Spending Bill: Details of $38 Billion in Cuts
Policy + Politics

Spending Bill: Details of $38 Billion in Cuts

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The House late last night unveiled the details of the compromise plan to cut nearly $38 billion in spending from this year's budget, with roughly $20 billion coming from discretionary spending, the bulk in the areas of education, labor and health programs. The budget deal forged late Friday by the Obama administration and congressional Republican leaders will keep the government operating through the remainder of fiscal 2011, but at the cost of practically every aspect of domestic spending, and some trims to homeland security programs.

Funding for programs ranging from children's health-care initiatives and federal Pell grants, to job training and highway and rail projects would be cut under the agreement, which awaits final approval this week by the House, Senate and President Obama. Details of the cuts were revealed late Monday night by the House Appropriations Committee. The agreement marked an end to a months' long battle between the Democrats and Republicans over spending levels for the current year and the threat of a government shutdown. It also represents the largest non-defense spending cut in U.S. history.

“Never before has any Congress made dramatic cuts such as those that are in this final legislation," said House Appropriations Committee Chairman Harold Rogers, R-Ky. "The near $40 billion reduction in non-defense spending is nearly five times larger than any other cut in history, and is the result of this new Republican majority’s commitment to bring about real change in the way Washington spends the people’s money.” 
Rogers said that his committee went line-by-line through agency budgets last weekend to negotiate and craft "deep but responsible reductions" in virtually all areas of government. "Our bill targets wasteful and duplicative spending, makes strides to rein in out-of-control federal bureaucracies, and will help bring our nation one step closer to eliminating our job-crushing level of debt.” Chairman Rogers continued.

While the final spending legislation goes after a multitude of domestic programs, it provides an increase in defense spending.  The Department of Defense is funded at $513 billion – or approximately $5 billion above last year's level – providing adequate resources for a military now waging war on three fronts. The bill also includes an additional $157.8 billion for emergency overseas contingency operations to advance U.S. missions abroad.

 Here is a breakdown of the final agreement and spending cuts, as outlined by the appropriations committee:

Overall Spending Limit: The final continuing resolution will include a total of $1.049 trillion in funding, a nearly $38 billion reduction from last year’s (fiscal year 2010) levels. This includes the $11 billion in reductions previously approved by Congress and signed into law under the previous three continuing resolutions, as well as roughly $27 billion in additional new spending cuts.

Agriculture: The bill funds Agriculture programs at $20 billion, $3 billion below the fiscal year 2010 enacted level and $3.2 billion below the President’s 2011 budget request.  It provides $1 billion for Food Safety and Inspection, $10 million below the fiscal year 2010 level, while allowing for uninterrupted meat, poultry, and egg products inspection activities of the agency. The bill also reduces Agricultural Credit Programs by $433 million, Agricultural Research Service by $64 million, and the National Institute for Food and Agriculture by $125.9 million below the fiscal year 2010 levels. The measure also includes $6.75 billion for the Special Supplemental Feeding Program for Women, Infants and Children (WIC), which allows the program to support more than 9 million income-eligible mothers, infants, and children up to 5 years of age.

Commerce, Justice, Science: The Commerce, Justice, Science section of the legislation contains a total of $53.4 billion, a $10.9 billion, or 17%, reduction from fiscal year 2010 levels, and a reduction of $7.1 billion, or 12%, from the President’s fiscal year 2011 request.  The CR provides funding above fiscal year 2010 levels for National Institute of Standards and Technology research and manufacturing programs, as well as critical FBI national security and prisons/detention requirements. Justice Department appropriations are reduced by $946 million below fiscal year 2010, with significant reductions to grant and construction programs, and Commerce Department appropriations are cut by $6.5 billion below fiscal year 2010. The bill also includes $18.5 billion for NASA and fully funds the newly authorized exploration program.

This section of the CR also prohibits funding for: the establishment of a Climate Service at the National Oceanic and Atmospheric Administration; the approval of new fisheries catch-share programs in certain fisheries; and for NASA and the Office of Science and Technology Policy to engage in bilateral activities with China.
Energy and Water: The Energy and Water section is funded at $31.8 billion in the CR. This is a 10% reduction – or $3.6 billion – from the President’s fiscal year 2011 request, and a 5% reduction – or $1.7 billion – from fiscal year 2010 levels. These significant cuts further the House Republican commitment to deficit reduction and reining in the size of government, while at the same time protecting American security, providing support for private sector growth, and promoting a balanced national energy supply. The bill funds the Army Corps of Engineers at the President’s request level of $4.9 billion, supports existing applications for renewable energy loan guarantees at the Department of Energy, and provides a $697 million (7%) increase for the National Nuclear Security Administration to ensure adequate funding for critical components of our national defense.

Financial Services: The Financial Services and General Government section of the CR contains a total of $22 billion, a $2.4 billion, or 10%, reduction from fiscal year 2010 levels, and a reduction of $3.4 billion, or 14%, from the President’s fiscal year 2011 request.

The CR reduces most Treasury and Executive Office of the President accounts and reduces funding for construction of new federal buildings by more than $800 million. The bill provides a $13 million increase over last year for the Inspector General of Troubled Asset Relief Program (TARP) to provide strong oversight of the billions of dollars remaining in TARP assets and continues current funding for drug task forces and programs to assist small businesses.

The CR restores a long-standing provision against the use of federal and local funds for abortions in the District of Columbia. The bill also includes the reauthorization of the DC Opportunity Scholarships, along with a $2.3 million funding increase, to stop the termination of the program and allow new students to participate. The legislation also eliminates four Administration “Czars,” including the “Health Care Czar,” the “Climate Change Czar,” the “Car Czar,” and the “Urban Affairs Czar.”

Homeland Security: A total of $41.8 billion in discretionary funding is provided for the Department of Homeland Security (DHS) for fiscal year 2011. This is $784 million, or 2%, below FY 2010, and $1.9 billion, or 4%, below the President’s fiscal year 2011 request.

All critical frontline operations for DHS – including Customs and Border Protection, Immigration and Customs Enforcement, the Transportation Security Agency, the Coast Guard, and the Secret Service are sufficiently funded to meet mission requirements and sustain staffing levels. This includes funding for 21,370 Border Patrol agents, 33,400 ICE detention beds, and military pay and allowances for the U.S. Coast Guard. The bill reduces CBP’s Border Security Fencing, Infrastructure.

Interior: The CR includes $29.6 billion in discretionary funding in the Interior and Environment section of the bill, which is 8.1%, or $2.62 billion, below the fiscal year 2010 enacted level and 8.5%, or $2.8 billion, below the President’s request.

The Environmental Protection Agency (EPA) is reduced by $1.6 billion, a 16% decrease from last year’s level. The cuts to the EPA alone represent 61% of the bill’s reduction compared to last year’s level. Funding levels for Land and Water Conservation Fund (land acquisition) programs are reduced $149 million (-33%), climate change funding bill-wide is cut by $49 million (-13%), and funding for the National Endowment for the Arts and the National Endowment for the Humanities is reduced by a combined $25 million from last year’s levels. Funding levels for operational accounts bill-wide are largely sustained to prevent layoffs and the closure of national parks and forests, wildlife refuges, Smithsonian museums and other sites.

Labor, HHS, Education and Related Agencies
The Labor, HHS, Education and Related Agencies section of the CR contains a total of $157.7 billion, roughly a $5.5 billion, or 3.36%, reduction from fiscal year 2010 levels. The bill is also nearly $13 billion, or 7.6 percent, below the President’s fiscal year 2011 request.  The CR preserves funding for large education programs that fund elementary and secondary schools as well as special education and provides a modest increase for Head Start to ensure that all children currently enrolled will continue to receive services, while making prudent reductions in lower priority areas. In addition, the bill continues the Pell Grant Program at the current maximum award level of $4,860.

The bill terminates funding for more than 55 programs, for a total savings of well over $1 billion. It also ends two programs funded in the health care reform law -- the Consumer Operated and Oriented Plan and the Free Choice Voucher programs. The bill makes reforms to the Pell Grant Program that are estimated to save more than $35 billion over the next 10 years by eliminating the ability of students to draw down two Pell Grant awards at the same time. Finally, the CR will return Title X funding to fiscal year 2008 levels.

Legislative Branch: Legislative Branch is reduced by $103 million from last year’s levels. Of this amount, funding for the U.S. House is reduced by $55 million from last year – or 53% of the total cut – and reflects a 5% cut in Member, Committee, and Leadership office expenses except for the Appropriations Committee, which offered a larger cut of 9%.
State and Foreign Operations: The funding level for the State Department and Foreign Operations in the CR is a total of $48.3 billion – a $504 million reduction from last year’s level and an $8.4 billion reduction from the President’s fiscal year 2011 request. 
Transportation, Housing and Urban Development: The Transportation, Housing, Urban Development and Related Agencies section of the CR contains a total of $55.5 billion, a $12.3 billion, or 18%, reduction from fiscal year 2010 levels, and a reduction of $13.2 billion, or 20%, from the President’s fiscal year 2011 request.

For the Department of Transportation, the bill eliminates new funding for High Speed Rail and rescinds $400 million in previous year funds, for a total reduction of $2.9 billion from fiscal year 2010 levels. The bill reduces funding for transit by a total of $991 million and includes a total of $528 million in new funding for the “TIGER” grant program. While the majority of programs funded by the Highway Trust Fund remain at fiscal year 2010 levels, the bill contains total contract authority rescissions of $3.2 billion, of which $630 million is comprised of old earmarks.

For the Department of Housing and Urban Development, the Community Development Fund program was reduced $942 million, for a fiscal year 2011 funding level of $3.5 billion. The Section 8 program is funded at a level of $18.4 billion with $16.7 billion for voucher renewals, $1.45 billion for administrative fees, $35 million for Section 811 mainstream voucher renewals, and $50 million for HUD-Veterans Affairs Supportive Housing (VASH) vouchers.

Related Links:
GOP Spending Cuts Hit Obama Priorities (The Fiscal Times)
Budget deal: Cuts of $38B include accounting gimmicks, target Obama priorities (Washington Post)
The Case for Higher Taxes (The Star Ledger)