The prospect of cutting Medicare benefits in a "fiscal cliff" deal has prompted an outcry from concerned liberals. But whether or not legislators actually end up raising the Medicare age or paring back Social Security payments, domestic benefits and services—ranging from veterans' health care and low-income housing to Head Start programs—are going to get squeezed over the next 10 years.
Last year's debt-ceiling agreement included $1.5 trillion in cuts to discretionary programs through 10-year spending caps that are already in effect. According to a new analysis by the Center on Budget and Policy Priorities, the domestic programs subject to the spending caps will face a $615 billion shortfall if they keep their benefits and services at 2012 levels. If such, they'll be forced to scale back unless Congress decides otherwise—and right now, the Republicans want even less money spent on these domestic programs, not more.
The Center on Budget and Policy Priorities's Richard Kogan breaks down the impact of the new spending caps:
We estimate that, with the funds available under the caps, the federal government will fall about $350 billion short over the next ten years of delivering the same level of benefits and services for NDD programs as it did in 2012. This is because: (1) the costs of a number of key programs, especially VA medical care, are projected to grow substantially, and (2) Congress relied on certain temporary savings measures to meet the 2012 caps that it cannot repeat in the future. Furthermore, it would take an additional $265 billion over the next ten years to account for general population growth, which affects NDD programs ranging from Head Start to home-delivered meals for the elderly. In total, it would require $615 billion above what the caps allow to maintain the same level of benefits and servicesper person as in 2012.
It's a good reminder of the trade-offs that we have already made in the name of deficit reduction, which have received little attention amid the hand-wringing over the fiscal cliff. And, as Kogan points out, these domestic programs still remain vulnerable to further cutting. House Speaker Boehner (R-Ohio) has already proposed $300 billion in further cuts to discretionary programs, though he hasn't specified how they'd be carried out. And unlike the defense programs that face big cuts, these domestic programs don't have deep-pocketed industry lobbyists to help shield them.