House budget suggests future deep cuts in social spending

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House budget suggests future deep cuts in social spending

According to the Center on Budget and Policy Priorities, the budget plan approved by the House on March 21 calls for deep reductions in domestic programs, including both annually appropriated programs and entitlement, or "mandatory," programs. Focusing on the reductions in entitlement programs, a CBPP study finds that while the cuts generally start at one percent in fiscal year 2004, they grow deeper with each passing year. Over the ten-year period from 2004 through 2013, the entitlement reductions average four percent (excluding Social Security and other programs exempted from reductions).

The budget plan would require committees of Congress to write legislation, called a "reconciliation bill," that would enact these cuts into law in 2003. The cuts would remain in effect at least through 2013, unless a future Congress enacted another law overturning some or all of the cuts.

Of the $265 billion in entitlement cuts called for by the plan, about $225 billion would come either in three budget functions that provide assistance primarily to middle-class, low-income, elderly, and disabled people with the costs of health care, food, other necessities, and post-secondary education, in a fourth budget function that provides assistance to veterans, or in a fifth budget function that provides assistance to farmers.

In most cases, the center reports, the percentage reductions are deepest in 2010, "perhaps because the budget resolution as initially reported appeared to reach balance in that year." In the case of the health function, however, the cuts grow deeper with each passing year. (The appearance of balance at any time in the ten-year period the budget plan covers is almost certainly a mirage, according to the report, given that the House budget plan omits several costs that are certain to occur, such as the costs of war in Iraq and its aftermath, the costs of providing relief from the exploding Alternative Minimum Tax after 2005, and the costs of extending expiring tax credits such as the Research and Experimentation Credit that Congress always extends when they come up for renewal.)

Given the large dollar and percentage reductions that would be made in these programs, the notion that this amount of budget reduction can be squeezed out of "waste, fraud, and abuse" is not credible, according to the report. The funding reductions in appropriated non-defense programs would amount to about $200 billion over ten years under the plan, as compared to the funding levels for fiscal year 2003, adjusted only for inflation.

For more information:
PDF of full report
HTM of fact sheet

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