Upcoming 2006 Budget Process Portends Deep Discretionary Cuts

The FY 2006 federal budge, scheduled to be released in February 2005, is important now because federal agencies are already making decisions prior to submitting their individual budgets to the Office of Management and Budget (OMB) in September. The Bush administration has proposed cutting the budget deficit in half over the next five years, while John Kerry has proposed that he will do the same in four years. Because neither presidential candidate seems willing to cut funds from the Defense or Homeland Security programs, there is going to be considerable pressure for them to cut non-defense discretionary spending.

In August, GalleryWatch.com published a report concluding that the FY 2006 budget could very well impose actual dollar cuts in non-defense discretionary spending. The report outlines who the winners and losers will be as the FY 2006 budget will most likely create an unprecedented squeeze.

Congress is also looking ahead to the FY 2006 budget. House GOP leaders will take an annual retreat more than a month early this year, heading to St. Michaels, MD, in early December. The point of this retreat is to give the House leaders a chance to strategize and lay out their priorities for the 109th Congress. They are meeting early so that they will have a chance to figure out their priorities before the new administration, whether it is Republican or Democratic, can map out their agenda.

GOP leaders are expected to spend a significant amount of time discussing priorities for the FY 2006 budget process, especially regarding fiscal responsibility and spending restraints, in light of the $413 billion record high deficit. One Congressman expressed an interest in "staying in budget, doing PayGos, building an emergency fund for emergency supplementals, or a rainy day fund, and just being sensible in how we spend money." Such movement toward greater fiscal responsibility is certainly a wise and valid goal, and one which stands in stark contrast to the 108th Congress's propensity for tax cuts severely skewed toward the wealthy.

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