Policy Resource

Budget Fog: No Clearing in Sight

Mar 9, 2011

The topics of deficit reduction and the need to raise the debt ceiling hang over Washington like ground fog, seeping into every discussion of the budget and appropriations process for the upcoming fiscal year that starts in October.

Some lawmakers are insisting that a plan for cutting the federal deficit be in place before they will vote to raise the limit on the amount the U.S. can borrow to pay its bills. A debt-ceiling bill must be passed soon to prevent the U.S. from defaulting on its debts, providing potent leverage to secure some agreement.

The catch is that no consensus on methods for attacking the deficit problem is at hand. One side or the other objects to putting big ticket items such as Medicare, Social Security, or tax increases on the table at this point. The most prominent proposal would place stringent caps on federal spending as a proportion of the total U.S. economy, or Gross Domestic Product. Vice-President Biden is leading an effort to find some common ground on a level of savings through cuts as well as budget controls such as caps on spending or on the deficit itself. Such an agreement might clear the way for a bill to raise the debt ceiling. Major decisions about taxes and entitlements are expected to be put off until much later.

Meanwhile, the regular annual budget process is creeping along. The Senate Budget Committee may reveal its take on the federal budget this week, a counterpart to the House budget resolution passed a few weeks ago. Appropriations Subcommittees are holding hearings on 2012 funding for discretionary programs without knowing overall spending limits. No one is sure where all of these tracks may lead, as policymakers and their staff feel their way through a process that is even murkier than usual.

In the midst of this foggy landscape, babies and toddlers remain at risk. Stringent caps on federal spending would most likely require deep cuts in domestic funding, both discretionary and mandatory. As other major entitlement programs are taken off the table, Medicaid and other programs for low-income families with mandatory funding could still be vulnerable. Discretionary programs, which include programs such as Early Head Start, child care, and early intervention so important to supporting early childhood development, remain a perennial target.

Policymakers need to hear from infant-toddler advocates that cuts should not be blindly targeted, with the result that our fiscal deficit is replaced with a human one. Rather, the budget, as well as efforts to rein in the deficit, should be structured to serve our society’s interest in building for the future. Programs that support the positive early development of the most vulnerable infants and toddlers will pay off in the long run as we prepare the workforce that will help ensure future national prosperity. Any approach for reducing the deficit should protect programs for vulnerable children and families as well as look at remedies in both the spending and revenue sides of the budget.

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