The Bush Administration released its budget request for fiscal year (FY) 2007 on February 6 th. The $2.77 trillion proposal asks Congress to cut and make disturbing program changes to a number of programs vital to low-income families and individuals, including heath care, housing, job training and nutrition. The budget plan does contain some encouraging aspects, particularly in funding possibilities for faith-based organizations.

Below you will find details of the President’s budget request by program area.

The President’s fiscal year 2007 budget proposal would reduce overall spending and make several significant policy changes to key welfare and health programs:

Health: The proposal cuts Medicare funding by $2.5 billion in 2007 and $35.9 billion through 2011. These cuts are achieved by reducing payment to hospitals, skilled nursing homes and other health care facilities. It would also increase the cost for certain middle- income seniors to utilize Medicare benefits. The budget request also continued the trend of the Deficit Reduction Act of 2005 (recently passed by Congress) that expands waiver opportunities; restricts spending to Medicaid; and allows states to increase co-payments, impose premiums, and narrow the health services to Medicaid beneficiaries. The budget contains new legislative proposals for Medicaid and the State Children’s Health Insurance Program (SCHIP), which are estimated to reduce federal funding by $13.5 billion over five years. Many of these changes would shift more federal Medicaid cost to states, which could result in some states cutting back on health benefits for low-income families.

TANF: The Temporary Assistance for Needy Families (TANF) proposal maintains current funding at $16.5 billion for TANF for the next five years. The proposal extends supplemental grants tot states through FY 2010. The proposal also adds an additional $100 million for “Family Formation and Healthy Marriage State Grants.” These grants require a dollar for dollar match, but states can use federal TANF funds for matching. The grants are in addition to the $150 million in Marriage and Fatherhoods grants in the Deficit Reduction Act of 2005. The budget proposal also adds $232 million to the TANF Contingency Fund for a total of $2 billion. The budget maintains the Child Care and Development Fund at fiscal year 2006 by requesting $2.9 billion in mandatory funds.

Child Welfare: The budget cuts funding to the Social Services Block Grant (SSBG) by $500 million to $1.2 billion. SSBG provides critical child welfare services to millions of low-income Americans. Approximately 1.4 million children received child protective services funded with SSBG. The budget continues the administration’s previous Foster Care proposal that would provide states with the option to receive a fixed, predetermined allocation (block grant) of Title IV-E foster care maintenance payments, administrative costs, and training funds. States choosing the option would have to maintain the same level of state funds now used to draw down federal Title IV-E foster care funds.

Child Support: The proposal incorporates changes made in the Deficit Reduction Act of 2005. It also includes a list of additional proposals that requires health care plan administrator to notify the Child Support agencies when a child loses health coverage; increases funding for access to visitation grants; and gives states new avenues to collect past-due child support.

Low-Income Home Energy Assistance Program (LIHEAP): The budget request includes a total of $2.7 billion in LIHEAP funding, an increase of $621 million over FY 2006 funding. The Deficit Reduction Act of 2005 included $1 billion in new mandatory LIHEAP funding for FY 2007. However, the budget proposal would offset part of this new funding by reducing discretionary LIHEAP funding by $379 million, from the FU 2006 level. Of the FY 2007 funding of $2.7 billion, $2 billion is for formula grants to states and $750 million is contingency funding.

Workforce Investment Act (WIA): The administration’s budget request for employment and training programs reflects many of the proposals from previous budget requests. The budget request reemphasizes the administration’ plan to consolidate WIA. It combines funding for adult, youth dislocated workers, employment services, work opportunity tax credit, and labor market information into a single funding source under the new Career Advancement Accounts (CAAs) proposal. The CAAs would be funded at $3.413 billion, roughly $600 million less than last year’s unconsolidated funds. The budget includes additional changes to youth programs by transferring the Youthbuild program from the Department Housing and Urban Development to the Department of Labor. The budget also eliminated $76 million in funding to the Migrant and Seasonal Farmworker Program.

Support to Faith Community: The budget offers several proposals to enhance efforts in the faith-based community to support low-income families including $98 million for state Access to Recovery Grants, which may include supportive services in faith based institutions; $204 million for abstinence-only education programs; $100 million for Cover the Kids, a new initiative to enhance outreach efforts in states and community agencies to enroll children in health coverage; and $50 million within the Compassion Capital Fund for faith-based and community organizations with a demonstrated history or providing services to youth and families in disadvantaged situations.

Food Programs: The administration is proposal legislation that would restrict those on TANF from being “categorically eligible” for food stamps. The Administration’s budget proposal would no longer allow states to consider recipients of TANF programs and services to be “categorically eligible” unless they also receive cash assistance. Under current law, households in which members receive any TANF service, including non-cash assistance, can be categorically eligible. According to the Food research and Action Center, this would affect household in about 40 states and cause approximately 300,000 people in low-income working families to lose benefits as well as cost 40,000 children access to free school meals. Among the states hardest hit would be Delaware, Miane, Maryland, Massachusetts, Michigan, North Dakota, Oregon, South Carolina, Texas, Washington, and Wisconsin. The budget proposal would, however, allow individuals and families that have retirement savings to obtain food stamp benefits. This would allow about 100,000 more people to qualify for the Food Stamp Program.

In addition, the budget proposal would eliminate funding for the Commodity Supplemental Food Program, a program that provides packaged food to low-income children and seniors 60 and older as well as eliminate funding for the Community food and Nutrition Program (CFNP) that provides funding to state, public and community-based organizations to help needy families obtain nutrition benefits.

Juvenile Justice Programs: The President’s FY 2007 budget again proposes drastically reduced overall funding for Juvenile Justice and Delinquency Prevention programs by more than 40 percent, from $308 million in FY 2006 to $176 million in FY 2007.

Unfortunately, the budget proposal would again eliminate funding for the Juvenile Accountability Block Grant. The JABG provides states and local governments with flexible funding for communities to use a wide array of sanctions and services to turn juvenile offenders away from future crime. In addition, the proposal would reduce funding for Title V Local Delinquency Prevention by nearly 50 percent from $64.4 million in FY 2006 to $32 million in FY 2007. The proposal also includes $33.5 million to fund a new delinquency prevention block grant (this was included in previous funding requests, but has yet to receive funding from Congress). The new delinquency prevention block grant is a consolidation of discretionary grants, youth gangs, state challenge, and juvenile mentoring programs.

Senior Programs: The President’s budget proposal would reduce funding from $437 million to $388 million for Community Service Employment for Older Americans Senior Community Services Employment Program and calls for streamlining the program.

The proposal also includes slight reductions in funding to senior supportive services and centers, and nutrition programs like congregate meals and home delivered meals. The budget proposal would fund Supportive Services and Centers at $351 million (a $3 million decrease from FY 2006); Congregate Meals at $384 million (a $5 million decrease); Home Delivered Meals at $181 million (a $3 million decrease); and Nutrition Services Incentive Program at $147 million (a $2 million decrease). The proposal would also completely eliminate funding for preventive health services for seniors.

Housing: The President’s proposed budget for housing and community development includes some increases for vital programs and places a great deal of trust in faith-based initiatives to serve the housing needs of America’s most vulnerable citizens. However, this budget offers an insufficient government investment in affordable housing and neighborhood redevelopment. This will serve to undermine the extensive efforts of Catholic Charities to respond to the growing housing crisis being experienced by the most vulnerable in communities across the country.

Overall, the HUD budget is cut by $622 million or 1.8 percent - a reduction achieved largely by indefensible cuts to affordable housing for the elderly and people struggling with disabilities, and to the two major components of neighborhood redevelopment, the HOPE VI Program and the Community Development Block Grant. It is important to note that the President’s proposal overlooks the substantial need for new funding to provide for the substantial and ongoing affordable housing needs of evacuees of the Gulf Region.

Faith-Based Initiatives (Housing): The President continues to show a great deal of support for faith-based agencies including a $25 million dollar faith-based Prisoner Re-entry Initiative under the HUD Homeless Assistance Grants which is to be transferred to the Department of Labor. These funds will support training, job-placement and re-housing programs for people who must re-engage with society after leaving prison. The Administration continues to award high marks in terms of management to the HUD Center of Faith-Based and Community Initiatives.

Housing and Services for Victims of HIV/AIDS: One of HUD’s more successful programs is The Housing for Opportunities for People with AIDS Program or HOPWA. HOPWA provides safe, decent, affordable housing and supportive services to families and individuals suffering with HIV/AIDS. The President has recommended a $14 million increase for HOPWA.

Section 8 Housing Choice Voucher Program and Public Housing: The President’s budget requests $15.9 billion for the Section 8 Housing Choice Voucher Program in fiscal year 2007, an increase of %502 million, or 3.3 percent. While this does seem to be enough money to renew existing vouchers, Catholic Charities agencies that work closely with local public housing authorities will identify that recent changes in HUD voucher funding formulas has resulted in many housing authorities having to cut back on voucher issuances. Last year, this new funding method resulted in over 10,000 fewer families for new Section 8 vouchers and it places a large minority of housing authorities in danger of again having to displace large numbers of families.

Thankfully, the President continues to urge HUD to provide vouchers to the Family Unification Program, which provides Section 8 vouchers for families and youth in child welfare system under HUD’s tenant protection fund.

Housing Counseling Program: HUD holds as central to its mission, increasing homeownership, particularly among low income and minority renters. This mission is supported through the Housing Counseling Program- an important service provided by many Catholic Charities agencies around the country. The President proposes a $3 million increase to the HUD Housing Counseling Program ($42 million to $45 million).

Special Needs Housing: HUD’s Section 202 Housing for the Elderly Program which houses and supports the services needs of tens of thousands of low income seniors is cut by over a quarter- from $735 million to $545 million. The President takes aim at the Section 811 Program, which provides housing to thousands of disabled Americans proposing that it be cut by almost half from $237 million to $119 million.

Community Development: Two programs that are vital to the redevelopment of America’s most distressed and disenfranchised neighborhoods are severely impacted by this budget proposal. The President recommends that the HOPE VI Program be eliminated and that the Community Development Block Grant Program be consolidated along with several other community development initiatives and then reduced to $3 billion- a cut of almost one quarter. Unfortunately, these are two programs that could be extremely useful in rebuilding the Gulf Coast region, particularly affordable housing for returning evacuees.

Homeless Assistance Programs: The President acknowledges a record level of homelessness by proposing a record level of funding ($1.53 billion) to house and serve homeless persons and families representing an increase of almost 14 percent ($184 million). Unfortunately, the Administration continues to rely too heavily upon the Homeless Assistance Grant funding as a production program for new affordable housing for single, disabled adults, and as a result, communities will continue to struggle to provide and perhaps end emergency housing and services for thousands of children and their families.

The Budget Process: The President’s request is merely the first step in the annual budget and appropriations process. The Bush plan now does to the House and Senate budget committees, which set spending parameters, while appropriations committees in both chambers decide spending levels for each discretionary program within those parameters.

For more information on the budget process, please visit

http://www.catholiccharitiesusa.org.