The White House’s 2013 budget request is the first that has to follow the terms of last year’s debt-ceiling deal. That means it’s the first year that domestic discretionary spending — the money for agencies that Congress funds each year — gets strictly capped. So how does this shake out?
First, let’s define terms. “Non-defense discretionary spending” is a relatively small part of the budget, about 18 percent. It’s not Social Security. It’s not Medicare. It’s not the Pentagon. It’s not multiyear highway or farm bills. But it is just about everything else that gets set each year by Congress. The Veterans Health Administration. Medical research at the National Institutes for Health. Low-income housing assistance. And under last year’s Budget Control Act, it’s all getting squeezed. Two years ago, the White House predicted that such domestic spending would amount to $477 billion in FY 2013. After the debt-ceiling deal, the White House is asking for just $410 billion — a full 14 percent less. Which means, inevitably, there are winners and losers.
Harry Reid is aiming for a Senate vote this week on a $35 billion jobs bill that would help state and local governments rehire or retain teachers, first-responders, policemen, firefighters. Democrats claim that it will save some 400,000 jobs at a time when state and local budget cuts are forcing these public-sector layoffs. So how do things look for state budgets these days?