House Frames the Issues: Even More Guns, Even Less Butter
New House rules adopted on January 5 allow the chair of the House Budget Committee to set discretionary spending levels for FY 2011, and to allocate spending to the various appropriations sub-committees, sidestepping consultation with members of both parties in the Budget Committee. Budget Chair Paul Ryan has said that he will roll back discretionary spending (except for military spending) to 2008 levels, in keeping with the majority party’s “Promise to America.”
Another new rule is likely to have an even larger long term impact on the ability of the federal government to function: The new rules allow Congress to increase the deficit by approving more tax cuts, without offsetting the cuts with less spending. This is an expensive proposition. Continuing special tax breaks to households making more than $250,000 a year, for example, and exempting almost all estates from any estate taxes will cost the U.S. Treasury $139 billion in 2011 and 2012. Congress approved this tax deal before adjourning in December. New House rules will permit more tax cuts, and more lost revenue, without having to consider their impact on the deficit.
So what would happen if spending was rolled back to 2008 levels? The chart below shows that non-military discretionary spending grew by about $172 billion since 2008. Total discretionary spending grew by about $273 billion. If Chairman Ryan intends to roll back only the non-military discretionary programs to 2008 levels, he will need to propose about a 25 percent reduction in spending – on programs like education and training, aid to states (several of which are going bankrupt), transportation and highways, housing and mortgage assistance, employment and employment training programs, veterans’ programs, and many others.
The irony of the $139 billion give-away to the richest 2 percent of households in December, and the demand that non-military discretionary spending be reduced by $172 billion in January is hard to miss.
The personal pain of those spending cuts to millions of families around the country will be magnified into prolonged public pain, as our economy continues to falter.
Meanwhile, apparently, the military budget is exempt from cuts. The proposed budget for FY2011, submitted by President Obama last February, called for a $30 billion increase in military spending. Congress is said to be quailing at the prospect of the so-called “budget cutting” proposals brought to the hill last week by Defense Secretary Gates, even though the Pentagon budget would actually increase by about $12 billion in Gates’ plan.