Debt Deal Collapse Averts Cutbacks

Could Automatic Cuts Cripple Domestic Social Programs?

By Nathan Guttman

Published December 02, 2011, issue of December 09, 2011.
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The Jewish community reacted with a mix of disappointment and relief when the much-hyped congressional supercommittee announced that it couldn’t reach a deal on debt reduction.

On the one hand, Jewish organizations hoped for a bipartisan plan that would address the nation’s growing debt. But on the other hand, some groups worried that the budget-cutting ideas discussed by the supercommittee could spell big trouble for the community’s social services agenda.

A so-called “grand bargain” to settle the deficit problem would have likely included the biggest cuts ever to social safety net programs and entitlements, all of which top the Jewish community’s concerns on the domestic front.

“No deal is better than a bad deal,” the National Council of Jewish Women said in a statement after the November 21 announcement that the committee’s efforts had collapsed. “It is not that we were jumping up and down celebrating,” explained Sammie Moshenberg, NCJW’s Washington operations director. “But we were really nervous that the supercommittee will cut from human needs programs critically important for low-income families.”

A similar sentiment was expressed by other Jewish groups involved in advocating for social services. The specter of a debt reduction plan that would have cut heavily into Medicare, Medicaid and Social Security had many Jewish activists worried.

The Jewish community, through its federation system, depends heavily on Medicare and Medicaid to fund Jewish nursing homes and would be required to find alternative funding sources if these programs are cut. In practice, cuts to entitlements would force federations to shift funding for educational and communal programs to cover health care costs for the elderly.

Relief over tabling of plans to cut entitlement programs, however, was short-lived.

The deadlock reached by the supercommittee now requires Congress to come up with the needed $1.2 trillion in debt reduction by implementing across-the-board cuts, with only a few programs exempt.

“It is a Catch-22 for us,” said Rachel Goldberg, director of aging policy at B’nai B’rith International. “We knew from the beginning that a deal [in the supercommittee] would be unappealing to everyone, but the automatic cuts are extremely unappealing, too.”

For B’nai B’rith, across-the-board cuts would mean another major cut to one of its key programs that provides housing for low-income seniors. The program, known as Section 202 Housing, is already underfunded, and with further cuts, Goldberg said, “it is hard to see how it will survive.”

Other programs that are dear to the Jewish community and would suffer from the automatic cuts include food stamps, energy assistance for the elderly and housing programs. Several Jewish groups are now focusing their effort on lobbying for the extension of unemployment benefits, scheduled to expire at the end of this year.

“We are gravely concerned about the consequences of automatic budget cuts that will slash government spending, particularly as it relates to programs that provide needed care to vulnerable populations,” said William Daroff, vice president for public policy of the Jewish Federations of North America. He vowed to mount a major campaign to block the automatic cuts from taking effect.

While groups agree about the need to avoid cuts to social services, there is no consensus on how to reach this goal.

Jewish organizations on the liberal end of the spectrum, like the Religious Action Center of Reform Judaism, alongside groups like B’nai B’rith and NCJW, stressed the need for a deal that would include cautious budget cuts with an increase in tax revenue.

“We’re not going to be able to cut our way out of this problem,” said Mark Olshan, B’nai B’rith’s associate executive vice president.

But federations, through their national umbrella organization, JFNA, chose to steer clear of the tax issue, which is viewed as politically explosive, since Republicans strongly oppose any tax hike. The federations lobbied forcefully against proposed changes that would limit tax exemption for charitable giving, but pointedly refused to take a position on increasing the tax burden as a deficit reduction measure.

Contact Nathan Guttman at guttman@forward.com


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