What the Budget Debate in Congress

Means for Minnesota

Congress is considering deep cuts to the federal budget – cuts that would cut resources for people living on low-incomes. The U.S. House passed a budget bill that make cuts this year – including cuts to:

• Head Start,
• energy assistance to help pay heating bills,
• grants for low income students trying to go to college,
• training and job counseling services for workers needing to upgrade their skills,
• treatment for people struggling with mental illness or chemical dependency,
• the WIC nutritional program for pregnant women and their children;
• public housing repairs;
• affordable housing funds; and
• weatherizing homes.

In addition there are cuts to:

• K-12 education,
• law enforcement,
• food safety; and
• the Centers for Disease Control.

The $460 billion in non-military, non-defense spending cuts would mean a $234 million cut for these services in Minnesota, according to the Minnesota Budget Project.

These cuts come only two months after Congress voted to keep the Bush-era tax cuts in place for the wealthiest Minnesotans and to cut the federal estate tax for the wealthiest households in the nation.

Congress is expected to approve a resolution that keeps the federal government operating through March 18th. After that, Congress and the Administration have to come to agreement on a budget for the last seven months of the year. If they cannot agree, the United States faces a government shut-down like the one experienced in 1994.

For more details go to the Minnesota Budget Project’s blog http://minnesotabudgetbites.org/2011/03/02/u-s-house-bill-would-mean-millions-lost-to-minnesota/, which provides clear, easy to read details and a link to more federal analysis.

Congress fails to extend emergency safety net funds

The federal fiscal year ends on Thursday and Congress was unable to garner enough votes to extend emergency safety net funds that Minnesota has used to create short-term jobs for very low income parents, for emergency assistance payments to help low income families avoid homelessness, for summer youth employment programs, for summer lunch programs for low income children and to pay for the increased numbers of families turning to cash assistance during this recession.

Although economists have officially pronounced the recession over, we all know that far too many Minnesotans remain unemployed and that growing numbers of Minnesotans, including children, have fallen into poverty.

Minnesota had earned about $80 million in emergency TANF funds (welfare to work funds) from the original stimulus bill. With those funds, the non-profit and public workforce agencies in Minnesota more than doubled the number of short-term skill-building jobs for the low income parents turning to cash assistance. More than half those jobs were in the private sector. Without the emergency funds the state’s investment in these stepping stone jobs will be at reduced capacity for another year and it is unclear whether there will be any funds after June 30. Likewise, Minnesota’s counties were able to increase emergency assistance by more than $6 million last year because of these emergency funds -- a critical resource at a time when family homelessness has increased by 27%.

The Job Preservation for Parents in Poverty Act fell victim to familiar partisan divides in Congress – all the Senate authors were Democrats; the opposition was from Republican Senators. An article in the New York Times on Sunday, however, points out that the same partisanship did not exist nationwide: both Democratic and Republican governors had embraced the opportunity to put people to work. Find the article on the New York Times.

Senator Franken had co-signed a letter with the bill’s authors asking the Senate leadership to work for passage of the bill.

Affirmative Options will continue to follow what is happening in Congress to determine if there will be opportunities in the new Congress to act on a late extension.

Will the Federal Recovery Plan reach low income Minnesotans?

The proposed $825 billion federal economic recovery bill would provide additional money for child care, welfare to work services, health care coverage fo rmany of the unemployed, Head Start, employment services and job creation.  The final federal bill will be important to those of us who care what happens to or for Minnesotans with low incomes. Federal funds can help in two ways:

• what those funds support in assistance targeted to low income households; and
• how federal funds help the state grapple with its biggest budget crisis in decades.

Affirmative Options members know that when the State runs short of money, low income Minnesotans pay the price.