WHAT DO BLOCK GRANTS AND TAX CUTS HAVE IN COMMON?

The Bush Budget for FY 2004 proposes major funding changes, including block grants, for a number of low-income programs like Medicaid and the State Child Health Insurance Program (SCHIP), Section 8 Housing Vouchers, Unemployment Insurance, Head Start, Child Welfare and Job Training. The House has begun considering block granting Head Start and Job Training programs. This means that states would get a block of money, sometimes guaranteed for a fixed number of years, to administer programs with less federal oversight. Low-income families and children will lose any entitlement to a minimum federally set safety net that expands when more people are in need. While the safety net is slowing being eroded, block grants would speed up the process. Also, under TANF reauthorization, we expect the "superwaiver" to be revived again – this provision basically unties federal regulations, allowing state governors to waive federal rules in programs including food stamps, public housing, homelessness programs, childcare, job training and adult education.

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END OF THE FISCAL YEAR: HOW ARE STATES DOING?

The National Governors Association and National Association of State Budget Officers published a sobering report from their latest fiscal survey. The new is very bad indeed. The report finds:

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APPROPRIATIONS UPDATE: Let the Cuts Begin

Despite a delay in dividing up the overall discretionary spending amount (as determined in the Congressional budget resolution) among the thirteen spending categories (the 302[b] allocations), Congress is quickly moving forward with the FY 2004 appropriations bills. So far, the House Appropriations Committee has approved seven bills; the Senate Appropriations Committee has approved two. Congress intends to pass all the bills by the start of the August recess so they can be finalized before the new fiscal year starts in October. The bills cover appropriations for FY 2004, which runs from October 1, 2003 through September 31, 2004. Once each chamber passes all the bills, the House and Senate must work to reconcile their individual versions. Assuming that agreement can be reached, they are then sent to the President for his signature.

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Economy and Jobs Watch

This past week, the Federal Reserve Board (Fed) lowered a key interest rate, suggesting that the Fed is not confident about the quality of the “economic stimulus” in the recently passed tax cut package.

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Income Watch: The Rich are Getting Richer?and Getting Bigger Tax Breaks

Top 400 are doing well… The IRS has just released two reports on the status of the wealthiest Americans. The report on the incomes of the highest 400 income tax filers shows a dramatic rise in their income levels.

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Estate Tax Update For June 2003

On June 18th, the House of Representatives passed H.R. 8, the “Death Tax Repeal Permanency Act of 2003,” which would make permanent the repeal of the estate tax, currently scheduled to take place in 2010 (thus the proposed law would take effect only in 2011 and beyond). The bill passed the House by a vote of 264-163, primarily with Republican backing, and with 41 Democrats and four Republicans breaking rank with their colleagues. (Vote Results)

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Economy and Jobs Watch

Two recent economic reports show the depth of economic mismanagement by the Bush administration. First, it was reported last week that the unemployment rate has risen to 6.1 percent in yet another indication of the poor state of the labor market. Second, the Congressional Budget Office (CBO) announced that it expects the current year’s budget deficit will be around $400 billion.

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The House Takes Up Permanent Repeal of the Estate Tax

After hijacking the child tax credit with add-ons that inflated the cost to $82 billion, House GOP leaders continue this month in their headlong rush to drain resources from government by cutting taxes for corporations and the wealthy. The campaign has just moved from the outrageous to the egregious.

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Child Tax Credit: The Poor as Political Theatre

The story is confusing. How did it end up that some Democrats voted against the House bill extending the refundable child tax credits to the 6.5 million low-income families who got left out of the latest tax break for the wealthy?

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Federal Budget Resources

The Federal Budget is a core issue area of OMB Watch. We follow federal budget and economic policy issues ranging from tax issues to government performance and beyond.

Our core issues include:

The Social Investment Initiative (SII): a two-year effort arising out of Invest in America to build a network of state and local organizations around long-term federal budget priorities; as well as other related projects.

Americans for a Fair Estate Tax (AFET): OMB Watch is very involved in the AFET coalition's efforts to fight against repeal and for a fair reform of the estate tax.

Fair Taxes for All (FTFA): a growing coalition of more than 300 national, state and local organizations, including OMB Watch, who are united in opposition to massive, irresponsible tax cuts.

Additional sub-issues include: Social Investment Initiative Budget Surpluses, Deficits and the National Debt Annual Budget Process & Appropriations Federal Tax Policy State Budget Policy Social Security Invest in America Government Performance Economic Policy Category Map

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