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BUDGET FIGHTS CONTINUE: Bush Asks for Deeper Cuts; Partisan Battles in Congress Erupt Over Cuts to Mandatory Spending Programs

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"Earlier this year I submitted the most disciplined proposal for nonsecurity discretionary spending since Ronald Reagan was in the White House," Bush said.

Over the last few weeks, Republican leaders in Congress have been working to cut spending for mandatory programs such as Medicaid, food stamps, and student loans. In an October 26 speech to the Economics Club of Washington, President Bush pushed for additional cuts that could affect discretionary spending, including education programs.

“Earlier this year I submitted the most disciplined proposal for nonsecurity discretionary spending since Ronald Reagan was in the White House,” Bush said. “My budget proposed an actual cut in spending on nonsecurity discretionary spending. Congress needs to make that cut real. I’m open to further across-the-board spending cuts as well.”

If enacted, an across-the-board spending cut would affect almost every program under the U.S. Department of Education, from Title I to GEAR UP and TRIO. As a result, several programs that had previously been frozen at last year’s funding level for fiscal year 2006 would see a decrease in funding compared to FY 2005.

President Bush also submitted a request for a $2.3 billion package of “rescissions” in order to pay for Hurricane Katrina cleanup. These rescissions would take back previously appropriated money from 55 programs, including more than $90 million from Smaller Learning Communities.

Congress Continues to Debate Reductions in Mandatory Spending Programs

Last week, Republican leadership in the U.S. House of Representatives decided to pull their version of a budget reconciliation bill that would cut $54 billion in federal spending over the next 5 years. The $54 billion included a $14.5 billion cut to student loans, a $9.5 billion reduction in Medicare spending, and an $844 million cut to the food stamp program, among others. Earlier this month, the Senate approved a bill that would cut $35 billion from the budget but largely avoid cuts to beneficiaries of federal antipoverty programs that the House measure contains.

Many Republicans believe the cuts are necessary to offset the rebuilding costs associated with the Gulf Cost hurricanes and will act as an important step in reducing the federal deficit. They also argue that their proposed changes would strengthen the programs by closing loopholes and reducing inefficiencies. Democrats, however, are quick to say that the cuts will not even pay for the $70 billion tax cut on which Republicans have already begun work-let alone make a dent in the budget deficit, which the Congressional Budget Office projects at $1.6 trillion over 5 years. Congress hopes to have all action completed before they adjourn around Thanksgiving.

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