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House girds for vote on spending cuts

Posted on: Tuesday, 8 November 2005, 17:54 CST

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)

Source: REUTERS

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