Lincoln: Bush’s Budget Neglects Rural America

FOR IMMEDIATE RELEASE: February 09, 2006
Contact: Katie Laning (202)224-4843

Washington – President Bush’s FY 2007 budget request to Congress relies disproportionately on cuts to programs that directly affect the quality of life in rural America, U.S. Senator Blanche Lincoln (D-Ark.) said today as she released an analysis of the Bush budget.

For the second year in a row, Lincoln issued a "Rural Report Card" to illustrate the impact of President Bush's budget cuts from a rural perspective. Later today, Lincoln, the Chair of Rural Outreach for the Senate Democratic Caucus, will lead a Capitol Hill press conference to highlight six areas where she said the President plans to cut deep into rural America. They are: rural education, rural law enforcement, rural health care, agriculture, economic development and Social Security.

"The President’s annual spending plan would severely cut programs vital to working families, farmers, small businesses and local economies across the heartland," Lincoln said. "These are good people who play by the rules and are more than willing to pay their fair share to balance the budget. However, by any measurement, the President’s plan is not fair to rural America. If the President is truly serious about reducing our record deficits, he should propose a plan that asks all Americans to share this burden. Rural America wants desperately to be a part of making our nation the strongest it can be, yet time after time, we see the President letting our small towns dwindle and leaving them behind."

Lincoln’s Rural Report Card focused on five areas where President Bush’s budget cuts deep into rural America which include:

1) RURAL LAW ENFORCEMENT

First Responders: The President’s budget includes a 24 percent cut, totaling approximately $244 million, in first responders funding. Lincoln said these cuts would hinder critical state and local efforts to protect our communities by making less funding available for the preparedness of first responders and citizens, public health, infrastructure security and other public safety activities.

Lincoln said she was particularly concerned with how these cuts would affect the amount of federal Homeland Security funding provided to small and rural states such as Arkansas. The President’s budget would further cut the minimum guaranteed funding to states to $1.58 million, down nearly 78 percent from $7.13 million in FY 2006.

FIRE Grants: The President’s budget includes a $355 million cut or 56 percent in Firefighter Assistance Grants. Lincoln said this program provides direct assistance for fire departments to better protect firefighters and the public. The President’s budget eliminates funding for the rural fire assistance program in the Department of the Interior, which supports rural fire departments like those in Arkansas. The President also eliminates the state and local fire assistance program, which supports cost-shared grants to local and rural fire protection districts that protect small communities.

COMMUNITY ORIENTED POLICING SERVICES (COPS) Methamphetamine Initiative: This year’s budget requests $40 million, falling short of the $63 million Congress provided for the COPS program last year. Last year, Lincoln fought to increase funding for the COPS Meth program after the President slashed the program’s funding in his budget to $20 million. Her amendment to raise funding for this COPS program from the President’s request of $20 million per year to $52 million per year successfully passed Congress in 2005.

Edward Byrne Memorial Justice Assistance Grants:, The President recommends elimination of the Edward Byrne Justice Assistance Program. Last year, the program provided $2.9 million to 16 Arkansas counties. These funds went to vital law enforcement efforts, such as tracking sex offenders in our state. Lincoln also said that this move by the President would significantly hinder the ability of Arkansas law enforcement to combat the state’s growing meth problem.

Lincoln said these law enforcement programs are more important in rural America because in many cases, these funds provide critical assistance rural communities need to keep the people who live there safe.

2) RURAL HEALTH CARE

Lincoln said that the President wants to eliminate 21 important health programs, which total $1.047 billion. These include nutrition services and preventative health services for seniors. The President plans to eliminate the Preventive Health Services Block Grant, which Arkansas depends on to fund a variety of health care needs state-wide. The President also wants to renege on federal support for Area Health Education Centers, which provide vital health care and education services to rural areas. The President targets Children’s Hospitals for a cut of $198 million or 67 percent of last year’s funding. His budget also plans a cut of $94 million or 73 percent of last year’s funding for rural health care programs.

Medicare: The President proposes to cut Medicare by $36 billion over 5 years and $105 billion over 10 years. This would come as his Administration, due to under-funding and poor planning, has already botched the implementation of a prescription drug plan for seniors under Medicare.

Hospitals: Lincoln said the President’s proposed cuts to hospitals are estimated to cost Arkansas providers $360 million over five years.

Nursing Homes: Lincoln said the President’s cuts to nursing homes are estimated to cost Arkansas providers $5.7 million in 2007.

Home Health: Lincoln said the President’s proposed cuts in home health payments would cost Arkansas providers $3.57 million in the first year, $36 million over five years, and $92.2 million over 10 years. These cuts would come on top of the home health cuts in the just-passed Deficit Reduction Act, which cut home health spending in Arkansas by $3.78 million over one year, and $20 million over five years. Adding them together, over five years Arkansas stands to lose $56 million in home health payments.

Hospice: Lincoln said the President’s plans to cut hospice payments would cost Arkansas providers approximately $5.1 million in hospice payments over five years. Most experts agree this benefit already falls short of the need and a cut would further exacerbate this problem.

3) EDUCATION

Lincoln said that the President has proposed cutting education funding by $2.1 billion nationwide, which would be the largest cut to federal education funding in the 26-year history of the U.S. Department of Education. She said this would hurt rural school districts in Arkansas that rely on federal dollars such as Title I, which is the cornerstone of No Child Left Behind law. The funding is intended to be used specifically for children most at risk of being left behind.

Lincoln said the President’s proposed cuts to Title I will affect more than 34,000 Arkansas children. She noted that Arkansas school districts are already struggling to meet the demands of the new No Child Left Behind law, which the President and his allies in Congress have never fully funded. She pointed out that the President’s budget proposed extending the No Child Left Behind law to high schools at the expense of eliminating 42 programs, including all the vocational and technical education programs, education technology state grants, GEAR UP, Safe and Drug-Free Schools initiatives, TRIO Talent Search and Upward Bound programs.

Title I: The President’s budget only proposes funding Arkansas’ program at a little under $124 million, but the No Child Left Behind Law promises that Arkansas would receive $238 million. This under-funding means that over 34,000 Arkansas children will be denied promised Title I funding.

After School Programs: The President’s budget only proposes funding Arkansas’ program at a little more than $9 million when the state should receive over $23 million. Lincoln said this could mean that more than 19,000 Arkansas children could be denied after school services.

Individuals with Disabilities in Education Act (IDEA): Lincoln said the President’s budget continues to retreat on America’s commitment to students with special needs, proposing that, for the second year in a row, the federal government provide a smaller share of states’ total costs for special education. Arkansas should receive $162 million and yet the President’s budget would only provide just over $104 million, under-funding Arkansas special education by almost $63 million.

Overall, the President’s budget would eliminate 42 federal education programs.

4) ECONOMIC DEVELOPMENT & HOUSING

Lincoln said the President’s budget would once again cut economic initiatives relied on by Arkansas’ rural communities. His proposal would cut funding for housing programs for the elderly by 26 percent and for the disabled by 50 percent.

Delta Regional Authority: The President wants to cut funding for the Delta Regional Authority (DRA) in half to $5.94 million. Congress appropriated $12 million for the DRA in FY 2006.

USDA Rural Business Enterprise Grant Program (RBEG): President Bush proposes to eliminate this important program which helps emerging businesses grow and develop. Lincoln said that Arkansas has benefitted tremendously from the RBEG program and stands to lose millions in economic development dollars if this program is eliminated. Lincoln pointed to Arkansas-based Winrock International, an international non-profit corporation, which uses RBEG funding to assist businesses throughout the state. Winrock has assisted 2,825 Arkansas businesses over the last 10 years using RBEG funding.

Community Development Block Grant (CDBG) Program: The President’s budget once again proposes to reform and cut $1 billion, or 26 percent, of this important program that serves to strengthen rural communities. Lincoln said these cuts could severely impair Arkansas’ ability to provide affordable housing and economic development grants. In addition, this move would directly impact the 14 entitlement cities that receive CDBG funds (cities include: Bentonville, Conway, Fort Smith, Jonesboro, Rogers, Texarkana, Fayetteville, Hot Springs, Jacksonville, Little Rock, North Little Rock, Pine Bluff, Springdale, and West Memphis).

CDBG funds have been used for a variety of projects in Arkansas, including senior citizen centers, public health facilities, childcare facilities, affordable housing rehabilitation and construction projects, and rural fire stations. In 2005, Arkansas received approximately $21 million in CDBG funds, and is scheduled to receive $19 million in FY 2006, representing a $2 million cut in economic development funding.

Rural Conservation and Development Districts: The President’s budget proposes consolidation of Resource Conservation and Development (RC&D;) councils. RC&D; councils provide the necessary tools and support to help rural communities work together to solve problems and promote quality of life. The proposal would reduce the number of council coordinators from 350 to 50 nationwide. Arkansas has 7 RC&D; Councils and 7 Coordinators.

Manufacturing Extension Partnership (MEP): The President plans to cut $67 million from last year’s budget of $113 million, representing a 60 percent cut. The MEP helps American small businesses improve productivity and compete in the global marketplace. The Arkansas Science and Technology Authority receives approximately $1 million each year in MEP funding to assist 240 small and medium sized businesses in Arkansas.

Rural Housing: The President’s budget would eliminate the Rural Housing and Economic Development program (RHED). Arkansas received grants for projects in Fayetteville, Brinkley, and Little Rock in 2005.

5) AGRICULTURE

Lincoln said the President Bush’s budget request for the U.S. Department of Agriculture would devastate Arkansas’ farm families. Specifically, Bush proposes a five percent across the board cut to commodity programs; lower payment limitations; elimination of the "three-entity rule"; and the further consolidation of Farm Service Agency (FSA) offices across the country.

Lincoln said the President’s proposals would severely alter the nation’s current agriculture policy as established in the 2002 Farm Bill, which Lincoln helped write and eventually pass. In that comprehensive law, which dictates U.S. agricultural policy for a six-year period, Lincoln fought to establish payment limitations that didn’t disproportionately impact southern farmers, whose crops require a more costly capital investment to grow than those produced in other regions, like the Midwest.

Lincoln said Bush wants to impose unreasonable payment limitations and drastically reduce the level of support promised to farmers in that 2002 law. Lincoln said the President’s misguided proposals in agriculture break a firm promise the federal government has made to American farmers and ranchers. Lincoln cited a University of Arkansas study completed last year that found that proposals to cut farm and commodity programs – identical to this year’s budget proposals – would cost Arkansas farmers $165 million per year.

Food Stamps: The President’s budget proposes to restrict eligibility for food stamp benefits which the Congressional Budget Office estimates could bump 225,000 from the rolls nationwide. Over 372,000 Arkansans currently receive food stamp benefits.

Telemedicine: The President proposes to eliminate funding for loans for the USDA’s Distance Learning and Telemedicine program, citing lack of interest. Lincoln noted that the Ozark Health Foundation received a grant of $420,505 through this program last year to integrate the electronic medical records of a number of local health care agencies. Additionally, the White River Rural Health Center received a grant of $341,297 to acquire advanced telecommunications equipment that will enhance the health care available to residents in Cleburne, Craighead, Cross, Jackson, Lonoke, Monroe, Prairie, White and Woodruff counties.

6) SOCIAL SECURITY’S IMPACT ON RURAL AMERICA

President Bush slipped a plan into his budget to privatize Social Security by diverting $700 billion from the Trust Fund beginning in the year 2010 to pay "voluntary private accounts." Lincoln said that she was appalled that the President would again try to privatize Social Security by inserting a line item into his 2007 budget. She called such a move "outrageous" considering his privatization schemes were rejected last year by an overwhelming majority of Americans, including Members of Congress in his own party. She said that privatizing Social Security would be tremendously harmful to rural America, as it would affect small town businesses and their employees.

Lincoln singled out one Arkansas county as an example. She said that Social Security brings $100 million a year into Union County. That’s more than construction, healthcare and retail. She said that if Social Security were privatized the way that President Bush wanted, Union County would lose more than $33 million a year which is equivalent of 7 out of every 10 stores in Union County going out of business.

In addition, Lincoln said that Arkansas ranks 2nd among the 50 states in percentage of income from Social Security. Furthermore, Arkansas has the 3rd highest rate of citizens who receive Social Security benefits. In 2003 alone, more than $5 billion flowed into Arkansas’s economy through Social Security.