Policy Resource

Will the Nation Default on its Responsibility to Babies?

Aug 1, 2011

Over the weekend, the President and bipartisan congressional leaders reached an agreement to raise the federal debt limit and reduce deficits over the next ten years.

The House is expected to vote on the bipartisan deal later this evening, and, assuming that the measure passes the House, a Senate vote will be held tomorrow. Although the passage of this deal would prevent the U.S. from defaulting on its debt, the deficit reduction measures contained in the plan threaten funding for vital programs and services that protect and support young children’s healthy development. While the agreement provides potential short-term relief from an already dire budget atmosphere, the needs of our nation’s youngest and most vulnerable children must not be ignored.

The Deal: The Budget Control Act of 2011

The deficit reduction component of the deal will come from drastic cuts to federal spending. While revenue increases will be considered in the future, they are not presently included in the plan. In total, the deal would raise the debt ceiling by $2.4 trillion, allowing the U.S. to continue to pay its bills into 2013, and reduce the deficit by at least $2.1 trillion over the course of a decade.

The plan will be implemented in two parts, each with its own set of implications for infants, toddlers, and their families:

Phase 1 takes place immediately, raising the debt ceiling by an initial $400 billion and cutting approximately $1 trillion over 10 years through caps on discretionary spending. These caps will reduce domestic discretionary spending to their lowest levels since Dwight Eisenhower was president.

For infants and toddlers, these reductions are particularly disconcerting. Discretionary spending funds many of the programs that low-income and at-risk babies rely on, including Early Head Start, CCDBG, IDEA Part C, and certain child welfare services, just to name a few. Cutting these programs threatens our nation’s prosperity in the long run by failing to invest in the healthy early development so critical to children’s future success. In the short-term, it leaves babies without quality early education, early intervention, and other support services that they and their families rely on.

Phase 2 gives the president the authority to raise the debt ceiling by the remaining $2 trillion. In order to do so, the president must establish a bipartisan committee to form a plan by late November that will reduce the deficit by another $1.5 trillion.This $1.5 trillion will come from further cuts to both discretionary and mandatory spending. The committee may also consider revenue increases to make up part of this sum, but it is unlikely that they would make it into any final plan. If the committee is unable to agree on a plan to cut the deficit by $1.5 trillion, the Budget Control Act would trigger $1.2 trillion in automatic, across-the-board cuts to discretionary and mandatory spending beginning in 2013. This trigger would divide cuts equally between defense and non-defense programs while exempting Social Security, Medicaid, and certain low-income programs from reductions. While these low-income programs have not yet been specifically identified, it is likely that many programs serving low-income infants and toddlers will not be protected.

What we know:

Assuming passage of the Budget Control Act, the U.S. will not default on its debt come Wednesday morning. The country’s borrowing power will be extended into 2013. And over the next decade, the Act requires at least $2.1 trillion in deficit reduction. What we don’t know is how this deficit reduction will be achieved and where the cuts will come from. In some phases of the plan, certain low-income programs are protected; but many programs for low-income infants and toddlers are not likely to be included in that list.

Given the scale of these required cuts and the unlikelihood of revenue increases, we can expect severe reductions to the programs that infants, toddlers, and their families rely on and that we all care about. With the passage of the Budget Control Act we will have avoided defaulting on payments to our creditors; but we face a new challenge to avoid defaulting on our responsibility to babies.

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