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Federal funding

The CBPP looks at spending levels for next year. Bottom line: compared to 2002, defense and homeland security spending up, other domestic programs will either be reduced (President / House) or hold steady (Senate).

Will Congress Reduce Funding for Domestic Programs Outside Homeland Security?, 9/30/02
When Congress adjourns this fall, it will pass a long-term “continuing resolution” funding all annually appropriated programs unless the logjam holding up appropriations unexpectedly breaks and Congress enacts the 13 regular appropriations bills. Either in fashioning this continuing resolution or later, when it approves the final appropriations bills, Congress will have to resolve a major dispute over the level of funding to provide for these programs.
Earlier this year, the House of Representatives approved a budget plan to limit funding for annually appropriated programs to $759 billion in the coming fiscal year, 2003. The Senate Budget Committee passed a budget plan setting the limit at $768 billion, and the Senate Appropriations Committee on a bipartisan basis agreed to adopt the $768 billion limit in writing appropriations bills this year. (Some 59 Senators also voted in favor of the $768 billion limit in a vote in June.) In recent months, major political conflict has developed over whether to set overall appropriations for 2003 at the $759 billion level or the $768 billion level. This analysis examines these figures and finds the following.

More from the report:

* The House and the Senate appear to agree with the President that funding in 2003 for defense, homeland security, and international affairs should be increased by $42 billion beyond the Congressional Budget Office baseline — that is, by $42 billion beyond the amount needed to maintain this part of the budget at its 2002 level, adjusted for inflation. The disagreement is about the level of 2003 appropriations for domestic programs outside homeland security.
* The President and the House are proposing to reduce domestic funding outside of homeland security, while the Senate Budget Committee plan would essentially maintain domestic funding at current levels rather than increasing it significantly. As Table 1 indicates, the President would reduce 2003 funding for these programs by $14 billion below the 2002 level adjusted for inflation (i.e., below the CBO baseline). The House would reduce funding for these programs $9 billion below this level, while the Senate would set funding for these programs $1 billion — or four-tenths of one percent — above the 2002 level adjusted for inflation. (The Senate level would be slightly below the 2002 level on a real per-capita basis — i.e., after adjustment for inflation and increases in the size of the U.S. population — which is a measure some analysts favor.)
* Because the President and the House would reduce domestic appropriations outside of homeland security while the Senate would essentially maintain rather than significantly increase these appropriations, it would be a mistake to characterize the dispute over funding levels for these programs as a struggle whose outcome will determine whether a domestic “spending explosion” is averted. It also would be a mistake to assume that the dispute over domestic appropriations levels constitutes the critical struggle on Capitol Hill that will determine whether fiscal discipline is maintained.
* Furthermore, if the fiscal year 2003 funding levels for appropriated programs are said to pose risks of a spending explosion, that spending explosion would occur in defense and homeland security rather than in domestic programs. It is true that total expenditures for “discretionary” (or non-entitlement) programs — the programs whose funding levels are determined annually in the appropriations process — would swell substantially over the coming decade if funding levels for defense and homeland security continued to grow throughout the decade at the same rate that defense and homeland security funding is expected to grow in 2003. But funding for defense and homeland security is not expected to grow throughout the decade at such a rapid rate; no budget, including the President’s, proposes a rate of growth of this magnitude for defense and homeland security after 2003.


Filed under: Economics, Policy, Politics



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