The final details of the agreement will be developed in the coming days. Below, you will find a detailed outline of what we have learned from Capitol Hill decision-makers.
The legislation is not likely to contain project specific earmarks. However, we have been told earmarks that were included in the un-passed omnibus bill will be honored by the administration. We will work with the requesting Member offices and appropriate agencies to secure the FY2011 funding.
What are the specifics of the deal? The budget authority agreed to is just over $1.05 trillion. This number reflects the total funding for the remainder of FY2011. There are a number of “savings” in the budget that you may hear about over the next few days. For instance:
- The agreement produces $73 billion in total savings. This is not really an accurate figure. The $73 billion is a hypothetical number that in fact represents a reduction in what the budget would have been if President Obama’s budget proposal of February 2010 had been passed.
- $39 billion in total reductions. This number is the difference between the FY2010 Appropriations Act approved in 2010 and what the actual funding totals will be as approved in the deal. However, within this reduction – considered historic – is a significant amount of smoke. For instance:
- $17 billion in reductions don’t involve cuts to any agency operating accounts. They involve cuts to so-called mandatory programs whose budgets run mostly on autopilot. Such cuts officially are “scored” as savings so the funds may be spent elsewhere. So this reduction has little impact in terms of cutting the deficit. Specifically,
1. $2.5 billion in leftover highway money unavailable under current budget caps;
2. $500 million from Pell Grant reforms;
3. $3.5 billion in unused Children’s Health Insurance Program funds;
4. $5 billion in “phantom” savings from capping payments from a DOJ trust fund for crime victims. Under arcane budget rules, appropriators can claim year after year the full amount of money in the trust fund;
5. $400 million in similar savings from capping a Treasury fund to help pay for the department’s crime-fighting efforts;
6. $2.2 billion subsidies cut for health care cooperatives; and
7. It is important to remember that these are presumed savings, but it is uncertain whether they will ever truly be realized.
3. $21 billion comes from hard target reductions. Specifically,
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- $630 million in so-called “orphaned” earmarks for Members of Congress that are either retired or not running for office again.
- Reductions to the DOJ were significant, some claim as high as $6 billion;
- Other cuts included reductions within Health Care and Financial Services Regulatory capacities, perhaps as high as $8 billion;
- The final $2 billion comes from a complex, across-the-board cut, that Senate Democrats had required in order to reach the final reduction figure.
- $8 billion was also cut from The State Department and Foreign Operations Accounts.
4. The figure also takes into account the reductions already achieved through the previous Continuing Resolutions (CRs).
There were a number of areas either not affected or enhanced. They include:
- Funding for Head-Start, DC School vouchers and the Race to the Top education program were all saved from any cuts within this agreement.
- According to the White House, they have sufficient savings available to maintain the Pell Grant maximum award and the broad education reform agenda, including K-12 education;
- DoD actually will realize a $4 billion increase in funding over the current FY2011 Budget.
The cuts in this historic agreement actually amount to a 2 percent reduction in total spending. To date, the agreement has received general support and is likely to be approved by both the House and Senate later in the week.
We will continue to keep your informed as events unfold.
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