State and local governments could lose $71 billion in federal grants over the next five years for education, housing, transportation and other domestic programs if Congress approves President Bush's proposed 2006 budget, a new study estimates.
Hardest-hit would be large, populous states that draw the lion's share of federal grants. California could lose up to $10 billion over the next five years under the Bush plan, New York -- $6 billion, Texas -- $4 billion, and Florida and Pennsylvania $3 billion each, according to state-by-state projections issued Feb. 22 by the Center on Budget and Policy Priorities (CBPP), a Washington, D.C., group that focuses on policies that affect the poor.
States would forfeit another $143 billion in federal funds for veterans' health care, parks, research, law enforcement and other programs under the president's budget package, the center said.
The president's budget proposal, unveiled Feb. 7, lays out his spending priorities for fiscal 2006, which begins Oct. 1. Under Bush's plan, most federal agencies and programs would be scaled back except for defense and homeland security in a bid to plug this fiscal year's estimated $427 billion deficit brought on by U.S. spending for wars in Iraq and Afghanistan and tax cuts. The Republican-controlled Congress will have final say on how the federal government spends taxpayers' money.
Robert Greenstein, executive director of the center, said the administration is proposing "the deepest cuts in recent memory" affecting domestic programs, noting that the president wants to "lock in" the cuts by passing a law capping federal spendng at the lower levels for each of the next five years.
Sharon Parrott, director of welfare reform and income support at the center and the report's lead author, said, "The pain in the budget comes mostly after 2006, with the cuts growing deeper with each passing year." She added that states would have "enormous problems backfilling" the cuts. To cope with the large drops in federal funding, she predicted that states and localities would have to choose between reducing services markedly and raising taxes.
Conservative groups, however, laud Bush's budget-cutting plan. The Heritage Foundation disputed any notion that the administration is trying to reduce the budget deficit on the backs of the poor. "The president's budget does not disproportionately single out these [anti-poverty] programs, which will continue to have sufficient funds to carry out their missions," the Heritage's Brian M. Riedl wrote in a recent memo. Duane Parde, executive director of the American Legislative Exchange Council, made up of conservative state lawmakers, said recently, "The president's proposed budget does not reduce spending at the expense of states." Parde called the president's budget "a positive first step."
The CBPP report includes state-by-state estimates of the president's proposed budget cuts through 2010 in a variety of areas, including elementary and secondary education, children and family services and low-income energy assistance programs.
The center's numbers are based on data the administration provided to Congress. The center said the projections are rough because the administration did not clearly lay out which programs would be cut and by how much for each of the next five years.
The center's state-by-state figures are based on the assumption that each state would receive the same percentage of a program's funding in 2006-2010 as the percentage that the state gets in 2005. So for example, if a state now gets 5 percent of the funding for a program, the study assumes that the state would bear 5 percent of a cut if the program's funding level were reduced.
The center looked at social programs outside of "entitlement" programs such as Medicaid, the health care program for the poor and disabled that states and the federal government jointly sponsor.
Here's a sampling of how the president's budget might affect some states over the next five years: