New Federal Budget Would Freeze Crucial Human Services Funding

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February 13, 2011; Source:  Associated Press |  OMB Director Jacob Lew summarized President Obama’s plan for the federal budget in 2012 as including “$1.1 trillion in deficit reduction over the next decade by freezing many domestic programs for five years.”  Lew said that it would be impossible to “do this painlessly.”





No kidding.  The details should concern all nonprofits, because within the discretionary spending total will be some subjects that get more funding, such as education and public works, and others that will get less.   One of the parts of the budget proposal is the revival of Obama’s plan from last year to limit itemized deductions for the wealthy, including limiting deductions for charitable gifts and for mortgage interest.  This will revive the debate that raged in 2009 when the administration looked at limiting itemized deductions for the super-wealthy as one component of paying the bill for national health care reform.  

The budget will also hack s$300 million from the Community Development Block Grant program, the $4.4-billion federal program that helps seniors, low-income residents and rundown neighborhoods. The proposed budget would also cut close to a half billion from the Community Services Block Grants, and cut as much as $2.5 billion from a program to help low-income people pay their heating bills.  The full FY2012 proposals, along with FY2011 rescissions, will be announced today. These cuts hardly constitute a valentine to the hard-working nonprofit sector.—Rick Cohen

  • Writing Out Loud

    President Obama, in his State of the Union, presaged his 50-percent slashing of CSBG funding with this line: “I’ve proposed cuts to things I care deeply about, like community action programs.”

    We desperately need to get the deficit under control. Some agencies could probably find innovative new ways to focus on the most impactful work with less funding. Everyone has to sacrifice.

    But saying you “care deeply about” a program and then cutting it half is like saying you can’t wait to see whether the Yankees or Red Sox pull this game out–then leaving in the 5th inning.

    What the president proposes to do with the remaining 50 percent of CSBG funding hints that at what may be his internal motive. He’s forcing agencies to enter competitive bidding for the rest of CSBG, a la “Race to the Top” for education bucks. It may be his way of forcing the nonprofit sector to examine its priorities and productivity the way state education systems have.

  • rick cohen

    Dear Writing: You may be right that this is the President’s mechanism for the nonprofit sector to reexamine its priorities, but in choosing what to put money into (or “invest in”, as the budget says) and what to cut, the Administration is also expressing its own priorities too.

  • aGGy

    😕 It is not even plausible that Obama would make the proposal to cut CDBG, CSBG and the HEAP program. I can see freezing it, but not making cuts in this economic climate. I work for a funded agency and every day we are flooded with calls from the very poorest to those who have been effected by the recent economic/banking/housing crises. It is akin to making cuts to the most basic human services. No, the gov’t is not responsible to carry us through hard times, but to assist those who are underserved. This subset of our society will suffer and because of this, bigger problems may arise as the years go by.