February 14, 2006

The Bush Budget Fails Gulf Coast Hurricane Survivors

The Bush Budget Fails Gulf Coast Hurricane Survivors

Just days after opposing the Baker-Landrieu bill (H.R. 4100), a bipartisan plan to redevelop the Gulf Coast region’s flooded areas, President Bush presented a budget proposal for Fiscal Year 2007 that deals another painful blow to hurricane survivors. The Bush budget shows his Administration has learned little from the Gulf Coast hurricanes that displaced over 1 million Americans, caused 1,350 deaths, destroyed 275,000 homes, and caused $40 billion in property damage. Instead of addressing the ongoing economic development, recovery, rebuilding, housing, health care, and education needs of Gulf Coast communities, President Bush proposes cuts to the very programs that would help the hurricane survivors. For example, President Bush proposes slashing funding for Community Development Block Grants (CDBG)—the program his Administration pointed to as a reason for opposing the Baker-Landrieu bill. As recently as last week, Donald E. Powell, the administration’s federal coordinator for Gulf Coast rebuilding said:

“’We believe that the CDBG money meets the needs of the uninsured homeowner outside the flood plain… It’s more direct. It doesn’t have the bureaucracy. It doesn't compete with the private sector.’” (New York Times, 2/2/06)

If the Bush Administration believes that CDBG money is the best way to rebuild the Gulf Coast, then why does the Bush budget for Fiscal Year 2007 cut funding for CDBG grants by $736 million? To make matters worse, the President’s budget takes away funding from state and local authorities and relies on the Federal Emergency Management Agency (FEMA) to administer federal funds for hurricane relief. This report examines the various ways President Bush’s budget fails hurricane survivors.

Bush Budget Shortchanges Disaster Prevention Programs

Bush budget cuts funding for the Army Corps of Engineers. The Army Corps of Engineers is responsible for carrying out projects that help prevent flooding and coastal damage, including levee projects. Yet the Bush budget would cut funding for the Army Corps of Engineers by 11 percent or $596 million, from $5.3 billion to $4.7 billion in Fiscal Year 2007. This includes a 34 percent cut in the construction budget. The President’s budget would cut funding by $2 million for emergency streambank and shoreline protection and by $40 million for aquatic plant control and ecosystems. Funding proposals for 596 projects in last year’s Energy and Water Appropriations bill were not included in the President’s budget request.

Bush budget cuts funding for storm warning and detection programs. Early warnings of natural disasters can help prepare the public and give government officials more time to plan for and implement emergency plans. The Bush budget, however, would cut millions in funding for the very government agencies and programs that help provide these services. The National Weather Service (NWS) provides warnings and forecasts to ensure public safety and mitigate property loss and economic disruption. The Bush budget would cut funding for the NWS from $107 million to $98 million in Fiscal Year 2007. Funding for the National Oceanic and Atmospheric Administration would be reduced by $169 million, from $3.850 billion to $3.681 billion in Fiscal Year 2007, including the National Ocean Service ($113 million cut); the Oceanic and Atmospheric Research program ($18 million cut); and the National Marine Fisheries Service ($37 million cut).

Bush budget cuts funding for flood control projects. The Bush Administration has already received criticism for refusing to commit to building a levee system capable of protecting New Orleans against a Category 5 hurricane. Now, President Bush is proposing to reduce funding for flood control construction projects carried out by the Army Corps of Engineers from $16 million in Fiscal Year 2005 and $119 million in Fiscal Year 2006, to $15 million for Fiscal Year 2007. Despite the clear need for better flood control along the Mississippi River, the President’s budget proposes to cut funding for the Mississippi River and Tributaries Program by $59 million from Fiscal Year 2005 and $296 million from Fiscal Year 2006. The purpose of this program is to reduce flood damage along the Mississippi River and its tributaries.

Bush Budget Cuts Emergency Preparedness Funding for State and Local Authorities

Bush budget cuts grants for state and local law enforcement. The President has proposed a total of $1.2 billion in cuts for state and local law enforcement programs, including programs specifically designed to assist urban areas and rural communities. These cuts will inhibit the ability of first responders to prepare for, and deal with, threats to public safety.

Bush budget cuts funding for first responders. In the aftermath of Hurricane Katrina, we saw the necessity of adequately equipping and training our local first responders. Unfortunately, the Bush budget proposes to cut Department of Homeland Security first responder grants by $227 million (or thirteen percent). If enacted, these cuts would reduce first responder funding to a level fifty percent below Fiscal Year 2004. These grants provide critical resources to equip and train police, fire and emergency medical personnel to respond to public emergencies.

Bush budget cuts funding for local police departments. The Bush budget would hit police departments especially hard, cutting off funding for a variety of important programs. For example, the Bush budget would cut $371 million from the community policing (COPS) program, which last year was authorized to make $386 million in expenditures to assist state and local law enforcement agencies by providing grants, recruiting, training, and technical assistance. The Bush budget also would cut $15 million from the Emergency Management and Performance grants, the federal government’s main grant program for state and local emergency management activities.

Bush Budget Cuts Economic Development Programs

Bush budget cuts funding for Community Development Block Grants. The President’s budget proposes to cut funding for the Community Development Block Grant program by $736 million – a 20 percent cut that would also eliminate funding for rural empowerment zones. The CDBG program provides eligible metropolitan areas with annual direct grants that can be used to revitalize neighborhoods, expand affordable housing and economic opportunities, and improve community facilities and services.

bBush budget cuts funding for coastal communities. The livelihood of thousands of Gulf Coast families depended on fishing, boating, and other coastal activities. The Bush budget would cut funding for the National Marine Fisheries Service by $37 million and make it more difficult for these families to rebuild their businesses by cutting funding for key programs in the Small Business Administration.

Bush budget cuts funding for small businesses. Even though over 165,000 Small Business Administration (SBA) loan applications from the hurricane-effected states remain unprocessed, the President is cutting key programs in the SBA’s budget. The Bush budget would:

Raise costs of disaster loans – the President’s Fiscal Year 2007 budget would raise the cost of disaster loans for homeowners and businesses by eliminating the low interest rate cap (which would mean higher interest rates) and eliminates 50 full time staff from disaster operations.

Raise costs of small business loans – the President’s Fiscal Year 2007 budget would raise the cost of small business loans by charging borrowers higher fees on 7(a) loans of $1 million or more. In addition, the Administration provides no funding for the 7(a) program, which is the SBA’s largest loan program.

Eliminate Microloan and Microloan Technical Assistance Programs – the Fiscal Year 2007 budget would eliminate the microloan program which proportionally serves the most minorities and women out of all small business assistance programs.

Provide zero funding for the Program for Investment in Microenterprise (PRIME) program – for the sixth year in a row, the President’s Fiscal Year 2007 budget would provide zero funding for this microenterprise program that targets the poorest of small businesses.

Provide zero funding for the New Markets Venture Capital Program – despite the high unemployment rates in the Gulf Coast states, the Bush budget provides no funding for the SBA’s venture capital program that supports the most chronically under-employed and under-invested areas in the country.

Rural Parishes and Counties Lose Housing, Health Care, Education, and Development Assistance

The President’s budget would drastically cut funding for programs that help rural communities in the Gulf Coast states rebuild and recover.

Bush budget cuts funding for rural businesses. The Bush budget would eliminate Economic Impact Initiative grants, Rural Business Enterprise grants, Rural Business Opportunity grants, Rural Community Development Initiative grants, and Rural Empowerment Zone and Enterprise Community grants. These programs provided $80 million toward economic development in rural communities in Fiscal Year 2006.

Bush budget cuts funding for rural housing programs. The President’s budget would cut $259 million in Rural Housing Assistance funding, eliminate funding for Rural Housing and Economic Development programs (RHED) and Direct Rental Housing Loans, and freeze funding for the Homeless Veterans Reintegration program, which helps homeless veterans become employed in urban and rural areas.

Bush budget cuts funding for rural health programs. The President’s budget proposal slashes programs designed to help rural communities address their unique health care challenges. It proposes only $27 million for rural health programs in Fiscal Year 2007, a cut of 83 percent from Fiscal Year 2006. The President proposes terminating rural hospital flexibility grants, the rural and community access to emergency devices program, and area health education centers.

Bush budget cuts funding for rural education. The President’s budget freezes funding for two vital programs that are served under the rural education school improvement programs: the Small, Rural Schools Achievement program which helps fund rural local educational agencies, and the Rural and Low-Income Schools program, which targets rural local education agencies that serve poor students.

Bush Fails to Address the Ongoing Needs of Hurricane Survivors

Bush budget cuts housing assistance. The Brookings Institute recently reported that as of December 8, 2005, the number of hurricane survivors living in Red Cross shelters increased to 445,294. (Brookings Institute, Katrina Index, 2/1/06) Instead of providing for people in need of housing assistance, the Bush budget would cut funding for programs to assist the elderly with housing costs by $190 million (or 25 percent) and cut funding for programs to assist persons with disabilities with housing costs by $118 million (or 50 percent). These budget cuts have been announced at an especially challenging time for hurricane survivors because FEMA is forcing thousands of displaced survivors from hotel rooms this week.

Bush budget cuts Medicaid. The Bush Administration opposed a bipartisan measure sponsored by Senator Baucus and Senator Grassley that would have expanded Medicaid eligibility requirements to provide coverage for hurricane survivors. More than 50 million low-income people depend on Medicaid for their health care. The Republican-controlled Congress just enacted $6.9 billion in Medicaid cuts over five years. Now the President is looking for more. The President’s budget, through legislative proposals and regulatory changes, proposes an additional $17 billion in Medicaid cuts over five years.

Bush budget cuts food assistance for low-income families. As families throughout the Gulf Coast region struggle to make ends meet, the Bush budget targets the most vulnerable Americans who need food assistance. According to the Los Angeles Times, “Another program new to Bush’s hit list is the Agriculture Department’s commodity supplemental food program, which provides food packages to low-income elderly people, pregnant women and infants.” (2/6/06)

Bush budget cuts funding for education. President Bush’s Fiscal Year 2007 budget proposes the largest cut to federal education funding in the 26-year history of the Education Department – a $2.1 billion reduction, or 3.8 percent below the Fiscal Year 2006 level. Nearly one-third of the 141 programs the President proposes to cut or eliminate are education programs. Louisiana, Mississippi, and Alabama are among 29 states projected to receive a cut in Title I education grants, which provide needed resources to local school districts to help disadvantaged students succeed academically.

Bush budget eliminates Social Security death benefits. The Bush budget would eliminate the $255 death benefit provided by Social Security. While modest, this benefit is important to many families who need assistance in order to bury their loved ones with dignity.

« Back to Press Releases