Monday, April 4, 2011

From the desk of Al Franken

The Effects the Proposed Federal Budget Could Have on Minnesotans

SD 50 Chair Bill Krueger wrote to Sen. Al Franken regarding the federal budget and the fiscal priorities being set by the President and Congress.  Al responded to Bill, who asked that the response be posted to this blog.  Al's response is below.  At the end Al refers to H.F. 1, which can be found here:

Dear Bill,

Thank you for contacting me about the federal budget.  I appreciate hearing your thoughts on this matter of critical importance to our nation.

As you may know, our country faces a tremendous challenge in getting our fiscal house in order.  Our debt has grown for decades under Congresses and Presidents of both parties.  And while it's easy to agree that we should cut government spending, it's much harder to agree on what we should cut.  We can't just say, "Let's cut $500 billion" or make vague promises about "increasing efficiency."  Cutting spending means choosing programs we currently spend money on, and deciding to stop spending money on them.  These decisions have real impacts on Minnesotans.

The President's budget does a good job of keeping our priorities in order while getting our deficits under control.  It would freeze non-security domestic spending across the board for five years, which would result in $400 billion in savings over the next decade.  I also believe the President's budget makes the right decision by continuing to invest in education, innovation, and infrastructure-areas key to creating jobs and growing our economy.

That being said, I worry that a few of the specific cuts proposed by the President will hurt Minnesotans disproportionately, particularly cuts to the Low Income Home Energy Assistance Program (LIHEAP).  These cuts would mean that nearly 50,000 households in Minnesota could lose assistance and have to choose between food or heat next winter.  Anyone who's lived through a Minnesota winter knows that you simply can't go without heat.  As the budget process moves forward, I will fight to keep full funding for LIHEAP.

But while the President's budget generally hits the right mark, the spending legislation recently passed in the House, H.R. 1, puts our entire economy at risk.  H.R. 1 would slash vital programs in an indiscriminate and ideological way.  Mark Zandi, chief economist of Moody's Analytics and advisor to Senator John McCain's 2008 presidential campaign, has estimated that H.R. 1 would cause the loss of 700,000 jobs by the end of 2012 if it were enacted.  Jan Hatzius of Goldman Sachs estimates that 2 percent of our nation's GDP would be wiped out by H.R. 1. During a fragile recovery, we can't be making indiscriminate or ideologically-driven cuts that will cost us jobs when we need them most.

Most troubling of all, H.R. 1 would take a meat cleaver to programs that disproportionately affect Minnesotans. I've heard from tens of thousands of Minnesotans who say these cuts would have a direct impact on their families and their livelihoods.  H.R. 1 would slash funding for job training programs at a time when 3,000 Minnesotans are on a waiting list to get trained and find new employment.  $1.1 billion in funding for Head Start would be cut, denying thousands of Minnesota children the chance to get their educations started right.  $1.6 billion in health research funding would be lost, delaying clinical trials and costing Minnesota good-paying medical research jobs.  All funding for high speed rail would be cut, and transportation grants that have funded projects like the Central Corridor Light Rail would be gutted.  These are cuts we simply cannot afford to make.

As you may know, Congress recently passed legislation that averted a government shutdown for three weeks.  That came after Congress passed a similar bill funding the government for two weeks.  Combined, these two measures made roughly $10 billion in spending cuts to federal programs.  However, making further cuts requires us to look at broader reforms, and I've proposed several that will significantly bring down our long-term deficits.

First, the government doesn't negotiate prices directly with drug companies under Medicare.  The Department of Veterans Affairs does, and for the ten most prescribed drugs, the VA pays about half as much.  Getting rid of the rule preventing Medicare from negotiating would save up to $240 billion over ten years.  Likewise, the oil industry already enjoys enormous profits, and yet still receives huge subsidies and tax breaks.  Many of these tax giveaways don't even help with domestic oil production.  Cutting these would save $64 billion over ten years.  And lastly, when the military says it doesn't need or want something, we should listen.  Defense Secretary Robert Gates has said the military doesn't need the F-35 alternate engine, the Marine Expeditionary Fighting Vehicle, or the Non-Line of Sight Launch System.  Simply not buying these items will save us billions of dollars.

I hope we'll be able to put our differences aside and find a way forward in addressing our nation's long-term deficits.  Minnesotans' jobs-and our place in the global economy-depend on it.

Again, thank you for contacting me, and please don't hesitate to do so in the future regarding this or any other matter of concern to you.


Al Franken
United States Senator

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