FOR IMMEDIATE RELEASE October 05, 2005

CONTACT: Brendan Daly/Jennifer Crider 202-226-7616

Pelosi and Spratt Urge Cancellation of Budget Reconciliation

Washington, D.C. – House Democratic Leader Nancy Pelosi and Congressman John Spratt (D-S.C.), Ranking Member on the Budget Committee, sent a letter to Speaker Dennis Hastert and Budget Committee Chairman Jim Nussle today requesting that they cancel budget reconciliation, which would increase the deficit by $35 billion and cut taxes for the wealthy while requiring deep spending cuts for those in need.

The text of the letter follows:

October 5, 2005

Dear Speaker Hastert and Chairman Nussle:

On September 7, we wrote in the aftermath of Hurricane Katrina to request that the spending and revenue bills called for in the budget reconciliation instructions be suspended indefinitely.  While we were pleased that you delayed action on reconciliation until late October, we now urge you to cancel the reconciliation process called for in this year’s budget resolution.   Reconciliation would increase the deficit by $35 billion.  Canceling it would avoid that increase. In the near term, it is the most fair and appropriate solution to thwart a swelling deficit.

The budget resolution’s spending reconciliation instructions require eight authorizing committees to submit a total of $35 billion in spending cuts.  Given the committees that are reconciled, it seems likely that reconciliation would cut programs that victims of Hurricane Katrina will be relying on, such as Medicaid, food stamps and unemployment compensation.   Hurricane Katrina underscores the importance of these safety net programs.  If they are cut, the unprecedented cost of Hurricane Katrina will be borne by those least able to afford it.  We disagree with Republicans who are using Katrina as a rationale to justify reconciliation cuts to safety net programs.  While we are deeply committed to fiscal responsibility, we don’t understand why many Republicans believe that helping victims of Katrina meet their urgent needs and rebuilding the Gulf Coast require an offset, but rebuilding Baghdad or giving tax cuts to the wealthy does not.

The budget resolution calls for the Congress to cut taxes under reconciliation by $70 billion.  It also calls for further tax cuts of $36 billion that are not reconciled.  The estimated cost of Hurricanes Katrina and Rita is growing daily.  In light of the large deficits already projected, and the enormous obligations imposed by these disasters, we should not add to the deficit or reduce the resources needed to fund the federal response to the worst natural disaster in our history.

Simply put, the Congress should be focused on passage of relief legislation for Hurricanes Katrina and Rita and a budget that better reflects the nation’s needs.

Sincerely,

NancyPelosi                                                    John M. Spratt, Jr.

House Democratic Leader                               House Budget Committee

                                                                       Ranking Member

“ Democrats are united in presenting a New Direction for America, one that will make our nation as strong as its people, one that brings opportunity, security, and prosperity to all Americans. ”

Democratic Leader Nancy Pelosi