Senate Democrats

Budget Report: The President’s FY 2008 Request Fails to Address the Needs of Latinos

President Bush’s budget for Fiscal Year 2008 would once again severely cut programs that directly affect the quality of life of Latinos.  The following report assesses the President’s spending plan compared to the levels provided in H.J.Res.20, the Funding Resolution for Fiscal Year 2007, recently passed in the House of Representatives and the Senate. The President’s cuts in funding for education, health care, labor, housing, and economic assistance programs will have a negative impact on Hispanic families across the nation.  Democrats believe these cuts reflect misplaced priorities that are wrong not just for Latinos, but for all Americans. Democrats are committed to taking the country in a new direction. 

Health Care and Nutrition

Health care costs have skyrocketed since President Bush took office, including health insurance premiums.  In 2005, 46.6 million people in the United States, or 15.9 percent, were without health insurance coverage.  Hispanics experienced the worse rates of uninsurance of any racial or ethnic group, at 14.1 million, or 32.7 percent.  That means that one out of every three Latinos does not have health insurance.  Even in the face of this crisis, President Bush proposed cuts to vital health care programs that benefit low-income Latino families, including children and seniors. 

The Bush budget jeopardizes Latino children by undermining the State Children’s Health Insurance Program (SCHIP).  The budget proposes adding only one-third of the funding necessary to maintain current coverage levels in the program, putting millions of low-income children and others at risk of losing their health insurance. Moreover, the President’s plan would leave millions of low-income children who are eligible for the program without coverage.

The President proposes nearly $300 billion in cuts over ten years to Medicare and Medicaid.  These cuts will further exacerbate the Latino uninsurance crisis because millions of Latino seniors and families depend upon these programs for their health care.

·        Medicare. Approximately 43 million senior citizens and people with disabilities depend on Medicare.  The President proposes $76 billion in legislative and regulatory cuts over five years, and $252 billion in legislative cuts over 10 years. 

·        The budget proposes to increase the number of Medicare beneficiaries subject to higher premiums in Parts B and D.  By preventing the income threshold for the higher premiums from increasing to reflect inflation, more middle class beneficiaries in the Latino community will be affected by the higher premium, and one of the greatest strengths of the Medicare program – its universality – will erode. 

·        Moreover, the President’s budget favors privately managed plans over traditional Medicare providers.  The budget proposes to reduce payment updates to hospitals and other health care providers participating in the traditional fee-for-service Medicare program but maintains overpayments to HMOs and other managed care plans even though MedPAC, an independent advisory panel, has recommended their elimination.

·        Medicaid.  More than 50 million low-income people – approximately one out of six Americans – depend on Medicaid for their health care.  39.3 percent of Hispanic children are covered by Medicaid.  Just last year, the Republican-controlled Congress enacted $6.9 billion in Medicaid cuts over five years.  Yet, the President is now proposing additional cuts.  The budget, through legislative proposals and regulatory changes, proposes $25 billion in Medicaid cuts over five years.

The President also proposes funding reductions for substance abuse and mental health programs.  The President proposes cutting $221 million from the Substance Abuse and Mental Health Services Administration (SAMHSA), which supports mental health programs and alcohol and other drug abuse prevention and treatment services throughout the country.

The Bush budget for food and nutrition programs would limit availability and access to federal nutrition programs for low-income Latinos.  The budget proposes eliminating categorical eligibility for food stamp recipients who receive TANF-funded work support services.  Approximately 329,000 individuals would be affected by 2009 and nearly $1.4 billion would be cut from federal nutrition programs.  The budget also proposes the elimination of the Commodity Supplemental Food Program for low-income children and senior citizens, which would eliminate modest monthly food packages for almost half a million individuals.  In addition, the budget proposes funding cuts for the Women Infants and Children (WIC) program’s nutrition and education services for low-income mothers and children.

The budget once again proposes cuts to health promotion programs.  Nearly 65 percent of adults and roughly 16 percent of children in the United States are obese or overweight.  Among those of Mexican origin, nearly 74 percent are considered overweight and almost 35 percent are obese.  Adult Hispanics of Mexican origin are two times as likely as non-Hispanic white adults to be diagnosed with diabetes and Hispanics, overall, are 1.6 times as likely as non-Hispanic whites to die from diabetes.  While investing in preventive health programs is both common sense and good medicine, the President proposes to cut overall funding for the Centers for Disease Control and Prevention (CDC) and again proposes eliminating the Preventive Health Bock Grants.  The President’s budget would also eliminate the Universal Newborn Screening program, even though the infant mortality rate among Hispanics of Puerto Rican origin is 41 percent higher than non-Hispanic whites.

The Bush Administration’s budget proposal also cuts funding to veteran health care programs.  America has a special obligation to support and honor the 24.5 million veterans – 1.1 million of whom are Hispanic — who have risked their lives to defend our nation and its interests.  The President’s budget, however, inadequately provides for their health care needs.  The budget nearly doubles the prescription drug co-payment for approximately two million middle income veterans who suffer from non-service related disabilities, and it continues a ban on new middle-income veterans enrolling for care, a policy that has caused as many as one million veterans to be turned away from VA hospitals and clinics.  Further, the budget provides only minimal funds for enhancements in specialized VA health care programs, including mental health/substance abuse treatment, rehabilitative care for critically wounded service members, and readjustment counseling.  The proposal also underestimates the needs of the new generation of veterans arriving home from Afghanistan and Iraq.  While the President’s request of $752 million for health care services for returning Iraq and Afghanistan war veterans represents an increase over current spending levels, it is projected that this allocation will fall short of real demand by 50,000 patients. 


While nearly one in five children in our public schools is Hispanic, the President’s budget proposal fails to adequately fund critical programs that provide educational opportunities for Latino students.  Modest increases in discretionary funding for some programs would be offset by cuts in funding for, or the elimination of, other vital education programs.  The President’s budget would cut Department of Education discretionary funding by $2.3 billion, or 3.9 percent.  Instead of adequately investing in education, the President is once again asking students, parents, and teachers to do more with less.

The Bush budget under-funds No Child Left Behind (NCLB) and Title I. Though the President trumpets NCLB as a way to close the academic achievement gaps impacting Latino students, his budget once again fails to provide adequate resources to fund the program, even as states and local school districts struggle to meet the program’s requirements.  While the budget increases NCLB funding by $738 million above baseline, for a total of $24.6 billion, which reflects a $968 million increase for state grants under Title I, these new funds are targeted toward new requirements for high schools.  The Bush budget does little to help schools meet the goals that have already been established.  Even worse, where the budget gives with one hand, it takes away with the other by proposing $397 million in budget cuts for K-12 education programs.

The President’s budget also inadequately funds Title III of NCLB, the Language Assistance State Grants.   English Language Learners (ELLs) currently make up over 10 percent of all students attending public schools.  Over the past fifteen years, the ELL student enrollment has nearly doubled, and it is predicted that one-quarter of the total U.S. public school population will be ELL by the year 2025.  The President’s budget, however, fails to appropriately fund English language development programs so that ELL students can achieve at the same academic levels as other children. 

The Bush budget request fails to make college more affordable for Latino students.  In spite of the dramatically rising costs of college, the President’s budget does not address growing concerns about the affordability of a college education.  The President’s budget only contains enough discretionary funds to maintain the current maximum Pell Grant of $4,050.  While the President proposes an increase in the maximum Pell Grants from $4,050 to $4,600 in Fiscal Year 2008 and to $5,400 by Fiscal Year 2012, he aims to pay for part of the increases with cuts and program eliminations that would hurt other students. The President proposes to eliminate the Perkins Loan, Federal Supplemental Educational Opportunity Grants, and Leveraging Education Assistance Partnerships programs, each of which also helps lower-income students afford a college education.

The President rejects bipartisan support for career and technical education.  Last year, Congress passed and the President signed a bill to reauthorize and strengthen career and technical education.  Despite overwhelming bipartisan support for these programs, the President’s Fiscal Year 2008 budget proposes a $696 million reduction in funding.  As a result, most states would see their funding reduced by almost half, and five million secondary students and three million post-secondary students participating in career and technical education programs, as well as more than two million students enrolled in Tech Prep programs, could see their courses reduced or eliminated.  Many of the impacted students would be Hispanic. 

The budget shortchanges after-school programs for Latino students.  21st Century Learning Centers provide enrichment and a safe and supervised environment for students after the school day ends.  The President proposes freezing this program at $981 million, which is $19 million less than is needed to provide the same level of services in 2008 as is provided in 2007.

The Bush budget provides inadequate funding for Head Start.  The Head Start program prepares many Latino low-income children to enter kindergarten ready to learn by providing child development, education, health, nutrition and other services.  The Bush budget would cut Head Start by $207 million, for a total of $6.79 billion.  The program currently only serves only about one-half of the children eligible for the pre-school program, and fewer than five percent of eligible Early Head Start children.  By failing to provide a cost-of-living adjustment, the President’s budget will result in cuts in hours, transportation, and educational instruction that will reduce the number of children receiving services and threaten the quality of the program.

The President would eliminate Even Start.  Almost half (46 percent) of all families that participate in Even Start are Hispanic.  Even Start is a family-focused program, which offers early childhood education, adult education, parenting education, and interactive literacy activities for parents and children. 

The budget proposes cuts to programs that promote safe and drug-free schools.  Safe and drug-free school programs have provided millions of children with a safe environment that allows them to learn.  Despite their success, the President proposes cuts of $253 million, or 72 percent, for safe and drug-free schools state grants.  The budget would leave only $100 million for these vital programs.

The Bush budget would terminate other key education programs in which Latino students participate.  The President proposes to eliminate 44 discretionary education programs, including Leveraging Education Assistance Partnership Grants (LEAP), education technology state grants, school counseling, mentoring, parent information and resource centers, physical education, school leadership, Tech Prep State grants, and the School Dropout Prevention Program.  The elimination of the dropout prevention program is particularly disturbing since the dropout rate for Hispanics is still more than twice the rate than for the overall population and roughly four times the dropout rate for Whites.

The President’s budget leaves migrant students behind.  Migrant students are among the most disadvantaged youth in the nation.  Current estimates place the dropout rate for migrant youth at between 50 and 60 percent.  Before the College Assistance Migrant Program (CAMP), few children of migrant farm workers attended college.  Both CAMP and the High School Equivalency Program (HEP) have been stunningly successful.  In 1998-1999, 73 percent of the HEP participants received a GED, and 88 percent of CAMP students completed their first year of college in good standing.  Despite the success and increasing need for these programs, the President freezes funding for both programs.  Because funding has not kept up with inflation, several states, including Florida, California and Texas have been forced to eliminate these programs.  If funding is not increased, there is little doubt that more programs will be cut.

Housing and Community Development

The request would reduce funding for programs that assist Latinos in need.  At a time when more and more Americans are being squeezed by high rent, high home heating costs, and high oil prices, the Bush budget proposes to cut funding for programs to assist lower income Americans with their housing needs.  For example, the President’s budget would significantly cut funding for the: Housing for the Elderly program, which supports the creation of housing facilities for lower income elderly Americans aged 62 years and above; the Housing for Persons with Disabilities program, which provides construction grants, operating subsidies, and housing vouchers for lower income Americans with disabilities; and the Project-based Rental Assistance program, including under-funding the Section 8 Tenant-based assistance program.

The budget would cut funding for Community Development Block Grants.  The Bush budget proposes to cut funding for the Community Development Block Grant (CDBG) program by $736 million below the H.J.Res.20 level.  The CDBG program provides eligible metropolitan areas with annual direct grants that can be used to revitalize neighborhoods, expand affordable housing and economic opportunities, and improve community facilities and services.

Employment and Training Programs

The Bush budget would cut funding for employment and job training programs that benefit hardworking Latinos.  These cuts could not come at a worse time for workers who are struggling to support their families in the face of layoffs, competitiveness, wage stagnation, and the increasing cost of living.  Nevertheless, the President is asking Congress to cut these programs by $1 billion, or 19 percent, which includes funding decreases for the adult employment and training activities grant program, dislocated worker employment and training activities grant program, youth activities program, Job Corps and the Community Service Employment Program for Older Americans.  In various ways, these programs help states and localities provide extensive job training and placement for workers and students and offer necessary services to employers.  The Bush budget also proposes eliminating funding for the Migrant and Seasonal Farmworker program, which helps workers acquire new skills to obtain better paying jobs.

The Bush budget would cut $27 million from fiscal year 2007 funding levels for the Employment Service State grants program, which helps unemployed workers find jobs.  Given that the national unemployment rate rose to 4.6 percent in January, and one in every five of these workers remains unemployed for more than six months, these grants are vitally important.  Latino workers deserve better.

The budget would also drastically cut funding for programs that help Hispanics with disabilities.  The budget eliminates funding for the Work Incentive Grant program, which makes grants to help operate one-stop career centers to assist job seekers with disabilities.  One-stop centers provide enhanced career development and labor market information services to many Latino workers and employers.  Further, the budget reduces funding by $10.3 million, or 35.6 percent, below baseline for the Office of Disability Employment Policy, which works to eliminate employment barriers to people with disabilities. 

Economic Development and Assistance

The budget eliminates key funding for Latino small businesses. The Bush budget once again proposes to eliminate funding for the microloan and microloan technical assistance programs, which were funded at $22 million and $13 million, respectively, for 2007.  These loans are essential to many Latino entrepreneurs.

The President would cut clean water programs.   Funding to improve water quality would be cut by $400 million, from $1.9 billion in the 2007 CR to $1.5 billion in Fiscal Year 2008.  The Clean Water Act state revolving fund, which provides important funding to states for wastewater treatment facilities and water quality enhancement projects, would be cut by $396 million, from $1.1 billion in the 2007 CR to $687.6 million in Fiscal Year 2008.  The fund’s budget has been cut by nearly half, $642 million, since 2001.  If enacted, hundreds of thousands of people in the United States, including many Latinos, would continue to have inadequate clean water service.

The Bush budget request would leave many low-income Latino families vulnerable to high home energy costs.  While home heating costs have increased by 59 percent since 2001, President Bush’s budget requests have failed to keep pace — this year is no different.  While the budget requests $1.78 billion for the Low Income Home Energy Assistance Program (LIHEAP), this is $420 million less than is needed to maintain LIHEAP funding at the H.J.Res.20 level, adjusted for inflation.