Tuesday, August 02, 2011

Generations United's Official Statement On The Budget Control Act

Generations United acknowledges that by passing the Budget Control Act, Congress and the President have taken a necessary step to avoid our nation’s default. As a fiscally responsible nation, we have a duty to both balance our budget and pay back those from whom we have borrowed in a responsible manner. Unfortunately, the debate in Washington seemed to devolve into a manufactured crisis over the federal government’s authority to borrow. As with any compromise, there's good news and bad news.
Generations United supports fiscal discipline and raising the debt limit to ensure that our nation satisfies its obligations, so long as it is done in a responsible way that does not do so on the backs of our nation’s most vulnerable children, youth, and older adults. The Budget Control Act is not perfect. It does however provide important certainty to our economy at a fragile moment by increasing the debt limit by at least $2.1 trillion, eliminating the need for further increases until 2013 and allowing the government to avoid a historic default. The Act also contains some important provisions that reduce the threat to programs and services vital to children, youth, and older adults.
However, the Budget Control Act’s new joint committee and trigger leave room for cuts that could endanger the economic security of young and old alike. Generations United urges the new joint committee members to take this opportunity to protect the young and old now and invest in our future by supporting proposals which would provide adequate revenue to address the needs of our citizens and opposing proposals which would deny individuals, young and old, access to vital programs while giving tax breaks to the wealthy, protecting corporate tax subsidies, and shifting the burden to the middle class.

The Debt Deal: How it Could Impact Children, Youth, and Older Adults 

The Budget Control Act has two distinct stages. In the first stage, the debt limit will be raised in conjunction with more than $900 billion in spending cuts over the next ten years. In this phase, the Act contains some important provisions that reduce the threat to programs and services vital to children, youth and older adults

However, in the second stage, the risk of cuts to programs critical to the health and welfare of children, youth, and older adults increases. In this phase, an additional $1.5 trillion in budget reductions will be determined by a new joint bi-partisan committee of Congress, who can recommend revenues and cuts as part of its deficit reduction plan. Their recommendations are due by November 23. There are no specific protections for programs to children, youth, and older adults in this phase.

To reach an additional $1.5 trillion in cuts, the joint congressional committee could cut spending to intergenerational programs, such as the following:
  • Education and Early Care: Head Start, child care, including the Child Care Development Block Grant (CCDBG), and K-12 education
  • Safety-Net Programs: Social Security (ex. by reducing the annual cost of living adjustment, raising the retirement age), Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps), Temporary Assistance for Needy Families (TANF)
  • Tax Credits: Earned Income Tax Credit (EITC) & Child Tax Credit (CTC)
  • Health Care: The joint congressional committee will have authority to recommend cuts to Medicare and Medicaid, as well as cuts to funding meant to assist states in implementing the ACA. Not only would this affect Medicare and Medicaid beneficiaries directly, but by reducing or eliminating funding necessary to implement the ACA, these cuts could undermine the ACA’s ability to reach its ultimate goal of providing affordable health insurance coverage to all Americans.

If the committee’s recommendations are not enacted, a budget “trigger” will kick in, imposing mandatory across-the-board spending cuts matching the size of the debt ceiling increase.

If the joint congressional committee does not come to an agreement or Congress fails to enact recommendations made by the committee, then across-the-board cuts would be implemented (50% domestic, 50% military).
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