Republican Budget Will Increase the Deficit,Unfairly Impact Rural America

(WASHINGTON, DC) - Saying it will significantly impact federal programs for agriculture, energy assistance, rural development, education, and children's nutrition programs, U.S. Rep. Collin Peterson (D-7th District) today voted no on the Republican Budget Reconciliation bill.

“One of the biggest problems with this budget bill is that it will not reduce the deficit,” Peterson said. “These wrongheaded spending reductions do nothing to offset the budgetary impact of the tax breaks they're going to give to people who are already very wealthy. The fact is, this will increase the deficit and increase the tax burden for our children and grandchildren.”

This current budget bill is estimated to increase the deficit by about $100 billion over the next ten years. Peterson noted that there are other plans Congress could have supported that would have been more fiscally responsible.

“Working with the other members of the Conservative Blue Dog Coalition, I helped write deficit reduction legislation that would actually take us where we need to go,” Peterson said. “That's the plan we should have been passing today.”

Under this Republican budget, next year alone, Minnesota will see a combined cut of $14.2 million from elementary, secondary, and special education programs that will impact already stressed rural school districts. Minnesota also will see a $6.9 million cut from Children and Families Services, which funds Head Start, forcing 300 children off the program.

Minnesota families will lose assistance under the WIC program by $1.4 million or 2,400 recipients, Minnesota's LIHEAP program by $10.4 million or 13,100 recipients, and Minnesota's Section 8 Housing Vouchers by 500 recipients all in 2006 alone.

“These programs assist the elderly and working families who are trying to make ends meet. These are not people taking advantage of government programs,” Peterson said.

The budget bill will deny assistance to thousands of abused or neglected children in foster care, and it will reduce child support payments by nearly $212 million over five years to Minnesota, by reducing the funding used to collect money owed to children by absent parents. It will cut Minnesota's Medicaid program that assists children, elderly and disabled populations by $190 million over five years, and it cuts the food stamp program by $800 million over five years.

The bill will mean 300,000 fewer children receive child care in 2010 than in 2004 and families with children needing Medicaid coverage will pay more and get less.

In addition, the Republican budget bill will slash student loan programs by roughly $10 billion over 5 years. As a result the typical student will be forced to pay an additional $5,800 for his or her student loans compared to current law.

In 2006 alone, this Budget Reconciliation bill will cut $6.4 million from Minnesota's share of Community Development Block Grants and $4.9 million from Minnesota's share of EPA's Clean Water funds. These cuts will adversely impact small communities that are trying to upgrade their infrastructure.

“Working families in our rural communities are dependent on the fluctuating farm economy for their income, and are also in need of assistance once in a while, to fill in the cracks of the economy, with programs like heating assistance, WIC and child care assistance.”

Although agriculture programs have saved taxpayers between $14 billion and $15 billion since passage of the 2002 Farm Bill, this budget opens up the current farm bill to make budget changes will adversely impact rural communities.

“With energy prices as high as they are, rural Americans will be hit even harder than other groups because they have to travel farther to get to a doctor, to work, to the grocery store, to operate their farm equipment - and the list goes on and on,” Peterson said.

“All these cuts together will be devastating for rural communities. This bill does little to help hurricane victims, and nothing the help pay for the war in Iraq, while giving billions away in tax relief to people who don't need the relief. When we are in a war, we should not cut taxes for anyone, period.”

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