Letter to the House Budget Committee Opposing the Ryan Budget
March 21, 2012
On behalf of the 3.2 million members of the National Education Association (NEA), we would like to express our strong opposition to the FY 2013 budget proposal being marked-up in committee this week. The budget resolution should reflect the priorities of our nation. Unfortunately, the proposed budget reflects the wrong priorities, choosing to meet arbitrary budget targets on the backs of the middle class and our most vulnerable populations. We urge you to
- Vote NO on the Ryan budget.
- Vote YES on an amendment by Representative Honda that will add funding to Function 500 to block any cuts to education.
- Vote YES on an amendment by Representative Bass to keep the student loan interest rate at 3.4 percent for one more year.
- Vote YES on an amendment by Representative Doggett to make the American Opportunity Tax Credit permanent and block all cuts to Head Start.
Actions in committee on these issues may be included in the NEA Legislative Report Card for the 112th Congress.
Our nation is at a crossroads, having to choose between two starkly different visions for our future. We can ensure everyone a fair shot, make the investments necessary for economic growth, and stand up for the middle class and our most vulnerable populations. Or, we can continue to allow those who can most afford to pay their fair share to avoid doing so. Shamefully, the Ryan budget chooses this latter path, opting to place the burden for the nation’s financial crisis squarely on the shoulders of the middle class and the poor, while failing to ask anything of those most able to contribute toward economic recovery.
Investing in education should be a top priority for the budget resolution. Yet, the proposed budget will subject education and other domestic priorities to additional dramatic cuts beyond those agreed to in last year’s Budget Control Act. This shortsighted policy will jeopardize our students’ and our nation’s future. Funding targeted to quality public schools will see the greatest return on taxpayer money and will strengthen the entire economy. When we invest in public education, lower and middle incomes grow even more than upper incomes, positively impacting businesses’ bottom line as lower-income people spend their new income on consumer goods and services. In a typical state, investing two percent more in public education generates 3,900 new jobs and $92 million in new personal income. An equal tax cut generates less than half those gains — 1,500 new jobs and $41 million in new personal income. (Richard Sims, NEA Research, previously Director, Institute on Taxation and Economic Policy, 2011). The real rate of return on investments in education and training programs — in terms of payoff to lifetime earnings relative to the upfront costs — is 5 to 15 percent per year. (Jason Bendor, Jason Bordoff and Joshua Furman. “An Education Strategy to Promote Opportunity, Prosperity, and Growth,” The Brookings Institution, 2007).
We strongly oppose the Ryan plan’s exclusive focus on program cuts, with no attempt to find a balanced approach to deficit reduction. The plan not only excludes any revenue raisers, it actually decreases revenue by some $4 trillion. At the same time, it cuts spending by $5.3 trillion over the next 10 years. In so doing, the Ryan budget makes a mockery of shared responsibility.
Our specific areas of opposition include:
- Cutting discretionary spending by billions more beyond the 10-year reductions agreed to last summer. Specifically, the Ryan budget proposes to reduce combined mandatory and discretionary spending for Function 500 education programs by $9.5 billion below the baseline. Under last year’s Budget Control Act, non-security discretionary spending already took a huge hit as the source for the bulk of deficit reduction — a devastating blow to children, working families, and our most vulnerable populations. Additional, draconian cuts will unavoidably harm critical education programs, hurt the neediest students, cause class sizes to rise even further, force elimination of more programs aimed at providing a well-rounded education, and put more public servants in unemployment lines. Our nation’s economic strength and future success depend on our ability to innovate, educate, and compete in the global marketplace. Failing to invest when investment is called for is a plan for permanent austerity, not long-term success.
- Lowering taxes by more than $1 trillion over ten years and providing the wealthiest with an average tax cut of $150,000. The Ryan budget completely rejects any sort of balanced approach to deficit reduction, ignoring the fact that increasing revenues is an essential piece to successful economic recovery. The single largest contributing factor to the deficit is the tax cuts enacted under the last administration and renewed in 2010. It cost our nation $700 billion to extend the tax cuts for single filers earning over $200,000 a year and joint filers earning over $250,000. CBO numbers show that by the end of this decade well over half of the deficit will have resulted from these tax cuts, and this share will continue to grow after that.
In addition, the increasing erosion of the corporate tax base has brought us to the point today where, measured by either corporate taxes as a percentage of GDP or corporate taxes as a percentage of overall tax revenues, the US ranks substantially below other OECD nations. As many as two out of three US corporations paid zero in federal income taxes over much of the previous decade, according to the GAO. The share of federal revenues coming from corporate taxes has shrunk by two-thirds in the last fifty years. This is seriously undermining our ability to make the necessary investments in education that are sorely needed in order to return our nation to prosperity.
- Dismantling health care and anti-hunger programs for the poor, disabled, and elderly. Under the proposed budget, Medicaid would be cut by one-third over a decade. The Medicaid block grant proposal would actually cost states and the federal government more money due to cut backs and limits on health care services for Medicaid beneficiaries. It is clear that the proposed changes to Medicaid would put additional pressures on stretched state budgets and would, therefore, have a direct, negative impact on the resources available for students and schools.
We are also deeply concerned about the impact of this proposal on the students in our schools. Of the 68 million people covered by Medicaid, half are children under the age of 19, whose families depend on Medicaid for health care coverage. One third of our nation’s children rely on Medicaid for their health care. Children who lack access to health care services are less likely to come to school healthy and ready to learn and to succeed academically.
We also oppose the proposed block grant of SNAP — the Supplemental Nutrition Assistance Program. Most SNAP recipients are children or seniors. NEA members know first-hand that hungry children cannot learn, and that access to an adequate and healthy diet is essential to academic success. The link between good nutrition and learning is evident in schools across the nation every day. Yet, far too many children lack consistent access to an adequate, nutritious diet. Hungry children are often irritable, feel ill, and lack concentration. In contrast, students who come to class well-nourished have fewer behavioral and attendance problems, and have higher test scores.
- Repealing the Affordable Care Act. NEA members see first-hand every day the importance of access to health care for children’s success in school. Students struggle to learn if they do not come to school healthy. Families with access to regular medical care are more likely to keep the entire family healthy and create a better learning environment within the home. Repealing the Affordable Care Act would be devastating to millions of children and their families. It would take away coverage from 32 million Americans who would be uninsured without the new law, including many students sitting in NEA members’ classrooms every day. According to the Congressional Budget Office, repeal would explode the national deficit, increasing it by $230 billion in the first decade.
- Shifting substantial costs to Medicare beneficiaries. The proposed premium support plan would shift substantial costs to beneficiaries rather than protect them from cost increases, in part because the payment they would receive to help buy coverage would likely fail to keep pace with health care costs. The plan also would likely lead to the gradual demise of traditional Medicare by making the pool of beneficiaries smaller, older, and sicker — and increasingly costly to cover.
- Shrinking the federal work force by 10 percent and extending a salary freeze through 2015. Sixty-two percent of federal workers across the nation only earn between $25,000 and $75,000 a year. Every day federal employees provide essential services to the American people, including educating the children of our nation’s military families. Federal workers are already facing compensation cuts and job losses, as agencies budgets are downsized under federal mandate. And, they have already made significant sacrifices to help reduce the national deficit by accepting a two-year pay freeze, resulting in $60 billion in savings. A federal worker who makes $50,000 per year at the end of a 30-year career receives a federal pension of just $15,000 per year. Federal employees have come to rely on decent benefits in lieu of pay. Instead of asking further sacrifice of these middle class workers, we should be calling on the wealthiest in our nation to do their part.
We urge the committee to support an amendment by Representative Honda that would add funding back for Function 500 to protect critical programs such as Title I, special education, and Impact Aid and to help turn around struggling schools. The amendment would pay for restoring this critical funding by eliminating egregious tax earmarks, tariff reductions, and loopholes in the international corporate tax system and cancelling the 2001/2003/2010 tax cuts for millionaires after they expire at the end of 2012. In so doing, it would set the right priorities for fostering student achievement and economic growth.
We also urge your support for an amendment by Representative Bass that would fund a one-year moratorium on the doubling of student loan interest rates (from 3.4 to 6.8%) scheduled for this summer. Finally, we urge your support for an amendment by Representative Doggett to make the American Opportunity Tax Credit permanent and block cuts to Head Start. Like the Honda amendment, these amendments are deficit neutral.
The Ryan budget ignores the bipartisan budget deal reached last summer. Worse, it ignores the needs of millions of struggling middle class families and those who have fallen out of the middle class. It leaves the majority of Americans to fend for themselves, while pandering to a small percentage of wealthy individuals. The Ryan budget runs completely counter to our values as a nation, by failing to take care of those most in need while sparing those at higher income levels. It asks our children, working families, seniors, and disabled populations to make greater sacrifices than others. We urge you to reject this ill-conceived proposal.
Director, Center for Advocacy
Director of Government Relations