WASHINGTON (WOMENSENEWS)--Almost forgotten Monday amid the wreckage of the $700 billion legislation to bail out Wall Street was the failure days earlier of a relatively small $61 billion bill that would have helped low-income people weather the stormy economy.
The "economic recovery" bill favored by Democrats quietly slipped into political oblivion on Friday. It would have pumped billions into infrastructure projects, extend unemployment insurance and beefed up subsidies for health care, food, housing and other programs. Nearly $600 million was envisioned for food subsidies to help offset steep price jumps at the supermarket.
As the majority of the nation's poor, women would have been the main beneficiaries of more government spending on many of the targeted federal programs, said Joan Entmacher, a budget analyst at the National Women's Law Center, a legal advocacy group in Washington, D.C. "It is very disappointing," she said.
Democrats had hoped the Wall Street bailout bill would boost the chances of the economic aid package. Their argument: $700 billion to help the financial system would make the hefty $60-billion-plus price tag for economic aid look cheap by comparison.
"We must not forget Main Street as we work to address the crisis on Wall Street," Senate Majority Leader Harry Reid said in a Sept. 25 statement.
Vicky Lovell, director of employment and work-life programs at the Institute for Women's Policy Research, a think tank in Washington, D.C., agreed. "This package proposes to spend 8 percent of what we're talking about in Wall Street bailouts to help mainstream America and help low-income women and other low-income people," Lovell said. "It seems reasonable and feasible, and it's a minimal step to help the individual real people who are suffering today."
No Bailout for Birth Control
A draft version of the bill also proposed reducing the cost of birth control, according to a Sept. 26 report in the Congressional Quarterly, a news magazine that focuses on Congress. It would have done that by reinstating an obscure provision in the Deficit Reduction Act of 2005 that ended drug-company incentives that helped for many years hold down contraception costs at many clinics.
Before the act took effect, birth control cost as little as $7 a month at clinics on college campuses, according to Choice USA, a reproductive rights group in Washington, D.C. Now students pay the full-market price: $30 to $40 a month.
Before its collapse on Friday, the Democrats' economic package survived a House vote on Sept. 26, just as lawmakers were headed into a busy weekend of tense negotiations over the details of the Wall Street bailout. But in the upper house 42 senators--most Republicans--voted against ending debate, a Senate maneuver for defeating a bill without a roll call vote.
With Senate Democratic leaders eight votes shy of the 60 needed to force the bill to the floor, it fell off the schedule for this year's congressional representatives, who are itching to leave Washington and return to their districts to campaign for the presidential election in November.
The Senate vote followed a veto threat by the Bush administration, which criticized it for increasing government spending, failing to address financial-market instability and not creating more jobs. "Record spending that could lead to tax increases or higher deficits will not advance our economic recovery; it will hinder it," the administration's Sept. 26 statement said.
The House--led by a band of 133 dissident free-market Republicans--dealt the administration a body blow when it narrowly defeated the historic bailout bill Monday. Ninety-five Democrats also opposed the bill.
News reports said some Republicans were put off by a partisan speech before the vote by House Speaker Nancy Pelosi.
The bailout legislation would have given Treasury Secretary Henry Paulson wide latitude to buy up bad debt and requires him to establish a new bank-funded federal insurance program to protect against future losses. It also would have put new limits on executive compensation and would have given some new help to homeowners facing foreclosure as a result of high-interest loans, the kind of loans at the root of the financial-system crisis.
Congressional leaders pledged to search for legislative language that would allow the bailout bill to win support from a majority of lawmakers.
Proponents argued that the "recovery package" would have given a stronger jolt to the economy than an earlier stimulus package, which sent $600 rebate checks to most individual taxpayers last winter.
Lovell said investment in infrastructure would have led to job creation in the male-dominated construction industry. But it also would have helped women--and the economy--by helping the country's lowest-income citizens afford basic necessities.
Women are especially hard hit during economic downturns because they are more likely to be unemployed than men, and as a result have less money and face unemployment for longer periods without regular income, according to the National Council for Research on Women, a think tank in New York. If they do have jobs, they tend to make less than men, have fewer benefits or have part-time positions.
Women are also more likely to hold minimum-wage jobs and to leave the work force to provide caregiving responsibilities, according to the council. Women also save less money and have smaller pensions or retirement accounts.
Aid Spending Defeated
Under the "recovery" bill, state governments would have gotten almost $20 billion to help pay for state Medicaid programs, which provide health care coverage to low-income people.
Unlike the federal government, states are required to balance their budgets, and often scale back expensive health care programs to make ends meet. Currently, 29 states face a total $52 billion shortfall in projected revenues, Reid noted in his statement.
The administration said the government already pays well over half of states' Medicaid programs and adding $20 billion to states would burden taxpayers.
The administration also objected to provisions that would help low-income people afford the rising cost of food, another program that offers disproportionate aid to women, Lovell said.
The bill would have set aside $590 million to help low-income people afford food; costs haven risen by 7.5 percent this year after increasing 5 percent in 2007, according to Reid. The biggest chunk of that food-budget assistance--$450 million--would have gone to nutritional supplements for an estimated 625,000 women and children.
"It seems very targeted at people who need help and at people who will spend the money right away," Lovell said.
But the administration said the extra funding was unnecessary, noting food stamp beneficiaries are slated to see an 11 percent increase in benefits on Oct. 1 and that the federal program overseeing food stamps has a contingency fund to cover shortfalls.
The bill would have extended unemployment benefits by seven weeks in all states and 13 weeks in high-unemployment states. It also would have provided $37.5 million for a program to provide legal services to families facing foreclosure.
Allison Stevens is Washington bureau chief at Women's eNews.
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