United States Senator Daniel K. Akaka (D-Hawaii) criticized the Republican tax proposal as a fiscally irresponsible risk that could force deep spending cuts in national defense, education, veterans' health, environmental protection, and crime-fighting initiatives that benefit all Americans. Senator Akaka voted against final passage of S. 1429, the 1999 Budget Reconciliation Bill.
"This legislation does nothing to protect the solvency of Social Security and Medicare, and would result in drastic cuts in government spending," Akaka noted. "This proposal would jeopardize all the work we have done to turn America's budget deficit into a surplus. A return to 'rosy scenario' forecasting and tax cuts that aren't paid for could actually harm the economy and boost inflation."
In a floor statement, Senator Akaka also cautioned House leaders against using $6 billion in unspent welfare and health care funds, intended for low income children and their families, as a gimmick to overcome low budget caps for fiscal year 2000 and fund $792 billion in tax cuts. The July 28, 1999, New York Times reported that House Republicans may attempt to rescind $6 billion in unobligated Temporary Assistance for Needy Families, or TANF, and unobligated Medicaid and Children's Health Insurance Plan (CHIP) funds.
"This is a classic situation of Robin Hood in reverse: robbing the poor to give more to the rich," Akaka said. "In 1996, states traded entitlement status for a fixed, annual amount in the form of a block grant. Those of us who opposed the welfare bill warned that it would be much easier to cut welfare funds if they were block grants. Now, our fears are being realized. Cutting funds in this manner betrays our promise to protect America's poor families."
According to the U.S. Department of Health and Human Services, a combined total of $4.2 billion in TANF funds from fiscal years 1997, 1998 and 1999 is available. The decline in welfare rolls, low unemployment, and the robust national economy are frequently cited as reasons why this money has not been spent by states and remains unobligated. Many states are relying on these unobligated funds and have already committed them for a wide variety of uses. States need to distribute some of this funding to counties and local agencies, or to child care and social services activities. Governors are keeping "rainy day" funds for contingencies such as recessions or periods of stagnant growth that force families back onto welfare and leave states without enough money until the next quarterly federal payment. States are also planning to use this money for fundamental or new, innovative expenses to help poor families become financially independent.
"Congress should provide responsible tax cuts for the American people," Akaka remarked. However, tax relief must be fiscally sound and responsible. It should not come at the expense of Social Security, Medicare, and other critical initiatives and services–particularly those that aid our children and our most vulnerable citizens."
