging facilities.  
  • Public Housing Capital and Operating funds were cut by $1.2 Billion; this will lead to deferred maintenance and an erosion of our investment in public housing.  Currently, there is a deferred maintenance backlog of about $20-30 Billion nationwide.
  • HOPE VI (Public Housing Modernization) funds were zeroed out in the bill and $198 million in unobligated FY 10 balances were rescinded.
  • Choice Neighborhoods, the Administration's proposed successor program to HOPE VI, received no funding in the bill.
  • The Housing Counseling Assistance Program provides a variety of counseling activities to about 300,000 households, and was zeroed out in the bill. HAMP, NSP, and many state and local programs require participation in some form of housing counseling.
  • Homeless Veterans: The Republican proposal would terminate the Veterans Affairs Supportive Housing program that gives homeless veterans rental vouchers.  A recent report from the Department of Housing and Urban Development concluded that there were more than 135,000 homeless veterans - nearly half of whom were living on the street or in abandoned buildings.