Policy Resource

Triple Jeopardy for Babies: Deficit Reduction Deal Means No Fun And Games

Aug 15, 2011

The deficit reduction process laid out in the Budget Control Act (BCA), which finally allowed the nation the authority to borrow enough funds to pay its bills, places important infant-toddler programs in triple jeopardy for cuts at every step of the way.

Potential cuts to programs with discretionary funding—such as Early Head Start, child care, and Part C—would mean decreased access to early care and education, early intervention, and special nutrition services, as well as reduced access to adequate housing and energy support. Infant-toddler advocates should focus on educating Members of Congress about the important role these and other programs play in promoting healthy development in young children, and the long-term harm to children and our economic competitiveness if this development is jeopardized.

The BCA sets up a multi-step process to achieve the savings included in the law as the price for raising the debt ceiling. At this stage, it is impossible to say with certainty how individual programs important to infants and toddlers will fare, but we can sort out which programs are most at risk and when. To do so, it is important to understand the way programs are funded as well as the process by which deficit reduction savings will unfold.

Programs with discretionary funding:

Programs with discretionary funding have their funding levels set each year through the appropriations process. (For more information on discretionary spending and the appropriations process, see Babies and the Budget and our Glossary of Policy and Advocacy Terms). These include programs that help support the development of infants and toddlers. A handful of these programs specifically target children under age 3, including Early Head Start, Part C early intervention, and Supplemental Nutrition for Women, Infants, and Children (WIC). Discretionary funding covers many other programs important to infants, toddlers, and families, as well as the populace as a whole: housing, energy assistance, transportation, environmental protection, court systems and law enforcement and more.

Programs with mandatory funding:

Programs with mandatory funding do not have to go through the annual appropriations process to receive their funding, which is directed in the statutes that create them. Some, such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP), are entitlements to individuals, meaning that anyone who meets the eligibility criteria receives a benefit. Others, such as the Temporary Assistance to Needy Families (TANF) program, guarantee states a set amount of funds each year to meet the program’s purposes.

Steps in the BCA Deficit Reduction Process:

Step 1: The bill has already set funding caps for discretionary programs from 2012 to 2021, which will save $841 billion over 10 years. For the first two years, caps are set separately for security and non-security programs so that funds cannot be shifted from domestic to security-related spending. (This means that domestic programs cannot be required to absorb a greater share of the cuts in order to make up for shortfalls in cuts to security-related programs.). The 2012 cap is $44 billion less than 2011 funding. Additional Pell Grant funding in the BCA could relieve some of the pressure on Labor-HHS appropriations to provide for the increased number of students eligible for grants. Yet, there is no requirement that Congress appropriate the total amount available under the caps, so battles about funding levels for individual appropriations bills, as well as specific programs, still loom.

  • What’s on the cutting table: Discretionary programs only, which include programs important to infants, toddlers, and their families, such as: Early Head Start, Child Care and Development Block Grant, Part C, WIC, etc.
  • Outlook for babies: Jeopardy for babies, as discretionary cuts could affect programs important to them. Austerity will continue as the caps grow very little over the next 10 years.

Step 2: A Joint Select Committee, composed of 12 Members of the House and Senate, will submit a package of cuts and possibly revenue increases to reach the goal of at least $1.2 trillion in deficit reduction to the House and Senate, which must vote yes or no on the whole package. While revenue increases are a question mark, cuts are a certainty and could affect any mandatory or discretionary program. Thus, discretionary programs could be in for another round of cuts. Mandatory programs, especially Medicaid, also could be on the receiving end of cuts.

  • What’s on the table: All federal programs, no matter how funded. (You may have heard something about low-income programs being protected under the BCA. This is only partially true. While certain low-income programs are protected in the case of a sequester – see Step 3 and the table below – they remain on the cutting table for the Joint Select Committee)
  • Outlook for babies: Double Jeopardy for babies, as more cuts to discretionary programs could be included, taking effect in 2013. With Medicaid savings also a likely target, many infants and toddlers could see their access to adequate health care substantially reduced.

Step 3: An across-the-board cut, or sequester, will be triggered if the Joint Select Committee savings are rejected by Congress or the President, or are less than the $1.2 trillion minimum target. Automatic cuts would either secure the whole amount or make up the difference if enacted savings fall short. In a sequester, half of the cuts would have to come from domestic programs and half from defense, but this division does not apply to cuts proposed by the Joint Select Committee. Some programs with mandatory funding that affect vulnerable infants and toddlers would be protected, but discretionary programs could be subject to yet more cuts. In 2013, domestic discretionary programs could lose another $38 billion if no savings bill is passed.

  • What’s on the table: Discretionary programs, mandatory programs (except Medicaid, TANF, SNAP, SSI, child care with mandatory funding, foster care payments, and several others.)
  • Outlook for babies: Triple Jeopardy for babies, as discretionary programs such as Head Start/Early Head Start, Part C Early Intervention, discretionary child care, WIC and other programs could face their third round of cuts. Some critical programs with mandatory funding that support health and development of young children would be exempt from across-the-board cuts.

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