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Budget deal details reveal painful cuts, but some creative accounting too
Jed Lewison for Daily Kos Tue Apr 12, 2011
Late last night, the House and Senate Appropriations Committees revealed the final details of the compromise funding deal for fiscal year 2011. Based on numbers released by the House Appropriations Committee, here's a chart summarizing the spending level changes.
Keep in mind that we're talking about non-emergency discretionary funds here, comprising roughly 30% of the overall budget, and that taken as a whole, federal spending will actually increase in FY2011 relative to FY2010. However, within the non-emergency discretionary funds, there have been substantial cuts, particularly considering the cuts are really only for seven months of the fiscal year.
House Republicans are boasting that they cut "nearly $40 billion" in spending, but based on the numbers they released the overall cut is actually $34.1 billion. Presumably, they are simply not counting the roughly $6 billion in spending increases going to defense and the Veterans Affairs/Military Construction budget. The only way that sort of accounting makes sense is if you're more interested in cutting domestic priorities than in actually cutting overall spending, but then again, that pretty much describes the GOP, so their new math sort of makes sense, at least in a twisted kind of way.
TPM identified some of the most painful and counterproductive cuts:
- Environmental Protection Agency funding cut by $1.6 billion, a 16% decrease, including $49 million cut from climate change programs
- Roughly $750 million cut from energy research and development programs
- $1 billion cut from efforts to prevent the spread of HIV and other diseases
- $600 million cut from community health centers
- $78 million cut from research on reducing health care costs
Other cuts include $390 million cut from the LIHEAP energy assistance program and a 0.2% across-the-board cut to all non-defense line items. And one of the worst cuts was the elimination of Ron Wyden's program to allow under-insured workers to buy insurance in health care exchanges.
But while many of the cuts are severe, CBS and AP report that a significant chunk of the cuts actually reflect accounting and budget gimmicks.
Many of the cuts appear to have been cuts in name only, because they came from programs that had unspent funds.For example, $1.7 billion left over from the 2010 census; $3.5 billion in unused children's health insurance funds; $2.2 billion in subsidies for health insurance co-ops (that's something the president's new health care law is going to fund anyway); and $2.5 billion from highway programs that can't be spent because of restrictions set by other legislation.
About $10 billion of the cuts comes from targeting appropriations accounts previously used by lawmakers for so-called earmarks - pet projects like highways, water projects, community development grants and new equipment for police and fire departments. Republicans had already engineered a ban on earmarks when taking back the House this year.
Republicans also claimed $5 billion in savings by capping payments from a fund awarding compensation to crime victims. Under an arcane bookkeeping rule -- used for years by appropriators -- placing a cap on spending from the Justice Department crime victims fund allows lawmakers to claim the entire contents of the fund as "budget savings." The savings are awarded year after year.
In all, that's $24.9 billion. I think the report is wrong about the co-op funding not actually being cut, but cutting them doesn't impact the discretionary baseline from next year. And not all of it is smoke and mirrors—earmarks are real spending (though Republicans had previously promised to ban them) and, as David Dayen argues, zeroing unspent funds represent an opportunity loss. Still, they aren't cuts to existing programs, and that's important when considering that funding levels for current programs provide a baseline for next year's budget.
But even if the actually story of the spending cuts isn't as bad as the GOP's top-line claim of "nearly $40 billion" might suggest, there's still nothing good about what happened here. The only problem we have with domestic discretionary spending is that we're not spending enough of it, and this deal cut it, while holding the line on homeland security funding and increasing our military budget, which actually should be a real source of savings. And to the extent we have a long-term spending issue, it's driven by health care costs, yet this deal actually cuts funding to research ways to reduce health care expenses.
So given political realities, this deal is probably less bad than it otherwise could have been, and at least in my view, it's better than shutting the government down. But that doesn't mean it takes us in the right direction.
