Program Cuts in Adminstrations Proposed FY'06 Budget

March 8, 2005

Some of the cuts proposed in the President’s FY 2006 Federal Budget.

  • Food Stamps are cut $1.1 billion over 10 years. An estimated 200,000 – 300,000 people will lose Food Stamps as a result of this cut.

  • WIC would be cut $658 million from FY 2006 - FY 2010 – if achieved by reducing the number participating, this would mean 660,000 fewer babies, young children, and pregnant women receiving WIC assistance.

  • Medicaid is cut $45 billion over 10 years. In the fifth year of these cuts, the funds lost to states would be enough to provide health coverage to 1.8 million children or 345,000 people over 65 nationwide.

  • By FY 2009, 300,000 fewer children will receive Child Care assistance than today. This is in addition to the loss of 200,000 child care placements that has occurred since 2003. Federal child care funding has stayed the same for the last three years, and would remain unchanged through FY 2010 in the President’s proposal. Each year, inflation shrinks the value of the child care funds.

  • The budget cuts the number of children served by Head Start by 25,000 in FY 2006 and by 118,000 by 2010. The budget calls for demonstrations in a number of states to transfer the authority to run Head Start away from local programs and to the state.

  • Elementary Education (No Child Left Behind) is under-funded by at least $12 billion in FY 2006. While these education funds rise 3 percent after inflation over the previous year, they fall short of the amount promised to school districts by the legislation. (The cumulative shortfall since the legislation passed is almost $40 billion.)

  • Special Education programs for children with disabilities would be cut 18 percent in 2010, taking inflation into account. Between FY 2006- FY 2010, the cuts would total nearly $7.6 billion.

  • The budget cuts $920 million from high school and vocational programs. The President’s budget highlights a $1.5 billion high school initiative, which includes $250 million for expanding No Child Left Behind-type testing to high school. The remaining $1.25 billion for high school programs is what is left after eliminating $2.17 billion in vocational and technical education, college-readiness and similar programs.

  • Literacy, basic education and English as a Second Language services would be cut by at least two-thirds in FY 2006. At least 470,000 people would lose access to these services.

  • Job Training and Employment Services is cut by nearly $281 million from various job training programs, a 4 percent cut from current funding. The budget eliminates programs for migrant and seasonal farm workers and youthful offenders.

  • Community and Economic Development is cut by nearly $2 billion. These programs provide housing, transportation, and other economic development assistance for low-income communities. The budget eliminates $5.7 billion in 18 such programs, replacing them with a new $3.7 billion block grant.

  • The budget cuts LIHEAP (Low Income Home Energy Assistance Program) by $182 million (down from nearly $2.2 billion in FY 2005). The Administration projects that 4.5 million low-income households will receive energy assistance in FY 2006.

  • The Administration again proposes a block grant for foster care, prevention, case management, and other child welfare services. A block grant would end the 40-year federal guarantee of financial support for foster placements for abused or neglected children. States opting for block-granted funding may receive an increase in the first year, but over 5 years overall funding is the same as under current law, meaning that states receiving more in the first year would receive less in future years, even if the number of abused or neglected children rises. Other child welfare programs are level-funded, despite the fact that about 370,000 abused or neglected children now receive no services. Providing them with home visiting services would cost about $1.1 billion a year over current funding levels.

  • The budget proposes to restrict federal outlays for Section 8 rental vouchers by ending the current practice of providing local housing authorities with the funds necessary to support a specified number of rental vouchers. Instead, the housing authorities would receive a pot of funds and would be allowed to adopt restrictive policies such as time limits or higher tenant payments if the funding were inadequate to cover rising rents. In 2010, 370,000 fewer families would receive rental vouchers than in 2005.
Coalition on Human Needs