On a conference call with reporters, top labor officials and the head of a progressive coalition for education funding acknowledged that they would accept an offset to the education and Medicaid funding bill for budget-constrained states that would reduce expenditures on the federal food stamp program by $6.7 billion dollars starting in 2015. But they vowed to fight for the restoration of those funds in the intervening five years before the cuts take effect.
At issue are two measures designed to save hundreds of thousands of jobs in the health care and education sectors to supplement the budget of cash-strapped states. The bill, expected to get a cloture vote on Monday, would provide $10 billion for education jobs and roughly $16 billion for state Medicaid programs, to allow states to avoid cuts. Naomi Walker, Director of State Government Affairs for the AFL-CIO, said the $26 billion in funding “would help ease really serious state budget shortfalls.” Chuck Lovelace, the Legislative Director for AFSCME (American Federation of State, County and Municipal Employees), went further. “Without this money, we could go back into a recession.”
However, owing to “concerns raised by folks on both sides of the aisle,” according to Walker, Senate leaders added full offsets to pay for the funding. Joel Packer, the executive director of the Committee for Education Funding, said that their coalition initially expected edujobs and Medicaid funding to be considered emergencies that wouldn’t need offsets, but enough members of Congress didn’t see it that way to force the pay-fors. “This is a dilemma we’ve been forced into,” he said.
One of those pay-fors is a controversial piece that would cut funding for the SNAP program, commonly known as food stamps, by $6.7 billion dollars over the 10-year budget window. At first blush, that looks like cutting food assistance for the poor to pay for health care for the poor, a very bad trade. And food stamp spending is some of the most stimulative you can find, as all of that money gets into the economy because the people on the program really need to buy food.
I asked Chuck Lovelace if his union had any hesitancy to endorse a bill that did this much damage to the food stamp program. “We do have concerns,” he said. But he advised that the cuts, because of how they are structured, would not go into effect until 2015. “We intend to go back and work to restore that benefit at the appropriate time… From my union’s perspective, we will go back and get that back.” Everyone else on the call agreed.
The officials were asked by another reporter why the Senate didn’t include something that didn’t hit the poor, like closing the carried interest loophole that allows money managers to drastically reduce their income tax rate. Naomi Walker pointed out that a tax loophole that encouraged companies to outsource jobs is in the bill. “Carried interest is something we support, but we didn’t need as much revenue as that creates because this is a smaller package” than the tax extenders bill where the carried interest loophole was initially addressed, she said.
This isn’t true. The carried interest loophole initially would have saved the government around $18 billion dollars, according to CBO estimates. A new version that resulted from negotiations over the tax extenders bill would have lowered that offset to $13.6 billion. Either way, that’s well below the $26.1 billion spent on this measure, meaning that food stamp cuts could easily have been swapped out in favor of closing the loophole. It’s a question of priorities.
To add tragedy to this whole process, a terrible Air Force cargo plane crash killed three National Guard members in Alaska today, and the funeral is planned for Monday. Both Senators from Alaska, Republican Lisa Murkowski and Democrat Mark Begich, want to attend the funeral, but if Begich cannot make the 5:00pm ET vote, it becomes that much harder to invoke cloture. The way the Senate works is that you need 60 votes for cloture, not 41 against, and so the onus is on the party trying to close debate. In any other walk of life, going to a funeral would have no consequences for your job, but in this case, Begich’s potential absence has possible consequences throughout the country. Such is the broken Senate.
Everyone on the call mentioned Olympia Snowe and Susan Collins as possible Republican votes for cloture. Both have expressed support for the state Medicaid funding, but wanted a paid-for bill, which this is. Collins wanted the Medicaid funding to phase out over time, and it does. Snowe wanted a particular offset dealing with small businesses removed, and it is. They have no excuses left.