Analysis of the FY 2011 Federal Budget Agreement

April 18, 2011

By Jo Comerford

[Today is Tax Day. It seems appropriate for Americans to know what their government is using their money for. Here is a comprehensive summary. – Editor]

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Cuts for Everything Except the Military

Six months after the start of the current fiscal year (FY2011), congressional leaders and President Obama have reached agreement on a budget for the second half of the year. In all the deal provides just over $1 trillion in spending over the last six months of the year, a cut of roughly $40 billion from FY2010 levels.

The cuts focus largely on the “non-security” portion of the federal discretionary budget, while leaving the “security” portion virtually untouched, and providing “real” (inflation-adjusted) growth for the Pentagon’s annual “base” budget of roughly 1%. So called “non-security” funding includes spending on education, food, and housing-related programs, etc. – while “security” includes military, nuclear weapons, homeland security, and veterans’ affairs.

Non-security spending is cut an average of 10%, with all non-security programs subjected to a 0.2% “across the board” cut. Some programs, like the President’s proposed expansion of high speed rail, the Corporation for Public Broadcasting, and federal assistance programs to state and local law enforcement, experience much larger cuts.

For NPP’s full analysis of the FY2011 budget agreement, see below.

Hard Times Will Get Worse

Other important events related to the federal budget will be happening soon including the release of a major proposal by President Obama focused on a long-term plan to address our nation’s annual deficits and the federal debt.

Congress is already beginning to focus its attention on the spending plan for FY2012. For additional information, see NPP’s recently-released analysis of the FY2012 budget plan issued by House Budget Committee Chairman Paul Ryan (R-WI). We will also analyze the Congressional Progressive Caucus’s budget alternative being briefed today.

We invite you to follow these events with us through NPP’s “Budget Matters” blog and our Facebook page.

Jo Comerford is Executive Director of the National Priorities Projectwhich makes complex federal budget information transparent and accessible so people can prioritize and influence how their tax dollars are spent. You can contact her at (413) 584-9556 or jo@nationalpriorities.org.

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Analysis of the Fiscal Year 2011 Budget Agreement

By The National Priorities Project

Quite literally at the 11th hour on Friday, April 8, narrowly averting a government shutdown, Democratic and Republican congressional leaders and President Obama reached agreement on a spending bill that will fund the federal government for the last six months of Fiscal Year (FY) 2011, which ends on September 30, 2011. The agreement is actually two bills – a seven day Continuing Resolution to allow time for the last minute work needed to enact the full spending package, and a Continuing Resolution (CR) that funds government, unless otherwise specified, at FY2010 levels for the remainder of FY2011.

Overview

The package includes $1.049 trillion in funding, a nearly $40 billion reduction from Fiscal Year 2010 levels. This includes $12 billion in reductions contained in previous continuing resolutions, as well as nearly $28 billion in additional new spending cuts.

The package also includes funding for the Department of Defense and the wars in Iraq and Afghanistan for FY2011. At $513 billion, the Pentagon’s annual “base” budget (not including the $158 billion for Iraq and Afghanistan) will experience 1% real growth.

The agreement is being described as cutting only 1% of federal spending in FY2011. The cuts, however, focus largely on non-security discretionary spending, which represents approximately 12% of the total federal budget, or roughly $420 billion in FY2010. In light of this, it is important to note that the resulting cuts will have a disproportionately negative impact on the “non-security” discretionary budget, which includes funding for education, food, housing, etc.

NPP recently released its analysis of the FY2012 budget plan issued by House Budget Committee Chairman Paul Ryan (R-WI). The plan cuts $6.2 trillion in spending over the next decade as compared to the budget projections released with President Obama’s proposed budget for FY2012.

NPP’s analysis looks at the proposed cuts in FY2012, long-term funding, deficit projections and significant proposed policy shifts for major federal programs like Social Security and Medicare.

FY2011 Funding by Appropriation Subcommittee and Selected Programs

NOTE: The non-security funding levels shown do not include a 0.2% “across the board” cut included in the legislation that applies to all non-defense programs, projects, and accounts.

Agriculture – Funds Agriculture programs at $20 billion, $3 billion below FY2010 levels and $3.2 billion below the FY2011 request.

This includes funding of $6.75 billion for the Special Supplemental Feeding Program for Women, Infants and Children (WIC), which supplies nutritious foods and health education to low-income pregnant women and children up to five years of age. This is a cut of $504 million below FY2010 levels, or roughly 7%.

Commerce, Justice, Science – Funds Commerce, Justice, and Science programs at $53.4 billion, $10.9 billion (17%) below FY2010 levels and $7.1 billion (12%) below the FY2011 request. The plan cuts State and Local Law Enforcement Assistance $415 million (24%) from FY2010 levels. It reduces National Science Foundation (NSF) research funding by $43 million (1%) in FY2010, and eliminates a proposed $400 million increase for NSF in FY2011.

Defense – Funds the Department of Defense annual “base” budget at $513 billion, approximately $5 billion above FY2010 levels (1% real growth) and $2 billion below the FY2011 request. The bill also includes an additional $157.8 billion for “Overseas Contingency Operations” to fund ongoing military operations in Iraq and Afghanistan. The Pentagon’s base budget continues to grow, albeit at a slower pace than in recent years.

Energy and Water – Funds Energy and Water programs at $31.8 billion, $1.7 billion (5%) below FY2010 levels and $3.6 billion (10%) below the FY2011 request. The plan cuts funding for Energy Efficiency and Renewable Energy by $438 million (roughly 20%) from FY2010, and cuts Defense Environmental Clean-up $638 million (11%).

Financial Services – Funds Financial Services and General Government programs at $22 billion, $2.4 billion (10%) below FY2010 levels and $3.4 billion (14%) below the FY2011 request. This includes operations of the U.S. Treasury, the Government Services Administration (GSA) and certain parts of Washington D.C. government.

Homeland Security – Funds the Department of Homeland Security at $41.8 billion in discretionary funding, $784 million (2%) below FY2010 levels and $1.9 billion (4%) below FY2011 request. Transportation Safety Administration (TSA) Aviation Security rises just under 1% from FY2010, but the package eliminates a proposed $330 million increase in FY2011. First Responder Grants for the Federal Emergency Management Agency (FEMA) are cut $786 million from FY2010 levels.

Interior – Funds Interior and Environment programs at $29.6 billion in discretionary funding, $2.6 billion (8%) below FY2010 levels, and $2.8 billion (8.5%) below the FY2011 request. The Fish and Wildlife Service and the National Parks Service are cut 4.7% ($141 million) and 4% ($127 million) respectively, and the National Endowments for the Arts and the Humanities are each cut $13 million (8%) below FY2010 levels. The Environmental Protection Agency (EPA) is cut $1.6 billion (16%) below FY2010 levels.

Labor, Health & Human Services, Education and Related Agencies – Funds Labor, HHS, Education and Related Agencies programs at $157.7 billion, $5.5 billion (3.4%) below FY2010 levels and $13 billion (7.6%) below the FY2011 request.

The bill funds the Pell Grant program – which provides tuition assistance for low-income undergraduate (and certain graduate) students – at the current maximum award level of $4,860. The Administration had proposed increasing the maximum award to $5,500.

The Low Income Home Energy Assistance Program (LIHEAP) which provides home heating assistance to low-income households, is cut 8% below FY2010 levels, a reduction of $390 million. Funding for the Corporation for Public Broadcasting is cut $80 million (16%) from FY2010 levels.

The plan reduces funding for Title X – a federal grant program that provides comprehensive family planning and related preventive health services, with priority given to persons from low-income families – to FY2008 levels, a cut of $17 million from FY2010.

Legislative Branch – Funding for Legislative Branch programs that support the operations of the U.S. Congress is reduced $103 million from FY2010 levels.

Military Construction/Veterans Affairs – Funds Military Construction/Veterans Affairs programs at $76.6 billion in discretionary funding, $600 million above FY2010 levels and $3.4 billion above the FY2011 request. Includes an increase of $13.8 billion for the VA over FY2010 and cuts Military Construction accounts approximately $10 billion from FY2010 levels.

State and Foreign Operations – Funds State Department and Foreign Operations programs at $48.3 billion, $504 million below FY2010 and $8.4 billion below the FY2011 request. This includes a $377 million cut to U.S. contributions to the United Nations and international organizations from FY2010 levels and $304 million below the FY2011 request. Funding for the Peace Corps is reduced 6% ($25 million) from FY2010 levels.

Transportation, Housing and Urban Development – Funds Transportation, Housing, Urban Development and Related Agencies programs at $55.5 billion, $12.3 billion (18%) below FY2010 levels and $13.2 billion (20%) below the FY2011 request.

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 FY2010 levels. The Community Development Fund was reduced $942 million (26%) from FY2010 levels. Φ

From http://nationalpriorities.org/publications/2011/analysis-fiscal-year-2011-budget-agreement/

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