President's Proposed Budget Cuts Would Hurt Oregonians and Shift Costs to State

News Release
February 21, 2008 Download PDF
President Bush’s proposed 2009 budget would cut over $200 million in federal funding for a slew of social programs in Oregon, shifting costs to the state at time when a weakening economy has shrunk state revenues, according to the Oregon Center for Public Policy. The proposed budget would slash about $20 billion in spending nationally on domestic “discretionary” programs — those that must be approved each year — outside of homeland security, while making permanent all of the 2001 and 2003 Bush tax cuts.
Download a copy of this news release: Download this news release President's Proposed Budget Cuts Would Hurt Oregonians and Shift Costs to State (PDF).
Related Materials: Center on Budget & Policy Priorities report, "Bush Budget Would Cut Domestic Discretionary Programs By $20 Billion in 2009" includes state-by-state tables of proposed funding levels and funding trends.
The budget cuts would come on top of proposed administrative changes to Medicaid that over the next five years would erode funding for health coverage nationally by $17 billion. OCPP policy analyst Janet Bauer said reduced federal funding for Medicaid would shift more health care costs to Oregon. “The President’s budget continues to steer Oregon and the nation in the wrong direction,” said Bauer. “Instead of investing in families and their future, we get tax cuts favoring the wealthy. Oregon’s congressional delegation must rise to the challenge and help right this ship.” Under the President’s plan, Oregon would lose about $23 million for adult education and worker training programs, according to Bauer. “At time when a slowing economy may cost some Oregonians their jobs,” she said, “worker training programs must be strengthened, not weakened.” Bauer said that the proposed list of cuts is long and would include a $4.8 million reduction in aid for low-income Oregonians’ heating bills, $1.7 million less for clean water projects, $1.7 million less for law enforcement and $7.1 million less for community development. She added that cuts in prior years have already undermined these programs. Child care grants for low-wage workers in Oregon would also be cut by almost a half-million dollars, said Bauer, noting that it would be the eighth straight year of cuts to this program. The President’s budget would continue to neglect a number of other critical programs by freezing funding levels, according to Bauer. She pointed to the case of education funding. Since 2004, federal funding for K-12 education has remained frozen. Therefore, in inflation-adjusted dollars Oregon would receive $35 million less for K-12 education under the proposed 2009 budget than it did in 2004. Similarly, in today’s dollars, federal funding for Oregon’s Head Start program would be $8 million below the 2002 level under the proposed budget. Despite the frozen funding, the state must still meet its obligations for federally-mandated education programs such as No Child Left Behind, said Bauer. “Congress must reject this pattern of disinvestment in education, so that all children have a chance to succeed,” Bauer said. The prospect of reduced federal funding could not come at a worst time for Oregon. Two weeks ago, state economists forecast an ending balance of just $29 million, down from $207 million projected in December. The ending balance represents just 0.2 percent of state appropriations. “As it stands, Oregon has no room to maneuver,” said Bauer. “The President’s budget adds to the gloomy economic news and may force the state into an agonizing process of slashing crucial public services.” A full analysis of the cuts contained in the President's proposed budget can be found in a report released yesterday by the Washington, D.C.-based Center on Budget and Policy Priorities. The Oregon Center for Public Policy is a non-partisan research institute that does in-depth research and analysis on budget, tax, and economic issues. The Center’s goal is to improve decision making and generate more opportunities for all Oregonians.