February 9, 2006

Rural Report Card: The Bush Budget Fails to Address the Needs of Rural America

President Bush’s budget for Fiscal Year 2007 would severely cut programs that directly affect the quality of life of rural Americans. The following “Rural Report Card” is an assessment of the President’s annual spending plan and the negative impact it would have on working families, farmers, small businesses and local economies across the heartland.

As this analysis demonstrates, the President’s reductions in funding for law enforcement, health care, education, economic development, and agriculture are disproportionately weighted toward rural America. At the same time, the budget would put affordable health care further out of reach for many working Americans. (For more information about misguided priorities in the President’s budget, see the Democratic Policy Committee report, “The Bush Special Interest Budget Reflects Misplaced Republican Priorities.”) Democrats believe these are the wrong priorities not just for those who live in rural America, but for all Americans.

Rural Law Enforcement

The President has proposed a total of $1.2 billion in cuts to state and local law enforcement programs, including programs specifically designed to assist rural communities. Once again, President Bush’s budget will inhibit the ability of first responders to prepare for new threats and law enforcement to combat the growing methamphetamine problem.

Firefighter Assistance Grants: The President’s budget includes a $355 million cut (or 56 percent) in Firefighter Assistance Grants. This program, which provides direct assistance for local fire departments to better protect firefighters and the public, was authorized to make $648 million in grants last year. The President’s budget eliminates funding for the rural fire assistance program in the Department of the Interior which helps reduce the risk of damage resulting from catastrophic wildfires and supports rural fire departments. President Bush would also eliminate the state and local fire assistance program which supports cost-shared grants to local and rural fire protection districts that protect small communities.

Edward Byrne Memorial Justice Assistance Grant Program: The President’s budget proposes eliminating this important program, which made $388 million in grants last year to assist state and local governments to improve the functioning of the criminal justice system – with an emphasis on violent crime and serious offenders.

Community Oriented Policing Services (COPS): The President’s budget proposes deep cuts to this important program, which last year was authorized to make $371 million in expenditures to assist State and local law enforcement agencies by providing grants, training, and technical assistance. In particular, the COPS Program has helped cities and counties procure equipment and technology, advance community policing, and combat methamphetamine use and distribution. The $40 million the President has proposed for the Methamphetamine Clean Up program is an improvement over last year’s $20 million request, but well short of the authorized level of $52 million.

Juvenile Justice Programs: The President’s budget proposes deep cuts in juvenile justice programs, including elimination of the Juvenile Accountability Block Grants, which support state and local efforts to prevent juvenile delinquency and crime. The Bush budget also reduces funding for rural domestic violence and child abuse enforcement grants.

Rural Health Care

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.

Medicaid: 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.

AHEC: The President’s budget would eliminate Area Health Education Centers, which provide vital health and health education services to rural areas.

Education

The President has proposed cutting education funding by $2.1 billion, the largest amount in the history of the Education Department. In addition, the President’s budget proposes eliminating 42 programs, including all the vocational and technical education programs, education technology state grants, GEAR UP, Safe and Drug-Free Schools and Communities State Grants, TRIO Talent Search and Upward Bound.

School Improvement Programs 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.

After-School Programs: The President’s budget leaves behind two million students who would receive after-school services if the 21st Century Community Learning Centers program were funded at the level promised in the No Child Left Behind Act. 21st Century funding would remain flat, at $981 million–$1.5 billion below the $2.5 billion authorized level for Fiscal Year 2007.

Individuals with Disabilities in Education Act: The President’s budget proposes that, for the second year in a row, the federal government provide a smaller share of States’ total costs for special education. Funding for IDEA Part B State Grants would rise by $100 million, for a total of $10.7 billion. This would provide just 17 percent of the national average per-pupil expenditure toward meeting the excess costs of educating students with disabilities – less than half of the 40 percent “full funding” level that Congress committed to paying when the IDEA was first adopted 31 years ago. This is down from 18 percent in Fiscal Year 2006 and 18.5 percent in Fiscal Year 2005. The budget also falls further below the authorized levels in the IDEA Improvement Act of 2004. The proposed level of $10.7 billion falls $6.3 billion short of the Fiscal Year 2007 authorized level of $16.9 billion; the shortfall in Fiscal Year 2006 was $4.1 billion.

Economic Development

Rural businesses face a changing global economy and increasing costs, and economic development programs provide them with skills and tools to help them compete. The President’s budget would drastically cut economic initiatives relied on by rural communities. The economic development initiatives specifically benefit communities of 3,000 or fewer residents. These cuts will be detrimental to rural America.

Community Development Block Grants: The President’s budget proposes to cut funding for the Community Development Block Grant (CDBG) 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.

Manufacturing Extension Partnership: The President’s budget proposes a $67 million cut to the Hollings Manufacturing Extension Partnership (MEP) program, which provides business support and technical assistance services to small manufacturers. The MEP helps American small businesses improve productivity and compete in the global marketplace.

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

Water and Sewer Assistance: Water and sewer grants would be cut by $119 million to $346 million in Fiscal Year 2007. These grants assist smaller cities and towns in rural America to provide their residents with safe water and sewer service. Hundreds of thousands of people in the United States continue to have inadequate or no water or sewer service.

Rural Businesses: The Administration’s 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.

Rural Utilities: Grants and loans to rural utilities would be cut by $1.953 billion, from $8.278 billion to $6.325 billion in Fiscal Year 2007. The budget proposes eliminating mandatory broadband assistance loans authorized in the 2002 Farm Bill and capping discretionary loan guarantees for broadband loans at $30 million.

Energy: The Administration would reduce funding for the grant and loan program for farmers, ranchers, and rural small businesses to buy renewable energy systems and making energy efficiency improvements to$10 million from its authorized level of $23 million. Funding for this program has been blocked for the last two fiscal years. In addition, the budget proposes to eliminate high energy cost grants when farmers are struggling to cover skyrocketing energy costs.

County Payments: The President’s budget would cut funding for county payments through the Forest Service by over 50 percent. The original county payments law enacted in 2000 has provided more than $2.1 billion in stable funding for rural infrastructure, education, and safety programs to over 700 counties in more than 40 states. President Bush’s proposed cuts to county payments could have a devastating economic effect on rural communities throughout the country.

Payment in Lieu of Taxes: The President’s budget would cut funding for Payment in Lieu of Taxes (PILT) for the third year in a row, this year by $34.5 million. The President’s proposed $198 million funding is much less than the authorized level of $350 million.

Agriculture

The President’s budget includes cuts in farm and nutrition programs that are vital to farmers and rural Americans.

Commodity payments: The President’s budget would cut commodity payments across the board by five percent. The proposed cuts come on the heels of $2.7 billion in cuts over five years to commodity support programs enacted in the 2005 budget reconciliation bill.

Nutrition: Funding for food and nutrition programs would be decreased in 2007 by $39 million, from $5.516 billion to $5.477 billion. The Commodity Supplemental Food Program—a program that provides commodities to the elderly, low-income women, infants, and young children—would be eliminated.

Specialty crop programs: The President’s budget would eliminate $6.93 million for specialty crop block grants to states and $5.94 million for the six-state Fruit and Vegetable Pilot program.

Conservation: The President’s budget continues to fund conservation programs in the Farm Bill well below authorized levels. The budget would cut funding for conservation programs (Environmental Quality Incentive Program, Wildlife Habitat Incentive Program, and the Farmland Protection Program) by $29 million, from $1.134 billion to $1.105 billion in 2007. The Farm Bill authorized a total of $1.51 billion for these programs. The budget would also eliminate the Grasslands Reserve Program.

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