House FY 2013 Budget: Another Nail in the Budget Control Act Coffin

Leading up to the release of Rep. Paul Ryan’s (R-WI) fiscal year (FY) 2013 budget resolution proposal, the question has not been whether House Republicans will adhere to the federal spending agreement reached in last year’s debt ceiling deal (they will not), but how far below the previously agreed-upon figures they will go. The House GOP’s abandonment of this agreement is yet another example of actions taken to undermine not only the spirit but also the letter of last summer’s deal.

Representing the culmination of debt and deficit hysteria that engulfed Washington after the midterm elections brought a new kind of legislator to the House, the passage of the deal (known as the Budget Control Act (BCA)) last August ended the debt ceiling crisis. The law initially put caps on federal spending, cutting roughly $841 billion over 10 years and dividing the cuts between security spending (which includes the departments of State and Homeland Security) and non-security spending. In addition, the law established a joint congressional committee to draft a plan to cut another $1.5 trillion from the deficit over 10 years. However, the so-called “Super Committee” failed, triggering $1.2 trillion in additional spending cuts over the next ten years.

Even before the Super Committee failed, however, prominent Republicans began to voice opposition to any cuts to the Department of Defense (DOD). In October 2011, former Republican presidential nominee Sen. John McCain (R-AZ) began promising “to be among the first on the floor to nullify [any automatic defense cuts].” Likewise, Rep. Buck McKeon (R-CA), Chair of the House Armed Services Committee, pledged, “I will not let these sequestration cuts stand.” Both voted in favor of the legislation that created the deficit committee and the resulting automatic cuts. Both have now also introduced legislation to undo the automatic cuts to DOD, shifting the cuts entirely onto non-defense discretionary spending.

In his budget, President Obama also rejected the automatic cuts set out in the agreement but offered an alternative path to deficit reduction. In February, the president’s FY 2013 budget request proposed that Congress replace the automatic cuts triggered by the Super Committee’s failure with a mixture of progressive revenue raisers and spending cuts adding up to more than the total called for in the BCA.

The administration has also proposed removing the so-called firewall between defense and non-defense spending, combining all discretionary spending into one pot and forcing non-defense discretionary programs to compete for funds against the much more powerfully defended defense-spending portion of the budget. The Center on Budget and Policy Priorities (CBPP) concluded:

The proposal wouldn’t change the overall amount of discretionary funding that Congress could approve in any year. But in the current political environment, where advocates of the Pentagon are emphatic, defense contractors employ well-connected lobbyists and make substantial campaign contributions (and, in many cases, are strategically located in key congressional districts), and budgetary savings in defense often are attacked as jeopardizing national security, it would likely lead Congress to cut domestic and international discretionary programs further in order to help protect the military budget.

Ryan, the chair of the House Budget Committee, is unlikely to allow defense spending to face off against non-defense spending. His budget calls for the automatic cuts to defense to be replaced with unspecified cuts to non-defense mandatory spending, which could include cuts to programs such as Social Security, Medicare, Medicaid, and SNAP (formerly known as Food Stamps).

This makes the FY 2013 House budget all the more “ridiculous” and “infuriating,” as budget expert Stan Collender recently wrote. Bending to whims of its Tea Party wing, House Republicans are jettisoning last year’s agreed-upon spending levels. The Senate has already announced that it will appropriate funds based on the levels in the debt ceiling agreement, so the House’s push to reduce that level could threaten the nation with another government shutdown in late September when Congress reopens the fight over spending levels as the new fiscal year approaches.

If the GOP takes either the White House or the Senate in November, the lower overall spending levels proposed in Ryan’s FY 2013 budget resolution could be enacted. Moreover, any cuts to defense, including the Obama administration’s proposed $487 billion slowdown of defense spending growth over the next decade, would likely be abandoned. If Democrats take back the House and maintain control of the Senate, the automatic cuts to non-defense discretionary spending and possibly to discretionary defense spending will likely be undone. They will likely be replaced with a mixture of revenue raisers and other, more targeted spending cuts, as the president has proposed.

Either way, it is not clear that the BCA’s spending caps will actually go into effect. Policymakers said they established the automatic cuts to motivate both political parties to compromise, but members of Congress and President Obama are already attempting to undo the automatic cuts in this election year. The winners in this contest will be determined by the results of the elections in November. Those who argue that budget gridlock in Washington can be solved through reforms to the budget process alone are dreaming.

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