Spending Cuts of $38B Morph Down to $352M – A More Positive View?

As I look around for analyzation of the Continuing Resolution agreement, it’s hard to know the truth, especially when from a somewhat positive report from the AP and Politico . Nevertheless, I’ll share some of this with you, with the caveat of ‘reader beware.’ The “non-partisan” Congressional Budget Office (CBO) says the $38 Billion in cuts reportdly ‘achieved’ by the GOP in last weeks stand-off on the Continuing Resolution (CR) is only a mere $352 MILLION – less than 1% of $38 Billion, through September 30, 2011. According to Andrew Taylor (AP) the CBO has also confirmed that the CR DOES CUT $38 BILLION in NEW SPENDING AUTHORITY, but most of it will come over time. So if true, there’s that.

John Boehner

The National Journal summarizes:

1) The CR agreement increased defense spending by $8 Billion, which upped spending by $3.3 Billion compared to current levels.

2) Non-defense spending claiming to save $5.7 Billion really cut nothing – zero dollars- due to the cuts made to “spending authority” for dollars unlikely to be spent anyway.

I doubt in reality we have any money with “spending authority “attached to it, going unspent. I can buy this as a cut, but that doesn’t mean much. I will side with Boehner on this until proven otherwise, keeping in mind Senator Inhofe admonition that unspent monies inevitably end up in Obama’s stash, and funneled to unelected bureaucrats?

3) Pell grants will reduce spending by $40 Billion, but only $1 Million in 2011. (David Rogers writing for Politico says the 2011 savings is $133 million.)

AP – Andrew Taylor:

To a fair degree, the lack of immediate budget-cutting punch is because the budget year is more than half over and that cuts in new spending authority typically are slow to register on deficit tallies. And Republicans promise that when fully implemented and repeated year after year, the cuts in the measure would reduce the deficit by $315 billion over the coming decade.

Still, the analysis is an early lesson about Washington budgeting for junior lawmakers elected last year on promises to swiftly attack the deficit…

With this bill we not only are arresting that growth but we are reducing actual discretionary spending by a record amount, nearly $40 billion in actual cuts in spending that has not ever been accomplished by this body in its history, in the history of the country,” said House Appropriations Committee Chairman Harold Rogers, R-Ky. “The cuts in this bill exceed anything ever passed by the House.”

Politico’s David Rogers:

Congressional Budget Office data, posted Wednesday morning, credit the Boehner-Obama deal with capping appropriations at a level nearly $38 billion lower than when Republicans took charge of the House in January. But this will have only a minimal impact on outlays or direct spending before the 2011 fiscal year ends Sept. 30…

By any measure, the budget deal still represents a significant shift in government policy. And while the news coverage tends to focus on a few high-profile give-and-takes, the fact is that billions in long-term spending are being taken out of the mix, especially affecting federal aid to state and local governments.

The CBO is dubious about monies unspent for Medicaid coverage, believing states which haven’t already come to the trough, won’t come. Amazing! Where does that come from?

Rogers reiterates that there is not much time left in this fiscal year, making the cuts seem less dramatic, and reminds that time-lags between appropriations cuts and immediate savings must be considered:

A $1.143 billion across-the-board cut in the budget deal yields just $688 million in outlay reductions before Sept. 30, according to CBO — an almost 2-1 ratio.

He also says it is more accurate to separate-out the annual Pentagon funding:

When this is done, the House bill in February can be seen as having truly proposed to cut more than $68 billion from largely domestic and foreign aid appropriations. The resulting 2011 outlay reduction forecast by CBO was about $18 billion — a roughly 4-1 ratio.

By comparison, the deal now cuts $42 billion from non-Pentagon accounts, but the outlay reduction is about $8.2 billion — a 5-1 ratio.

Let me know what you think. I understand that we wanted $100 million in cuts this year. That didn’t happen, so what do you think about these positives in the articles above.


  • BobF

    $325 million is chump change when it comes to the government. Saving $325 million and thinking your doing something to help the budget is like trying to bail out the Titanic with a tea cup.

  • BobF

    I meant $352 million.