American Forum Op-Ed

By Daniella Levine

Save lives or save money for the rich? Feed hungry children or subsidize the oil and gas industry? Stop buying ineffective military equipment or stop paying for job training? These questions are at the heart of the debate over reducing the federal deficit and raising the debt ceiling.

Negotiations are underway between Congressional leaders and President Obama and it’s clear that all parties want to significantly reduce the deficit.

But, there’s deep disagreement over how to achieve that goal. It’s time for Florida’s Congressional delegation to speak up on behalf of a balanced approach that makes prudent spending cuts and generates new revenue by asking a little more from those with the most.

Right now, many in Congress are rejecting any increase in federal revenues. They have embraced only spending cuts, including many that will harm vulnerable people and the economy as a whole.

Due to the secrecy of discussions, it’s not always easy to tell what cuts are on the table, but we know that some of the proposed cuts would:

• Reduce healthcare for millions and eliminate at least 250,000 jobs in the health care industry;

• Leave hundreds of thousands of infants and young children hungry, putting their development and education at risk; and
• Eliminate scholarships for 1.4 million college students.

Proposals to cut Medicaid range between $100 billion and $1.4 trillion over the next decade. Even a cut of $100 billion would represent a 5 percent reduction in federal funding for state Medicaid programs. A cut of that magnitude would force states to reduce reimbursements to doctors and hospitals which would drive more physicians out of the Medicaid program. And, states will end coverage or increase costs to individuals who have no other options for health insurance. Here in Florida, we have already cut over $1 billion in Medicaid reimbursement rates to hospitals and nursing homes and nearly 4 million people are uninsured. A recent study in Oregon confirmed what common sense tells us: when people don’t have Medicaid they go without needed healthcare.

Medicaid cuts will also hurt our economy. According to a study by Families USA, a 5 percent Medicaid cut in 2011 will cost more than 250,000 jobs nationwide. Here in Florida such a cut would mean $1.2 billion in lost business activity and 11,320 fewer jobs. That’s not what our economy needs.

Even worse, imagine if the cuts were more than 10 times that amount as some propose. Estimates suggest that 19 million people would lose health care coverage, and another 17 million people would lose the right to receive health care coverage through the Affordable Care Act.

Arbitrary caps on annual spending, which are also on the table, would force additional cuts to programs that serve the vulnerable. The House has already adopted a budget plan that would end nutrition benefits for 300,000 and 450,000 low-income infants, young children and moms through the Women, Infants and Children program next year alone.

That would be a terrible mistake. Children that don’t reliably get enough food are more likely to be sick, hospitalized and fall behind in school, which weakens their development and reduces their ability to contribute to our economy. The same House plan would also eliminate Pell grants for 1.4 million low-income students, including nearly 83,000 Floridians, all but ending their ability to go to college. This short-sighted proposal comes at a time when our economy needs 3 million more college graduates than we are currently expected to have by 2018. How can we compete if we don’t give people the tools to work tomorrow’s jobs?

We don’t have to hurt people now and shortchange our future. We don’t have to leave our tax revenues at their lowest share of the economy since 1950. David Stockman, former budget chief for Ronald Reagan, points out that taxing capital gains at the same level as earned income would raise billions and strengthen our economy. Closing tax loopholes for corporations sheltering profits overseas, eliminating subsidies for oil, gas and coal industries, and taxing hedge fund managers’ income as income instead of capital gains are three other proposals out of many that could increase federal revenues without burdening middle class Americans. Hundreds of billions in savings are possible by reducing wasteful military spending too.

Florida’s Congressional delegation should insist on protecting low-income people from bearing the burden of cuts and support raising revenues from those who have been enjoying trillions in tax breaks for years. It’s the right thing to do, for today and our future.
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Levine is president/CEO of Catalyst Miami (formerly Human Services Coalition), a nonprofit human services organization.
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Copyright (C) 2011 by the Florida Forum. 7/11