That Recent Congressional Agreement...

| Thu Jan. 5, 2006 12:17 PM PST

This came in over the holidays, but the Center on Budget and Policy Priorities has put out a handful of extremely thorough reports looking at Congress' recent budget legislation, which will likely pass sometime early this year. The first report notes that the agreement would cut Medicaid services and increase fees for low-income families who can't otherwise afford health care by some $16 billion. At a time when the quality of Medicaid care has been slowly eroding for years, these cuts come at the worst possible time. Child-support enforcement and foster care aid also get chopped up.

A second report notes that Congress also imposed stunning new mandates on state welfare programs, and slashed funding for child care. In fact, the new welfare provisions are so strict that states many almost certainly won't be able to comply. But the thing is, Congress knew that many states wouldn't be able to comply. That was the point. Republicans intentionally designed the bill so that states would fail and hence be forced to pay fines to the federal government, which would in turn make it look like they were "trimming" the federal deficit. Clever trick, and the only downside is that, as the non-partisan CBO noted, "the number of children in deep poverty is likely to rise." But that's nothing to get too worked up about, no doubt.

And finally, the Center notes that the budget deficit isn't really going to get any smaller after these cuts, because Congress also allowed two new tax cuts for high-income families to begin taking effect in January 2006. How skewed are these new cuts towards the upper brackets? The chart in the middle of this report is particularly telling: workers making $100,000 to $200,000 will receive an average tax cut of $25. Enough for a movie and popcorn, almost. Workers making $75,000 to $100,000 get a whole buck, on average. On the other hand, those Americans making over $1 million will receive an average tax cut of $19,234, so it's not all bad.

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