News, Policies, & Trends

Shared Opportunity, Economic Security in The Bull’s eye on Capitol Hill

By | Feb 9, 2011

House Republicans have put their green eyeshades on. We’re told we should soon — at long last — have the specific cuts they propose to roll back federal spending.

As a first step, House Budget Committee Chairman Paul Ryan (R-WI) has produced his mark for the continuing resolution Congress will have to pass in March to avert a government shutdown.

It would cut non-security discretionary spending by $32 billion below the Fiscal Year 2010 level — or $58 billion below President Obama’s proposed budget for the current fiscal year. (House Republicans are touting the latter figure, as if the proposed budget were the current spending level.)

Congressman Hal Rogers (R-KY), Chairman of the House Appropriations Committee, has said he’ll save an additional $16 billion. He’s set spending levels for the subcommittees accordingly.

But they cover broad areas — in many cases, more than one Cabinet-level agency. So we still don’t know which programs will take the really big hits.

What we do know, thanks to a first-look brief by the Center on Budget and Policy Priorities, is that a continuing resolution reflecting the Rogers directives would mean an overall 15.4% cut for non-security spending that’s not mandated by other legislation.

As Rogers has allocated the cut, the largest dollar-value loss would be in transportation/housing. Very ominous for affordable housing programs, I think.

The third largest is the broad area that includes public education, job training, health care and a wide range of benefits and services for low-income and disabled people. Spending here would be more than $6.5 billion below the Fiscal Year 2010 level and nearly $13.6 billion less than the President requested for this fiscal year.

While these deep cuts seem to pertain only to the continuing resolution, whatever passes in Congress is likely to become the baseline for another round of cuts as the Appropriations Committees get to work on the Fiscal Year 2012 budget the President will formally propose in about a week.

Meanwhile, potentially worse, bipartisan mischief is brewing in the Senate.

Senator Bob Corker (R-TN), joined by Senator Claire McCaskill (D-MO) and others has introduced a bill that would cap federal spending at 20.6% of the nation’s gross domestic product, i.e., the total value of goods and services produced in the U.S.

This, says CBPP, would force $4.5 trillion in spending reductions over the next 10 years — if not through the regular budget process, then through an automatic sequestration, i.e., spending cut, process that would disproportionately impact Social Security, Medicare, Medicaid and other mandatory programs that aid low-income people.

The Corker-McCaskill proposal is only one of several tacks Senators are taking to severely constrain spending without regard to potential impacts on our economy or the safety net that’s meant to keep low and moderate-income people from dire poverty.

Senator Mark Udall (D-CO) has said he’ll join Senator Richard Shelby (R-AL) as cosponsor of a balanced budget amendment to the Constitution — a bad old idea who’s time has come round again.

Basically, the amendment would mean that spending could not exceed revenues in any fiscal year — or about 20% of GDP, no matter what the revenue level.

So during a recession, the federal government would have to drastically reduce spending to accommodate the drop in GDP and the related drop in revenues. This, of course, would further depress private-sector business activity, boost job losses and so produce a further drop in revenues. A sort of automatic anti-stimulus, if you will.

The same could be said for Corker-McCaskill. Huffington Post columnist Robert Creamer explains why.

We often tend to focus on what’s closest to home. For us who live in the District, that’s the $600 million budget gap the Gray administration and DC Council will have to close — and thus threats to the local programs we care most about.

I suppose most residents in the 44 states that have projected shortfalls for the upcoming fiscal year are also riveted on the recent and impending harms to the programs they view as highest priorities.

These programs undoubtedly need the strongest, smartest support we can muster. But I think we need to recognize that developments on Capitol Hill are far greater threats than any state or local budget-balancing exercise.

They’re greater right now because virtually all key state and local programs depend in part on federal funding — education, health care, infrastructure, community development, etc. They’re greater in the long term because they’d lock in drastic spending cuts for the indefinite future.

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