Budget Battles Begin, Obama to Fire the First Shot
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The Fiscal Times
January 31, 2011

A year ago, President Barack Obama unveiled his new fiscal 2011 budget  – one that imposed a three-year freeze on domestic spending and a raft of spending cuts. The idea of an across-the-board freeze on all nondefense discretionary spending didn’t sit well with members of the House and Senate Appropriations Committees, which have a big say in how federal funds are spent. And three of Obama’s specific cuts – for development of the second engine for the Joint Strike Fighter aircraft, the NASA “return to the moon” program, and housing subsidies for the elderly – brought howls from lawmakers.

None of Obama’s $20 billion in cuts were implemented. As the saying goes, the president proposes but the Congress disposes — and the content of the massive budget books that the administration sends up to Capitol Hill typically emerge from the annual budget and appropriations process looking quite different.

“That is a natural, inevitable congressional reaction,” said Brookings Institution defense budget expert Michael O’Hanlon. “And it’s not even wrong,” he added, noting that members of Congress are sent there to protect jobs in their districts, and each budget line item means jobs somewhere. Particularly in a recession, members of Congress are reluctant to see jobs vanish, even in the name of deficit reduction.

Once the president unveils his new budget, usually on the heels of the State of the Union speech, the elaborate budget process begins. The House and Senate budget committees hold extensive hearings, involving testimony by the White House budget director and key cabinet members, before attempting to draft budgets of their own, which may or may not follow some of the president’s recommendations. In some years, the House and Senate may agree on a spending blueprint, as was the case last year.

Then the committees swing into action, with the goal of drafting a dozen separate major government spending bills. If the two parties are divided and can’t agree, they pass continuing resolutions to keep the government operating. Congress adjourned last month after failing to agree on a comprehensive spending plan for the current fiscal year, which began last Oct. 1. A continuing resolution  allowing the government to operate at last year’s spending levels is due to expire March 4. Congress must also act to raise the national debt ceiling later this spring or face possible default on government borrowing.

With the deficit-minded Republican Party now in charge of the House, Obama is planning to send up a budget for fiscal 2012 in mid-February that includes a five-year freeze on nondefense discretionary spending and $78 billion in defense savings. But there is no assurance either of these plans will fly.

House Speaker John Boehner, R-Ohio, Senate Republican Leader Mitch McConnell, R-Ky. and others say a freeze at the highest spending levels in history is not enough, and that they want to roll back spending to 2008 levels — before the Bush and Obama administrations spent massive sums on economic stimulus and bailout programs. And late last week, House Armed Services Committee Chairman Howard P. “Buck” McKeon, R-Calif., vowed to block proposed cuts in the Pentagon budget, even as freshmen committee members backed by the Tea Party argued that defense should be cut along with other programs for the sake of reducing a deficit now projected at $1.5 trillion this year.

“I cannot say it strongly enough: I will not support any measures that stress our forces and jeopardize the lives of our men and women in uniform,” McKeon said.

This year the war over the budget may be fought on different fronts. For one thing, Republicans are divided against themselves. Some conservatives want deep cuts — $100 billion worth of domestic cuts. Others, including House Budget Committee Chairman Paul Ryan, R-Wis., are more moderate, even with burgeoning deficits.

Meanwhile, the Democratic Party in the House emerged from last November’s election with a much diminished and more liberal-leaning caucus than before. And with former House Speaker Nancy Pelosi, D-Calif., still leading the party, House Democrats are not inclined to support any budget saving measures that reduce benefits to middle-class or poorer Americans.