Domestic Discretionary Spending: Time for a New Approach

Domestic Discretionary Spending: Time for a New Approach

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How do Democrats stop the midterm elections from turning into a Republican onslaught that costs them both the House and Senate?
The key, as Republican and Democratic strategists seem to agree, may be in public perceptions about the extent to which individual candidates in states and districts across America are committed to cutting federal spending. That reality has enormous implications for post-election Washington, and it suggests that those who seek to protect high-priority domestic spending, in particular, should adjust their strategies accordingly.

Democrats hope to focus on Republican fiscal hypocrisy – specifically, GOP insistence on extending President Bush’s enormously expensive tax cuts for the wealthiest Americans, which are due to expire at year-end, while vowing to cut federal spending in the interest of reducing budget deficits. But, as the Washington Post outlined, Democrats also want to compete with Republicans as spendthrifts. You would expect that from non-incumbent Democratic candidates. But even incumbents like Colorado Sen, Michael Bennet, who backed President Obama’s stimulus, health care, and other major initiatives, now decry the recent run-up in red ink and promise to cut spending when they return.

We will not know until Election Day which party will run the next Congress. But, when it comes to spending, we already know a larger truth: the next Congress will include lots of members who just pledged to cut it.

On the domestic side, most spending goes for the “Big Three” entitlement programs – Social Security, Medicare, and Medicaid. But don’t expect the new Congress to set its sights on them immediately. Democrats are warning voters this fall about a secret Republican plot to privatize Social Security, so the GOP will steer clear of that program for awhile. Congress cut Medicare substantially as part of health reform, so further major cuts may be hard to find in the short term; and Congress just put an estimated 16 million more Americans on Medicaid as part of health reform, so cutting that program will not be easy either.

Instead, the incoming 112th Congress will flex its deficit-cutting muscles first and foremost on the roughly $1.4 trillion non-entitlement part of spending known as discretionary spending – particularly domestic discretionary spending.

Each year, Congress sets a total for discretionary spending – defense as well as thousands of domestic programs (from education to foster care, research to space, housing to transportation, energy to environmental protection) and lets the House and Senate Appropriations Committees divvy it up. (For more on how that works, check here and here).

The appropriations process tilts heavily toward the status quo. The Senate and House Appropriations Committees have 12 subcommittees, each of which has particular programs under its jurisdiction and each of which hopes to maximize its allocation from the overall spending pot.

To keep all of the subcommittees happy (or, in a deficit-cutting environment, to make them less unhappy than otherwise), the full committees tend to avoid dramatic shifts in allocations among the subcommittees. That means that, even as social conditions change and, presumably, federal spending priorities change with them, obstacles to big priority shifts are formidable.

Liberal interest groups fight hard for the largest overall amount of discretionary spending for an obvious reason. The larger the overall amount, the more money with which to seek funding for high-priority programs. At the same time, the advocates have been reluctant to target some programs for cuts, arguing that the more they stick together, the more likely that they will secure a larger overall discretionary amount from Congress – and, conversely, the more that they identify wasteful and inefficient programs, the more that that will give Congress an excuse to reduce the overall total.

But the current environment cries out for something gutsier and more creative. As the money gets tight, the need to prioritize grows. If education is more important for the nation’s future than housing, so be it. If research will serve the country more than rural development, so be it. Simply put, we cannot afford to waste public money on programs that the advocates know do not work – even if they are not willing to say so.

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Lawrence J. Haas is former Communications Director to Vice President Gore and, before that, to the White House Office of Management and Budget. He's now a public affairs consultant who writes widely about foreign and domestic affairs, including fiscal policy. 

Lawrence Haas
is former senior White House official and award-winning journalist, writes widely on foreign and domestic affairs. His articles have appeared in The New York Times, USA Today, Los Angeles Times, Baltimore Sun, Miami Herald, San Diego Union-Tribune