August 8, 2012. Today the Center on Budget and Policy Priorities released a new report showing that a “Cuts Only” approach to reducing the federal deficit would drastically cut federal investments in education, roads and bridges, and disaster relief. Cuts of this magnitude would do great damage to the economy. FPI’s press release (below) highlights the fact that the House-passed “Ryan Budget,” a prime example of the “Cuts Only” approach, would cost New York state and local governments $2.7 billion in 2014 alone and $21.2 billion from 2013 through 2021.

Contact: Frank Mauro, 518-469-6680 (cell)
New report including New York impact:

Albany, NY – Any effort to significantly reduce the federal deficit without new revenue would almost certainly do great damage to both New York State’s current economic recovery and its future economic growth according to an analysis released today by the Center on Budget and Policy Priorities (CBPP), a non-partisan policy research organization based in Washington, D.C.

The President and Congressional leaders generally agree that to keep the national debt from growing faster than the economy, the federal deficit must be reduced by at least $3 trillion over the next 10 years, in addition to the roughly $1 trillion in savings required by last summer’s Budget Control Act (BCA). The CBPP analysis shows that any plan to cut the federal deficit this drastically without significant new revenues would require deep cuts in federal aid to states and localities for basic public functions such as educating children, building and maintaining roads and bridges, protecting public health, and providing law enforcement.

According to the new CBPP report, the plan proposed by House Budget Committee Chairman Paul Ryan (R – Wisconsin) and passed by the U.S. House of Representatives on March 29, 2012, is a real life example of such a “cuts only” approach. Under Ryan’s plan, New York State would lose an estimated 22% or $2.732 billion in federal funding for education, clean water, law enforcement, and other state and local services in 2014 alone, according to the new CBPP report. Ryan’s plan also would shift other very large costs to New York and the other 49 states by reducing sharply federal funding for Medicaid (in addition to repealing the health reform law), and likely by making deep cuts in funding for highway construction and other transportation projects.

“Deficit reduction shouldn’t come at the expense of America’s economic future and it does not need to,” said Frank Mauro, director of the Fiscal Policy Institute. “If Congress doesn’t take a balanced approach that includes revenue increases, the spending reductions required would be of a magnitude that would do significant damage to our ability to educate our children, build roads and bridges, and have clean water and safe communities – all key elements of a strong future economy.”

Ryan Budget Would Cut Federal Funding for New York and the Other States Far More Than “Sequestration”

The new CBPP report also documented that the funding cuts to states, counties, and cities under the Ryan budget proposal would far exceed the automatic cuts scheduled to begin in January pursuant to last summer’s Budget Control Act (BCA), often referred to by the term sequestration. In 2014, the Ryan budget cuts would be three times as deep, inflicting far more damage than sequestration. In later years, as the sequestration cuts diminish but the Ryan cuts remain as deep, the difference would be even larger.

Specifically, the Ryan budget proposal likely would reduce federal funding in these areas:

  • Education. Head Start, teacher quality programs, special education, and schools in high-poverty areas likely would face deep cuts.
  • Transportation. Likely cuts would hurt New York’s ability to build and repair roads, bridges, airports, and public transportation systems.
  • Public safety. New York would likely have less funding for disaster assistance and grants programs that help local police departments hire, train, and equip officers.
  • Community development. Funds that help improve water and sewer systems and revitalize deteriorating neighborhoods likely would face cuts.
  • Housing. There likely would be less funding for the already under-funded rental assistance program and less funding for heating and cooling assistance for low-income people, many of them elderly.
  • Workforce. New York would have fewer resources for workforce training and placement services and childcare assistance for low-income working parents.
  • Health. Funding cuts would hinder New York’s ability to keep community health centers open, provide mental health and substance abuse services, and give nutrition support to low-income mothers and young children.