Katrina Could Cause a Needed Reevaluation of Priorities in Congress

Hurricane Katrina has shaken up Congress' fall schedule immensely, as its focus has shifted to respond to the immediate needs of the Gulf region utterly devastated by the storm. Congress has passed more than $62 billion in aid, as well as Of the reconciliation measures laid out by Congress in April's budget resolution, some could prove to be extremely harmful. Reconciliation was expected to result in lawmakers:
  • cutting $35 billion from expected mandatory spending over five years ($10 billion was expected to be taken from Medicaid);
  • enacting $70 billion in tax cuts over five years (Senate Finance Committee Chairman Charles Grassley (R-IA) was expected to use reconciliation to, among other things, extend the 2003 dividend and capital gains cuts and provide one year of alternative minimum tax relief); and
  • raising the federal government's debt ceiling to $781 billion (for the fourth time since President Bush took office in 2000).
The original deadlines for the three actions above were September 16, 23, and 30, respectively. However, in light of the current attention to hurricane-related legislation, Senate Majority Leader Bill Frist (R-TN) has extended the deadlines for the budget cuts approximately six weeks to October 26 and for tax cut legislation to November 2. The Republican leadership in Congress has signaled its intention to proceed with the reconciliation bills this year, they claim partly to "ensure the vitality" of the national economy. Grassley has repeated his intention to move forward with tax reconciliation and Rep. Jim Nussle (R-IA) and Sen. Judd Gregg (R-NH), Budget Committee Chairmen for the House and Senate, respectively, intend to move forward with reconciliation-protected budget cuts sometime this fall. Nussle stated, "We should not be distracted by this or anything else to continue our efforts to reform government. That's what reconciliation is about, it's about reforming government." Gregg echoed these sentiments calling the idea of an indefinite suspension of reconciliation "blatant politics" and noting, "The view is we're still going to execute this reconciliation package in a timely manner." Congressional Democrats, meanwhile, have been steadfast in their calling for a fundamental shift in priorities, starting with reversing the decision to complete the reconciliation bills. Democratic lawmakers are calling on the GOP leadership to reconsider drastic tax cuts for the wealthy and cuts to essential human services at a time when so many people are in need. Many believe a post-disaster shift in our national consciousness and priorities will make it much more difficult for the GOP to ram through $70 billion in tax cuts and hope to cancel reconciliation altogether. In addition, some Democrats in the Senate are hoping the delayed vote to repeal the estate tax will fall off the agenda for good. It remains unclear whether Frist will be able to hold a vote on the estate tax this year. While Frist and other GOP leaders are still hoping to hold a vote, they have come under increasing fire -- both from Democrats and some in their own party -- for their efforts to push forward with repealing taxes for the wealthiest people in the U.S., while so many people are in obvious need following Hurricane Katrina. Sen. Jon Kyl (R-AZ), who has served as the Republican's key estate tax negotiator, told reporters last week he hopes to hold a vote in October "to determine whether or not the votes are there for permanent repeal… That hasn't changed." Meanwhile, Chairman Grassley has vocalized his skepticism on holding a vote, commenting recently that repeal of the estate tax would be "unseemly" at a time when "people are suffering." Congressional Republicans not only face criticism of their continued efforts to repeal taxes for the most wealthy, but are also being hammered for a string of budget decisions that will negatively impact the nation's charitable infrastructure for many years to come -- the same infrastructure so many Americans are now turning to for help. Federal budget experts at the Aspen Institute have found in a recent report that Congress' Fiscal Year 2006 (FY 06) federal budget proposals reflect a broader trend of shifting responsibility for a number of social programs from the federal government towards the already strained charitable sector. In The Nonprofit Sector and the Federal Budget: Fiscal Year 2006 and Beyond, they report that the budget proposed by Congress would cut funding to important programs for nonprofit groups by $40 billion between FY 05 and FY 10. The president's original budget proposal from earlier in the year would have been even more harmful, cutting these same programs by $71.5 billion over the same time period. Congressional GOP leaders and the administration have, following Hurricane Katrina, made a point of lauding charitable organizations and nonprofits for the important role they play in helping people in need. President Bush, in his Sept. 15 address to the nation, said, "I ask the American people to continue donating to the Salvation Army, the Red Cross, other good charities and religious congregations in the region." Yet, Bush and GOP Congressional leaders are undermining the abilities of the charitable sector to effectively provide help in times of crisis, by continuing to push forward with budget cuts, as well as continuing their push for repeal of the estate tax, a key incentive for charitable giving. If Congress and the White House are serious about providing help to disaster victims now, and serious about improving the plight of all Americans in need across the country, it is imperative they reconsider:
    a) Dangerous budget and tax cuts in reconciliation, b) Efforts to repeal the estate tax, and c) Priorities that would force the nonprofit sector to carry more of the load.
An about-face on these dangerous proposals would illustrate a true commitment to investing over the long-term in the well-being of this country and its people, a commitment that is obviously needed right now.
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