July 1, 2004
2005 Budget Shortchanges Blacks
A report released by Democratic leaders of the U.S. House of Representatives says that the federal budget plan for fiscal year 2005 slashes spending for a broad range of programs benefiting African Americans. The report, titled The Bush Budget Shortchanges African Americans, was authored by House Democratic leader Nancy Pelosi (D-Calif.) and the Congressional Black Caucus (CBC). It criticizes the Bush administration for draining federal coffers to pay for $1 trillion in tax cuts that mainly benefit the wealthy.
“In the face of historic unemployment, President Bush seeks to cut, if not completely eliminate, critical education, healthcare, housing, and small business development programs that help families and employers survive during difficult economic times,” says CBC Chair Elijah E. Cummings (D-Md.).
One of the prominent issues addressed by the report is unemployment. Since Bush took office, nearly 2.9 million Americans have lost their jobs. That number includes more than 1 million black Americans. An estimated 760,000 jobless workers have exhausted their regular unemployment benefits, and the budget proposal fails to extend long-term unemployment insurance.
Hard hit was the manufacturing sector, where 543,000 African Americans have lost their jobs. The Bush budget cuts two-thirds of the funding for the Manufacturing Extension Partnership (MEP), which provides small U.S. manufacturers with assistance ranging from plant modernization to employee training. Laid off workers will find it harder to retain or acquire new skills as the budget cuts $316 million from vocational education and community colleges and fails to increase spending for job training and employment programs. “One of the consequences of the massive increase in military spending is that it precludes spending for social programs that assist African Americans such as job training,” says Margaret Simms, senior vice president for programs at the Joint Center for Political and Economic Studies and member of the BLACK ENTERPRISE Board of Economists.
Bush’s budget cuts small business development programs as well. It shortchanges the Office of Contracting—8(a) Program, which is the primary vehicle through which minority-owned businesses enter the lucrative marketplace of federal contracts. Furthermore, it provides no resources for The Microloan Program, which mainly focuses on small business startups. And three programs that provide small business investment, technical assistance, and mentoring were also not funded.
The report directs some of its harshest criticism at Bush for underfunding his own initiative for public schools, No Child Left Behind, by $9.4 billion. The budget cuts money for after-school services in half. It provides no funding for dropout prevention and cuts $234 million from teacher training. “Even though 69% of African American undergraduate students receive some form of financial aid, the president freezes the maximum Pell Grant award in the face of skyrocketing tuitions and cuts funding for low-interest loans for low-income students by nearly $100 million,” says Pelosi.
Bush also applies the budget ax to affordable housing and healthcare programs. The congressional report says that the budget jeopardizes the social compact with the elderly by borrowing from the Social Security Trust Fund to pay tax cuts for the wealthy over the next 10 years,