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Tom Harkin's Blog

April 20, 2012

Harkin: U.S. House of Representatives Budget Plan

Recently, the U.S. House of Representatives passed a budget plan for 2013. The plan proposes large tax cuts for wealthy individuals and corporations while slashing a wide range of core government functions, including health, education, research, transportation, and assistance to local governments. The House budget would cut taxes for individuals making over $1 million by roughly $150,000 per year while crippling improvements in our nation’s infrastructure and dismantling the safety net for seniors, children, and persons with disabilities. This plan is a direct affront to ordinary Americans and falls well outside the mainstream of modern political thought about the appropriate role of the federal government. It also displays a remarkable lack of understanding of the role that public investments in key areas like education and infrastructure have played in enabling America to excel in a global economy. Because I believe it is important that Iowa’s civic leaders and public officials be aware of what’s happening in Washington, here is some additional information about the House budget proposal and the impact it would have were it to become law.

1. Transportation

The House budget plan sets overall spending on transportation infrastructure – including roads, transit, aviation, rail, and waterways – at $57 billion in 2013, a reduction of more than one-third from current levels. Over the next five years, the House budget would reduce transportation funding by 32% compared to the President’s budget proposal.

Cuts of this magnitude would decimate our ability to maintain a surface transportation system that is already in dire need of new investment. In Iowa, this plan would result in the loss of thousands of jobs and millions of dollars for the Iowa Department of Transportation and local governments to spend on critical infrastructure and transportation needs. This approach makes little sense at a time when most experts say that we need to significantly increase spending in order to restore and maintain our existing infrastructure while strategically investing in new projects that will provide the pathway for future economic growth. In fact, a comprehensive report released in 2009 found that $2.2 trillion of new investment over five years was needed to bring our nation’s infrastructure into a state of good repair. The House plan further threatens our progress in developing a 21st century infrastructure that will create jobs, boost the economy, and make us more competitive in the global economy.

2. Community Development

The House budget slashes funding for community and regional development initiatives, including Community Development Block Grants (CDBG) and Economic Development Administration (EDA) assistance. Both have a proven track record of success. CDBG funds, which the House budget proposes eliminating entirely, are a critically important tool for revitalizing low- and moderate-income areas. CDBG helps fund a range of projects, including housing and neighborhood improvements, sewer and water improvements, and other economic development projects.

Rather than cutting funding for these effective programs, we should increase funding. In Iowa, there has been intense competition for diminishing CDBG funds in recent years. The federal CDBG allocation to Iowa in 2012 will be $33 million, a 25% drop since 2010. These levels are inadequate considering the obvious need on the ground. As a result, I recently joined other senators and sent a letter to leaders of the Senate committee that determines funding for CDBG requesting that funding be restored to adequate levels in 2013.

The House budget proposal to cut funding for CDBG and EDA is just one part of a broader proposal to slash billions of dollars from a wide range of community and economic development efforts. These would severely damage the ability of local governments to meet community development needs.

3. Disaster relief

The House budget could require disaster relief to be offset with cuts in spending elsewhere in the budget. If enforced, this requirement would roll back a bipartisan agreement struck last summer, which established a disaster relief budget that would not have to be offset.

In the past, emergency disaster relief was rarely offset. Last fall, when members of the House of Representatives began demanding offsetting cuts to pay for the cost of disaster recovery, Congress was much slower to provide emergency funding for a range of disasters that struck across the country and the amount of funding provided was considerably lower in many areas. This was unfair to communities that were devastated, and I fear that if offsetting disaster spending becomes the norm, communities will not receive the levels of disaster assistance needed for complete recovery.

In the wake of the 1993 and 2008 floods and an array of other smaller disasters, Iowa has received billions in assistance to help our cities recover and improve our ability to prepare for future disasters. Without that assistance, recovery from disasters would have been far more difficult.

There is no reason to move away from the compromise agreed to last August, which protects taxpayers while providing communities with the funds they need in the wake of a disaster.

The United States remains the wealthiest nation in history. The most dangerous deficit we face is not a deficit of dollars, but of vision – our failure to confront the economic challenges of our day with the boldness that earlier generations of Americans summoned in times of crisis.

Rather than a pessimistic budget, which says America can’t afford to maintain and rebuild the middle class, I believe we need a budget that creates a better future – one that creates jobs, keeps our promises to seniors, educates our children, and reduces the deficit with smart spending cuts and by asking millionaires and billionaires to pay their fair share.

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