CBO: Agency budgets at lowest levels since 2002
http://dervishcom.blogspot.com/2011/10/cbo-agency-budgets-at-lowest-levels.html
Authorized spending for government agencies fell to its lowest level since 2002 last year and would fail to keep pace with inflation under budget caps adopted during this summer's debate over the federal debt limit, the director of the Congressional Budget Office said Wednesday.
Agency spending would take another dramatic hit if a congressional supercommittee fails to agree on additional savings, triggering $1.2 trillion in automatic spending cuts. Under that scenario, the CBO said, agency budgets would lag behind inflation by as much as 16 percent by 2021, endangering fast-growing programs such as veterans' health care and Pell college grants.
“In addition, current funding for some programs is less than many analysts believe is necessary to address the nation’s needs,” CBO director Douglas Elmendorf said in testimony prepared for delivery. “An example in this category is spending on transportation and other forms of infrastructure.”
Elmendorf was set to testify Wednesday morning before the supercommittee, formally known as the Joint Select Committee on Deficit Reduction, in a hearing scheduled to focus exclusively on agency budgets and other spending that lawmakers control through annual appropriations.
Such spending accounted for $1.35 trillion — or 40 percent of federal outlays — in the fiscal year that ended in September, with slightly more than half going to the Pentagon and the wars in Iraq and Afghanistan. Domestic agencies accounted for less than 20 percent of overall spending but have so far been the primary target for Republican lawmakers looking to reduce borrowing and tame the nation’s spiraling debt.
In her opening remarks, Sen. Patty Murray (D-Wash.), the panel’s Democratic co-chairman, argued that the supercommittee must take a more balanced approach.
“Congress has gone back to this relatively small pot with cuts and spending caps again and again — while leaving many other pieces of the budget essentially untouched,” Murray said. “All the focus on this one area is especially striking given that we are spending roughly the same on non-defense discretionary programs in 2011 as we did in 2001 — while mandatory programs have increased, defense spending has increased and revenues have plummeted.”
Although every part of the budget should be scrubbed for inefficiencies, Murray said, “it doesn’t make sense to simply keep slashing at one small part of the budget that disproportionately affects middle-class families and the most vulnerable Americans.”
Rep. Jeb Hensarling (R-Tex.), the panel’s Republican co-chairman, essentially agreed with Murray about the need for balance, arguing that policymakers must focus on reining in the soaring cost of health and retirement programs, which account for a far larger portion of the federal budget and are growing quickly.
With Wednesday’s hearing, “We may be debating the pennies, nickels and dimes in a debt crisis that is demanding half dollars and dollar bills,” Hensarling said in opening remarks.
Nonetheless, Hensarling said, spending at agencies in charge of housing, commerce and the environment have soared since President Obama took office, even excluding the temporary increases enacted as part of the 2009 economic stimulus legislation. “These particular budgets are growing,” he said, when the household budgets of those who finance Washington spending are “unfortunately contracting.”
The supercommittee is set to hear about a different approach to budget-cutting next Tuesday, when the chairmen of two bipartisan debt-reduction panels will present testimony, including Erskine Bowles, the former Clinton White House chief of staff, and Alan Simpson, a former GOP senator from Wyoming. Bowles and Simpson are scheduled to discuss the work of Obama’s fiscal commission, which called for agency cuts, but also cuts to Social Security and Medicare and a significant increase in federal tax collections.
In his testimony Wednesday, Elmendorf offered a bit of bad news for the panel about potential savings they could claim from winding down the wars in Iraq and Afghanistan. The White House estimated that such savings could amount to more than $1 trillion over the next decade. But because war spending has already begun to fall, CBO has adjusted its estimates, Elmendorf said, and war savings could now contribute only about $700 billion toward the committee’s goal of at least $1.2 trillion in savings.
In her opening statement, Murray fired back at critics who have claimed in recent days that the supercommittee is floundering and risks blowing a Thanksgiving deadline for a debt-reduction plan.
“We aren’t there yet, but I am confident that we are making progress,” she said. “And I’m hopeful that we’re moving quickly enough to meet our rapidly approaching deadline.”
Agency spending would take another dramatic hit if a congressional supercommittee fails to agree on additional savings, triggering $1.2 trillion in automatic spending cuts. Under that scenario, the CBO said, agency budgets would lag behind inflation by as much as 16 percent by 2021, endangering fast-growing programs such as veterans' health care and Pell college grants.
“In addition, current funding for some programs is less than many analysts believe is necessary to address the nation’s needs,” CBO director Douglas Elmendorf said in testimony prepared for delivery. “An example in this category is spending on transportation and other forms of infrastructure.”
Elmendorf was set to testify Wednesday morning before the supercommittee, formally known as the Joint Select Committee on Deficit Reduction, in a hearing scheduled to focus exclusively on agency budgets and other spending that lawmakers control through annual appropriations.
Such spending accounted for $1.35 trillion — or 40 percent of federal outlays — in the fiscal year that ended in September, with slightly more than half going to the Pentagon and the wars in Iraq and Afghanistan. Domestic agencies accounted for less than 20 percent of overall spending but have so far been the primary target for Republican lawmakers looking to reduce borrowing and tame the nation’s spiraling debt.
In her opening remarks, Sen. Patty Murray (D-Wash.), the panel’s Democratic co-chairman, argued that the supercommittee must take a more balanced approach.
“Congress has gone back to this relatively small pot with cuts and spending caps again and again — while leaving many other pieces of the budget essentially untouched,” Murray said. “All the focus on this one area is especially striking given that we are spending roughly the same on non-defense discretionary programs in 2011 as we did in 2001 — while mandatory programs have increased, defense spending has increased and revenues have plummeted.”
Although every part of the budget should be scrubbed for inefficiencies, Murray said, “it doesn’t make sense to simply keep slashing at one small part of the budget that disproportionately affects middle-class families and the most vulnerable Americans.”
Rep. Jeb Hensarling (R-Tex.), the panel’s Republican co-chairman, essentially agreed with Murray about the need for balance, arguing that policymakers must focus on reining in the soaring cost of health and retirement programs, which account for a far larger portion of the federal budget and are growing quickly.
With Wednesday’s hearing, “We may be debating the pennies, nickels and dimes in a debt crisis that is demanding half dollars and dollar bills,” Hensarling said in opening remarks.
Nonetheless, Hensarling said, spending at agencies in charge of housing, commerce and the environment have soared since President Obama took office, even excluding the temporary increases enacted as part of the 2009 economic stimulus legislation. “These particular budgets are growing,” he said, when the household budgets of those who finance Washington spending are “unfortunately contracting.”
The supercommittee is set to hear about a different approach to budget-cutting next Tuesday, when the chairmen of two bipartisan debt-reduction panels will present testimony, including Erskine Bowles, the former Clinton White House chief of staff, and Alan Simpson, a former GOP senator from Wyoming. Bowles and Simpson are scheduled to discuss the work of Obama’s fiscal commission, which called for agency cuts, but also cuts to Social Security and Medicare and a significant increase in federal tax collections.
In his testimony Wednesday, Elmendorf offered a bit of bad news for the panel about potential savings they could claim from winding down the wars in Iraq and Afghanistan. The White House estimated that such savings could amount to more than $1 trillion over the next decade. But because war spending has already begun to fall, CBO has adjusted its estimates, Elmendorf said, and war savings could now contribute only about $700 billion toward the committee’s goal of at least $1.2 trillion in savings.
In her opening statement, Murray fired back at critics who have claimed in recent days that the supercommittee is floundering and risks blowing a Thanksgiving deadline for a debt-reduction plan.
“We aren’t there yet, but I am confident that we are making progress,” she said. “And I’m hopeful that we’re moving quickly enough to meet our rapidly approaching deadline.”
