Our View of the Federal Deficit Deal

Arkansas Advocates for Children and Families Statement on Deficit Reduction Deal

Today’s vote on the deficit deal will keep America from defaulting on its financial obligations and prevent a collapse of the nation’s economy. It had to be done. Unfortunately, the approach taken by lawmakers not only threatens our economic nation’s future, but further threatens the well-being of children and families who have already suffered because of the recession.

Under the agreement, nearly $1.2 trillion in cuts will have to be made to discretionary (non-entitlement) programs-especially in education-during the next 10 years. While some critical programs for low income children-such as Medicaid, CHIP (Children’s Health Insurance Program) and SNAP (Supplemental Nutrition Assistance)-are protected during the initial round of budget cuts, the long-term funding for these and other essential programs serving vulnerable children remains in doubt. The Joint Select Committee on Deficit Reduction will include 12 members of Congress-half from each party and half from each chamber. It must make an additional $1.5 trillion in cuts during the next decade. While tough budgeting sometimes requires tough choices, this agreement reduces spending on essential programs for children and hurts our ability to ensure all children have the resources and opportunities to lead healthy and productive lives and realize their full potential.

Under the agreement, the only way to avoid draconian, across-the-board cuts that will decimate programs serving children and families is to see a serious compromise among the members of the committee. That scenario is unlikely in the current political environment. As we recently saw, there are too many people in Washington who refuse to compromise. Speaker Boehner has already announced that he will not appoint anyone to the committee who considers including closing tax loopholes for corporations and billionaires as a way to reduce the deficit.

We continue to advocate a balanced approach to deficit reduction. This legislation, in contrast, has no balance. It asks middle class families to shoulder the burden of the debt crisis while corporations, billionaires, and millionaires are asked to do nothing. Meanwhile, regular working people in Arkansas have just been told that they need to work harder and expect fewer of the services that we all rely on for economic security.

There is a major risk that the agreement will hurt economic growth and the nation’s ability to create jobs. In a poor state like Arkansas, pulling back low-income programs not only threatens the economic stability of families, but hurts our economic prospects. In Arkansas we see the benefit of programs like Medicaid every day. A Walton School of Business study, for example, showed that each Medicaid dollar spent in Arkansas creates $6 in economic activity. Cuts to Medicaid represent an immediate and severe cut to the state’s economic well-being.

Arkansas’s elected leaders helped to avoid catastrophic default in the short term. For that we are grateful. However, we hope that future budget decisions will create jobs rather than pull money out of the economy at this critical stage. Those decisions should be made with children as the nation’s highest priority, rather than as an afterthought.