Wed, 2012-12-19 14:50

Michigan's Children December 2012


It’s increasingly looking like President Obama and leaders in Congress will be unable to agree to a “grand bargain” before year’s end that would end the fiscal stalemate that grips Capitol Hill. Instead,  we think it’s more likely that a limited down payment on deficit reduction is passed to extend tax cuts for all but top earners and, perhaps, provide for some additional spending cuts.  A delay of the cuts in the sequestration may or may not be part of a short-term agreement.

The “fiscal cliff” talks so far failed to find a way to extend tax breaks for all but top earners, cancel the sequestration cuts to government spending starting in January, reform entitlement programs, and cut additional discretionary spending.

Both sides remain far apart on fiscal cliff talks. Though the administration lowered its request for new revenue from $1.6 to $1.4 trillion, House Speaker John Boehner’s offer, which reportedly refused to cave on raising taxes on the wealthiest Americans, was dismissed by the White House. Obama has said he expects the Republicans to eventually accept an end to tax breaks on the very wealthiest Americans, but the talks have taken on a pessimistic tone.

According to recent estimates, the sequestration would cut spending about $109 billion in the next year, and all but a few exempted programs and services would be cut 8.2 percent across-the-board. By one estimate, to maintain 2012 benefits and services provided by discretionary spending programs for the next ten years would require $350 billion more than the budget caps currently allow due to substantial growth in many programs, including Pell Grants, veterans medical services, assisted housing and public health.  Because the need in so many programs like WIC, Head Start, child care is also a matter of population growth, which is expected to be 10 percent over the next decade, fewer and fewer dollars, adjusted for inflation, will be available for discretionary spending to serve a grow number of children and their families.  The impact of these cuts would be devastating to education, child care, feeding, housing, and other key services and programs for children and families.

Lost in the translation of these macro-budget discussions is the real impact on children.  Our nation’s leaders are the only ones who can demand that children be held harmless by further budget cuts.  In our view, then, no budget deal is better a bad deal for children. You can always connect with your members of Congress using our toll-free number:  1-866-277-7617. Tell them that your number one priority in the budget fight is protecting children!