TANF Stalls Over Child Care Funding, While Congress Proposes Deep Cuts in Domestic Programs and Waits for Hearings on Social Security 

By Mary A. Cooper 

April 15: The House and Senate have passed differing versions of the federal budget for Fiscal Year 2006, each of which would make deep cuts in programs serving low-income and vulnerable people.  The Senate vote was 51-49, with Republican Senators Snowe, DeWine, Voinovich and Chafee and Independent Jeffords joining the Democratic minority in opposition to the measure. The House vote was 218-214. With the votes so closely divided, the conference committee to resolve the differences is likely to be contentious.

The House measure would cut domestic discretionary programs (those for which funds must be appropriated annually, such as education and training, child care, and Head Start) by $216 billion over five years, while the Senate figure is $203 billion. Neither budget resolutions specifies where the cuts will be made; but since both provide less funding than is now available for programs that have rising costs, the results are likely to be devastating. The Senate measure also included provisions for another $129 billion in tax cuts over five years for the wealthy, even though the Finance Committee has not even developed a proposal for new tax cuts.

The House budget resolution includes cuts of $30-35 billion over five years in a group of programs that includes Medicaid, food stamps, foster care, adoption assistance, the Earned Income Tax Credit, Supplemental Security Income, child care, Temporary Assistance to Needy Families (TANF), and child support enforcement. All of these programs serve needy households. Some provide the only income for the nation's poorest families, while others make it possible for low-income people to work their way out of poverty.

The Senate budget resolution does not specifically cut low-income mandatory programs, with one exception. The Senate resolution would require the Agriculture Committee to make $2.8 billion in reductions to programs under its jurisdiction (included in programs under its jurisdiction are food stamps and child nutrition). The House of Representatives cuts in this area total $5.3 billion.

The Presbyterian Church (USA) Washington Office joined with dozens of other state and national faith groups in a letter to Congress stating that "The federal budget*is a document that reflects our values as a nation and what we believe is important for the public and future generations*.We are concerned with the values represented by both budget resolutions that emphasize cuts in spending for services that benefit the poor, children, families, the elderly, people with disabilities, and impoverished communities while extending tax cuts and adding new ones for the wealthy." The letter concludes by calling on Congress "to support policies that reflect the moral values of our country more than the economic comfort of the few."

The 207th General Assembly (1995) of the Presbyterian Church (U.S.A.) passed a resolution that  Call[ed] on the Presbyterian Church (U.S.A.) to encourage Congress and state and local governments to defeat any proposals that base budget or deficit reductions primarily on services provided to children, families, the needy, and the homeless.  (Minutes, 1995, Part I, p. 718)

At press time, the House has delayed naming its members of the conference committee to resolve the differences between the two budget resolutions, apparently out of concern that the negotiations will bog down, allowing Democrats to force votes on specific provisions that could put the majority in an awkward position. Given the closeness of the floor votes, this concern may be well founded. 

TANF Reauthorization

The Senate had been expected to vote in early April on the PRIDE (Personal Responsibility and Individual Development for Everyone) bill, S 667,  approved earlier by the Finance Committee, to reauthorize Temporary Assistance to Needy Families (TANF).  The vote has been postponed pending resolution of a struggle over child care funding. 

The Finance Committee included in its TANF reauthorization bill an increase of $6 billion in child care funding, acknowledging that there has never been enough money available to help the majority of eligible families purchase safe care for their children while the parents were at work.  Since the Senate and House bills both increase the number of work hours required for families to continue to be eligible for TANF benefits, it was obvious to the Senators that expanded access to child care subsidies was needed.  Unfortunately, child care falls within the category of programs for which significant cuts were ordered in the Senate budget resolution.  If the increase in the TANF bill is eliminated, it is likely that some Republican Senators will not support the bill, putting its passage in jeopardy.

The TANF bill working its way through the House Ways and Means Committee would only increase child care funding by $1 billion over five years, which is one reason certain Senators are adamant about retaining the larger increase that is in their bill.  The House measure also expands work hours required for TANF households from the current 30 a week for families with children in school (20 for those with pre-schoolers) to 40 for all families.  The Senate bill would increase the current provision by four hours a week for both groups.

The Congressional Research Service prepared a report, "TANF Reauthorization: Side-by-Side Comparison of Current Law, S. 667, and H.R. 240 (TANF Provisions)."  To view it, go to http://www.chn.org/pdf/rl32834.pdf.

TANF was created by Congress in 1996 and its initial authorization expired in 2002.  It has been funded since then by a series of eight short-term extensions.  Some advocates for low-income people feel that a long-term extension of the current program, with all of its shortcomings, would be preferable to passage of any bill likely to come out of the current Congress. 

Social Security

Some of the steam may have gone out of the drive for a major overhaul of the Social Security program. Although the President has made dozens of trips around the country to sell his plan, he has not yet spelled out his plan and seems reluctant to do so. The sketchy drafts of his plan that have been presented so far center on the creation of private investment accounts for future retirees, funded by diverting into the stock market part of what is now directed to their Social Security accounts. No details have been offered on how the Administration proposes to replace the money this would take out of the fund that now pays benefits to millions of retirees, children who are survivors of deceased participants in Social Security, and people with handicaps who are entitled to Social Security disability payments.

The 216th General Assembly passed a resolution on Social Insurance in 2004. See page 3 for details.

Congressional enthusiasm for private accounts has been subdued.  According to a Reuters article from April 13, Senate Finance Committee Chairman Charles Grassley (R-IA) has said that he would not be able to get his committee to approve legislation creating private individual accounts.  Senate Democrats vigorously oppose the private accounts, so the defection of even a few Republicans would make passage of such a plan extremely difficult.  Support of the Finance Committee is essential, but unlikely.

Still, the president's initiative is far from dead, and Grassley intends to begin committee hearings in July. At the town hall meeting, the Senator introduced Mr. Bush, saying, "We got to turn up the heat on Washington, D.C., to see this as an issue and get a bipartisan agreement to get something done."

Afterward, Grassley told reporters he would push for private accounts even if a majority of the public does not appear behind the idea. "The president knows one of the rules of politics is repetition," he said. (Source: The Washington Post, "Social Security Plan Meets Doubt in Iowa GOP Lawmakers: Approach Isn't Selling"; by Jim VandeHei, 3/31/05)

The Social Security program now has a surplus, but its trustees have said that by 2017 (or 2018, according to the Congressional Budget Office) the program will be paying out more than it takes in.  By sometime in the 2040s, it may be necessary to reduce benefits by as much as 30 percent. Changes made now to resolve the solvency problem could be eased in gradually, without causing great pain to anyone. The Administration's proposal, however, by taking funds out of the program to set up privatized accounts, only makes the deficit problem worse.

Among suggestions under discussion for increasing the income to the program are:

• Changing the base on which taxes are charged, currently $90,000 annually (indexed to inflation).  Some legislators have suggested figures such as $140,000 to $200,000 a year.  Others advocate having no cap on the amount of salary that can be taxed;
• Reducing benefits to retirees by changing the basis on which they are calculated;
• Raising the amount of Social Security tax levied against future salaries; and
• Increasing the retirement age at which recipients can draw benefits.  That age is already in the process of rising gradually from 65 to 67.

The Presbyterian Church (U.S.A.) Washington Office, along with over a dozen other national faith organizations, has developed a statement of principles on Social Security that calls for a program characterized by compassion, economic security, equity, fairness, and progressivity.  It urges Congress to encourage private savings as an addition to, not a substitute for, the current system.

The President's supporters are urging him to come up with a definite proposal so that they can take action on it this year. Next year is a congressional election year and few legislators will want to deal then with a social program that ultimately affects all voters. 

General Assembly 

Resolution On Reaffirming the Importance of Our Nation's Social Insurance System (Social Security and Medicare) 

Approved by the 216th General Assembly (2004) 

The 216th General Assembly (2004) of the Presbyterian Church (U.S.A.)  

1. Reaffirms the importance of our nation s social insurance system, specifically Social Security and Medicare that were enacted to promote the general welfare, and to assure a guaranteed income and health care for the workers of the United States. 
2. Urges our nation s leaders to support and maintain the fundamental structure and intent of Social Security, expressly that it continue to be
   1. universal, covering all persons in paid employment and their families, 
   2. compulsory, requiring all working Americans to contribute to our future security, 
   3. an earned right, based on contributions out of past earnings rather than charity, 
   4. contributory and self-financed, out of dedicated taxes, e.g. wage-related rather than means tested, 
   5. protected against inflation, by periodic, guaranteed, cost-of-living adjustments, and 
   6. backed by the full faith and credit of the United States, rather than depending on the erratic performance of the stock market or the unpredictable financial stability and profit interests of a private company. 
3. Requests the Advisory Committee on Social Witness Policy, in concert with the Office of Health Ministries U.S.A., to review the PC(USA) position paper,  Economic Security for Older Persons,  approved by the 195th General Assembly (1983), in order to update the changes in laws affecting mandatory retirement, Social Security, and pension policies; and to reexamine the interpretations of some of these policies. Request that the Advisory Committee on Social Witness Policy, in concert with Office of Health Ministries U.S.A., make a report of this review to the 217th General Assembly (2006). 
4. Disseminates this overture immediately to members of Congress, to the president's administration, and to the media, synods, presbyteries, church congregations, and individual Presbyterians. 
5. Instructs the Office of the General Assembly to communicate immediately with the National Council of Churches of Christ and with other ecumenical partners to express concern of the Presbyterian Church (U.S.A.) on issues surrounding our national insurance system; and inviting them to participate in developing a shared position and action strategy to affect public policy. Request that a report of these actions be made to the 217th General Assembly (2006).