House girds for vote on spending cuts

By Richard Cowan

WASHINGTON (Reuters) – The U.S. House of Representatives
may vote on Thursday on a controversial bill to cut $54 billion
in government spending that minority groups and some economists
are criticizing as harmful to the poor.

Acting Majority Leader Roy Blunt, a Missouri Republican,
promised a vote on Thursday, but acknowledged that some
moderate Republicans, who are key to the bill’s passage, have
come out against the measure.

“I don’t believe anybody is opposed to refining this
product in an appropriate way,” Blunt said. “We’re having a
significant discussion with our members.”

Critics have objected that the bill will cut into social
programs such as Medicare, Medicaid, child support and welfare
and even nutrition benefits for the poor. It will also save on
student loans for college.

The political risks of Thursday’s House vote are magnified
by the fact that it will come on the same day that a Senate
panel is expected to extend tax cuts on capital gains and
dividends, which would benefit mainly wealthy Americans and
cost the deficit-ridden U.S. Treasury about $25 billion.

The Senate Finance Committee bill would also extend some
expiring business tax breaks as well as provide about $7
billion in tax breaks to help rebuild Gulf coast areas ravaged
by Hurricanes Katrina, Rita and Wilma.

As House Republican leaders tried to shore up support for
the spending cuts, opponents stepped up their criticisms of the
bill.

The legislation “targets the most vulnerable of our
people,” said Rep. Grace Napolitano, head of the Congressional
Hispanic Caucus. She said low-income Latinos, African-Americans
and Asian-Americans would suffer the most.

The Congressional Budget Office has estimated that the
House bill would cut food stamp benefits by about $45 a month
for 225,000 people and that 40,000 children would lose their
eligibility for free meals at school. About 70,000 legal aliens
would no longer qualify for food stamps.

Blunt argued that would “have a very small overall impact”
on the food stamp program, which he claimed has grown 100
percent in the last five years.

The Department of Agriculture says the food stamp program
grew from $17 billion in 2000 to $27.1 billion in 2004. Some of
that growth was because the Republican-controlled Congress
expanded eligibility in 2002 as part of a bill raising farm
subsidies.

Robert Greenstein, executive director of the
liberal-leaning Center on Budget and Policy Priorities, said
that since some of the spending cuts phase in over five years,
a 10-year snapshot “gives a better feel of the full dimension
of the changes.”

According to the CBO, the $54 billion in savings over five
years proposed in the House bill would swell to about $130
billion over 10 years.

The Senate version of the legislation, passed last week,
would save about $36 billion over five years and would do so
without cutting food stamps or health care to poor or elderly
beneficiaries.

If the House passes its version of the spending cuts on
Thursday, the measure would move to a conference committee next
week where negotiators would try to reconcile the House and
Senate versions of the bill.

(additional reporting by Donna Smith)