What Happened to the President's Spending Cuts?
Yesterday, on the heels of President Obama signing a $1.1 trillion "minibus" CRFB released a paper on the importance of controlling discretionary spending growth. The paper showed that, while fiscal conservatives tend to worry about mandatory spending, discretionary spending has actually been growing faster over the last decade. It also devotes a small box to discussing President Obama's proposed spending cuts -- which this blog will discuss in more detail.
As we explain:
In his 2010 budget request, President Obama proposed terminating or cutting about 75 discretionary spending programs to achieve $11.5 billion in savings. Proposals ranged from as large as $3 billion for the F-22 Fighter Aircraft – which most experts deem no longer necessary - to as small as $1 million for the Christopher Columbus Fellowship Foundation – which the Administration found spent 80% of its funds on overhead.
We first discussed and analyzed these proposed cuts in our Analysis of the President's FY 2010 Budget back in May. There, we pointed out that administrations have historically faced opposition in Congress in trying to enact cuts and eliminations. As we wrote:
Despite proposing more cuts than the Obama Administration, President Bush saw limited success in eliminating or cutting government programs. For its FY2006 Budget, coming off a large electoral victory with a unified Congress and few spending pledges, the Bush Administration succeeded in achieving around 40% of its proposed cuts and saving roughly $6.5 billion. In the next two years, Congress enacted less than 15% of the Administration’s proposed cuts, for savings of less than $2 billion a year.
We haven't yet reviewed all of President's requested cuts (we plan to in the next month or so), but we did try to look at the President's top ten proposed cuts to see if they were included in the appropriations bills he has signed. We excluded defense spending because it has not been passed yet. We also excluded two proposed "corps of engineers" cuts, since they came out of difficult-to-trace earmark spending.
Of the top ten programs remaining, we found that only two were enacted as requested. Another three were partially enacted. Yet five of the proposed cuts were ignored altogether -- including four which received funding increases.
Out of the $1.78 billion in proposed savings from these ten items, in fact, Congress only enacted $560 million -- less than one third. And that doesn't even include the $200 million in increased spending for areas the President recommended cutting. That would put the net cut at closer to $360 million.
Here is a chart of the spending cuts (numbers in millions). We intend to expand it to include all the President's proposed cuts the coming months:
||Agency||FY2009 Levels||FY2010 Proposed Level||Actual FY2010 Funding Level|
|Health Care Facilities and Construction||HHS||$310||$0||$338|
|Surface Transportation Priorities||Transportation||$161||$0||$293|
|Water Infrastructure Earmarks||HHS||$145||$0||$162|
|Agricultural Research Service Buildings and Facilities||Agriculture||$47||-$50||$71|
|Nuclear Power 2010||Energy||$178||$20||$105|
|Election Assistance Commission Grants||Financial Services||$106||$52||$75|
|Safe and Drug Free Schools||Education||$295||$0||$0|
If Congress cannot even enact these small cuts, we worry about its ability to control discretionary spending on the whole. We thus urge Congress to enact some type of enforcement mechanism, such as caps, to keep Congress from bowing to the temptation to overspend. As we explain:
Just holding discretionary spending growth to inflation – with strong enforceable spending caps – would be a positive step. In the 1990s, it was these types of caps, along with pay-as-you-go rules, strong economic growth, slower-than-usual health care cost growth, and a commitment to deficit reduction that led to budget surpluses...caps would prevent the situation from further deteriorating, something which would almost certainly occur under the current process...controlling discretionary spending alone cannot be enough to avert the coming debt crisis...But discretionary controls can make a far bigger difference than most policymakers realize, and more importantly, they can send a signal that we are serious about getting our burgeoning debt under control.