Oct. 11, 2005 – Facing steep costs associated with the cleanup of Hurricane Katrina and wars in Iraq and Afghanistan, together costing more than $5 billion a month, fiscally conservative legislators are seeking to roll back federal spending across the board with social programs taking the biggest hit. At the same time, they are considering a new round of tax cuts to the wealthy.
By calling for all agencies to cut spending by 2 percent, House leaders are looking to slash funding for Medicare and programs other than those already slated for cuts last spring.
Earlier this year, Congress approved budget measures cutting billions in spending on government health care and other social programs, as well as billions in tax breaks favoring the rich, but lawmakers had been unsuccessful in negotiating a compromise bill before Hurricanes Katrina and Rita exposed serious problems in the national safety net.
The 2005 fiscal year closed at the end of September with both chambers of Congress unable to agree on a new funding bill, instead relying on a measure known as a "continuing resolution," holding federal spending to 2005 levels and restricting the implementation of programs that would mandate a spending increase.
With federal spending skyrocketing and large portions of the Gulf Coast crying out for more funding, a large number of groups have been warning that further budget cuts will force struggling agencies under.
According to OMB Watch, a non-profit progressive watchdog that tracks federal spending, the decision to operate under the continuing resolution is a de facto spending cut and "clearly bears the handprint of the Republican philosophy of shrinking or eliminating important government investments at any opportunity."
The group said the failure to keep pace with inflation and other growing expenses "will interrupt normal operations for many programs and agencies."
According to an analysis of the disputed spring budget measure by the Coalition on Human Needs â€“ an alliance of labor, civil liberties, religious and other groups â€“ the resolution "makes room for $100 billion in tax cuts over the next five years," including an extension of capital-gains and dividend tax breaks.
Current Congressional proposals call for cutting spending on social programs by $50 billion, $15 billion more than previously approved cuts, the Washington Post reported. Most of the additional savings would reportedly come out of Medicare restructuring.