Summary and Analysis of the
President's 2005 Budget

Harmful Cuts

Cuts that Hurt Working Families

• Freezes Funding for Child Care — The budget once again freezes funding for the Child Care and Development Fund (CCDF) at the 2004 enacted level of $4.8 billion, providing $2.1 billion in appropriations for the Child Care and Development Block Grant, and $2.7 billion in mandatory child care funding to the states. The budget assumes block grant funding will decline by $53 million in 2006 and remain below the 2004 level in 2007-2009. The budget provides flat funding for the mandatory program through 2009. Total federal resources for child care also include TANF and Social Services Block Grant funds spent on child care at state discretion. Considering all funding available for child care, the budget projects that the number of children receiving assistance will decline from 2.5 million in 2003 to 2.2 million in 2009. Meanwhile, the President's plan to increase work requirements for welfare recipients will increase the demand for affordable child care.
  
  
• Cuts Section 8 Housing Choice Voucher Funding — The budget provides $18.5 billion for the Section 8 housing programs (funded in part with a $1.6 billion recapture of unobligated balances), which is $791 million below the 2004 enacted program level. The 2005 total is $2.0 billion, or 9.8 percent, below the amount CBO estimates is necessary to maintain purchasing power at the 2004 level and to renew all expiring voucher contracts. At the President's funding level the number of families served by this program could decline by more than 250,000. Without the $1.6 billion recapture, the Section 8 shortfall would be $3.6 billion.
  
  
• Eliminates Funding for Rehabilitation of Distressed Public Housing — Once again, the budget zeroes out funding for the HOPE VI program, a program that has successfully transformed severely distressed public housing projects into vibrant mixed-income neighborhoods. This program was funded at $570 million in 2003 but only $149 million in 2004.
  
  
• Erodes Funding for Public Housing Capital and Operating Funds — The budget provides $3.6 billion to pay local public housing authorities for operating costs not covered by rental income, plus $2.7 billion for capital repairs and improvements. The total provided for these two funds is $28 million below the 2004 enacted level, and it is $97 million below the amount CBO estimates is necessary to maintain purchasing power at the 2004 level. When funding falls short of capital and operating costs, local housing authorities often have no alternative but to let some units sit empty, thereby decreasing the supply of affordable housing available to low-income families.
  
  

Cuts to Homeland Security

• First Responders — The budget includes a total of $3.8 billion within the Department of Homeland Security for first responder funding, which is $648 million (14.7 percent) less than the amount enacted for 2004. Within this total, the budget doubles funding for specific high-threat urban areas to $1.5 billion, but decreases formula-based grants to $1.4 billion, $821 million (36.5 percent) less than enacted for 2004. The budget provides $500 million for firefighter assistance grants, $246 million (33.0 percent) less than the 2004 enacted level. (Elsewhere in the budget, in the budget for the Department of Justice, law enforcement grant programs are reorganized and their funding sharply reduced.)
  
  
• Port Security Grants — The budget includes up to $46 million for grants to port authorities for security upgrades — $79 million (63.2 percent) less than the $125 million enacted for 2004. Port security grants from the Department of Homeland Security provide funds for port agencies to install the fencing, surveillance technologies, and other measures needed to prevent terrorists from gaining access to docks and other port facilities. The Coast Guard reports needs in this area totaling $4.4 billion over ten years.
  
  

Cuts to Veterans

• Cuts Funding for Veterans Medical Care — The President's 2005 budget provides $29.8 billion for appropriated veterans programs, which is $257 million below the amount that CBO estimates is needed to maintain purchasing power at the 2004 level. Almost all appropriated funding for veterans pays for medical care and hospital services. Over five years, the budget for appropriated programs for veterans is $13.5 billion (8.5 percent) below the amount needed to maintain programs and services at the 2004 level. The Secretary of Veterans Affairs has testified that the VA budget is $1.2 billion below the amount the VA asked the Administration for.
  
  

• Vocational Education — The budget provides $1.0 billion in a new block grant for vocational education, a cut of $316 million (23.8 percent) from the 2004 enacted level. This cut occurs despite the President's emphasis on a "Jobs for the 21st Century" initiative to ensure that all students are ready to succeed in the workforce and in postsecondary education.
  
  
• Perkins Loans — The budget provides $67 million for Perkins loans, $99 million below the 2004 enacted level and $101 million (60.3 percent) below the amount needed to maintain purchasing power at the 2004 level. The budget eliminates the Perkins Loans capital contributions program and freezes the other campus-based aid programs at the 2004 enacted level.
  
  
• Reading Programs — The budget includes $1.4 billion for reading programs within the Department of Education, which is $8 million below the 2004 enacted level. The President touts a new $100 million reading program for high school students and a $139 million increase for Reading First, but the budget eliminates the $247 million Even Start family literacy program to pay for these increases.
  
  
• Employment Training — The budget block grants four employment training programs (adult training, dislocated worker activities, employment service state grants, and grants to states for reemployment services) and cuts their funding by $151 million, to $3.0 billion.

Cuts That Hurt Rural America

• Slashes Rural Health Activities — The budget provides $30 million for rural health activities, a $78 million cut (72.2 percent) from the 2004 enacted level.
  
  
• Rural Community Advancement Cut — The Rural Community Advancement (RCA) program provides grants, loans, and loan guarantees to stimulate economic growth and build facilities in rural communities. The budget provides $542 million for the Rural Community Advancement program, a $183 million (25.2 percent) cut below the 2004 enacted level, and a $191 million (26.1 percent) cut below the amount needed to maintain purchasing power at the 2003 level.
  
  
• Funding Cuts for the Essential Air Service (EAS) and Small Community Air Service Programs — The President's 2005 budget cuts funding 50 percent for the EAS program by establishing a $50 million cap. The proposal would also create three categories of communities based on distance to a hub airport and establish cost-sharing criteria.

  In addition, the President does not include any funds for the Small Community Air Service Program. Congress authorized $35 million per year for this program as part of last year's Federal Aviation Administration (FAA) reauthorization bill (although only $20 million was provided in 2004 funding).
  
  

Cuts that Weaken Our Communities

• Cuts State and Local Criminal Justice and Juvenile Justice — State and local criminal justice and juvenile justice assistance programs center on helping communities to combat and deter crime. The budget cuts the Violence Against Women Act programs, providing $362 million, a $22 million (5.7 percent) cut below the 2004 enacted level, and a $26 million (6.7 percent) cut below the amount needed to maintain purchasing power at the 2004 level. The budget also cuts Juvenile Justice and Delinquency Prevention Act grants, providing $198 million, a $151 million (43.3 percent) cut below the 2004 enacted level, and a $155 million (43.9 percent ) cut below the amount needed to maintain purchasing power at the 2004 level. The budget eliminates a variety of programs, including: Edward Byrne formula and discretionary grants; the State Criminal Alien Assistance Program; and Local Law Enforcement Block Grants. The eliminated programs alone would require $1.3 billion in 2005 to maintain funding at the 2004 enacted level.
  
  
• Cuts Community Oriented Policing Services (COPS) — COPS provides grants and other assistance to help communities hire, train, and retain police officers and improve law enforcement technologies. The budget slashes the COPS program, providing only $97 million, a $659 million (87.0 percent) cut below the 2004 enacted level, and a $655 million cut (87.0 percent) cut below the amount needed to maintain purchasing power at the 2004 level.
  
  
• Empowerment Zones Eliminated — Empowerment Zones target funds to revitalize economically distressed urban and rural communities and attract private investment in those communities. The budget eliminates funds for urban and rural empowerment zones. Empowerment zones also have tax incentives which the budget will not repeal. To maintain purchasing power at the 2004 level, urban empowerment zones would require $15 million and rural empowerment zones would require $13 million.
  
  
• Brownfields Redevelopment Program Eliminated — The Brownfields Redevelopment Program provides competitive economic development grants under the Department of Housing and Urban Development for brownfield projects. The budget eliminates funding for the program, which would require $25 million to be funded at the 2004 level.


Cuts to Health

• Slashes Health Professions Training — The budget funds Health Professions Training Programs at $158 million, a $278 million (63.8 percent) cut from the 2004 enacted level.
  
  
• Cuts Community Access Program (CAP) — The budget cuts the Community Access Program by $94 million (90.4 percent), providing only $10 million for 2005. CAP funds grants to coordinate health care services to the under-insured and uninsured offered by community providers such as public hospitals, community health centers, and disproportionate share hospitals.
  
  
• Freezes Title X Family Planning — The budget for Title X family planning programs is frozen at the 2004 level of $278 million.
  
  
• Freezes Maternal and Child Health (MCH) Block Grant — The budget freezes funding for the Maternal and Child Health Block Grant at the 2004 level of $739 million.
  
  
• Freezes Healthy Start — The budget funds Healthy Start at $98 million, a freeze at the 2004 enacted level. Healthy Start supports programs in high-risk communities to reduce low birth weight, inadequate prenatal care, and other factors contributing to infant mortality.
  
  
• Freezes Children's Hospital Graduate Medical Education (GME) — The budget freezes pediatric GME at $303 million.

Cuts to Infrastructure, Energy, and Environment

• Budget Once Again Provides Minimal Support for our Nation's Highways — The President's budget provides 2005 federal-aid highway budget authority of $33.3 billion, a cut of nearly $300 million from the 2004 enacted level of $33.6 billion. There is zero growth in the 2005 obligation limitation over the 2004 enacted level. This follows proposed cuts by the President of $2.3 billion in 2004 and $8.6 billion in 2003. In addition, SAFETEA provides $6.1 billion below what is needed to maintain purchasing power during the 2005-2009 period.
  
  
• Budget Shows Lack of Commitment to Mass Transit Needs — The President's 2005 request for the Federal Transit Administration (FTA) is $7.3 billion, the same as the 2004 enacted level. SAFETEA funds transit at $1.6 billion below what is needed to maintain purchasing power from 2005-2009. It is also important to note that while SAFETEA guarantees $35.6 billion in transit funding, this is actually approximately $600 million less than the guaranteed amount for transit programs during TEA-21.
  
  
• Privatization of Amtrak and Another Funding Cut — The Administration continues to press for the privatization of Amtrak, believing that the current system is too inefficient to be a viable mode of transportation. For 2005, the budget provides $900 million in grant funding for Amtrak, subject to review by the Department of Transportation. This is $318 million below the 2004 level.
  
  
• Fourth Straight Year of Cuts to Environmental Programs — For 2005, the President's budget significantly cuts funding for programs that protect public health and the environment. The budget provides $28.0 billion in discretionary funding for these programs, which is $2.4 billion (7.9 percent) below the 2004 enacted level. More noteworthy is that while maintaining to support the environment, the Administration provides only $27.7 billion in discretionary funding for 2006. This would be the first time since 1981 that environmental programs would be cut in two consecutive years. Over five years (2005-2009), the Administration funds discretionary environmental programs at $23.9 billion (14.7 percent) below the level required to maintain purchasing power at the 2004 level.
  
  
• Drastic Cut in Aid for Wastewater Infrastructure — For 2005, the President's budget dramatically cuts the Clean Water State Revolving Funds (SRF), which provides seed money to SRFs. These SRFs in turn loan money for improvements to wastewater treatment facilities. As in the prior year's budget, the 2005 budget provides only $850 million, nearly $500 million (36.7 percent) less than the 2004 enacted level.
  
  
• Conservation Spending Category Shortfall — The conservation spending category, established in 2001 to provide dedicated funding for programs addressing the loss of open space, wildlife habitat, and cultural treasures, is authorized at $2.2 billion for 2005. The Administration's budget only provides $1.7 billion, which is $500 million below the authorized level.

Programs Eliminated

The budget eliminates a total of 65 programs throughout the government. A complete list of these programs is attached as an appendix.

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