Budget deal: Cuts of $38 billion include accounting gimmicks, target Obama priorities


Although pain from cuts that lawmakers agreed to last week in would be felt across virtually the entire government, Republicans were able to focus the sharpest cuts on areas they have long targeted. (J. Scott Applewhite/AP)

More than half of the $38 billion in spending cuts that lawmakers agreed to last week in the 2011 budget compromise that averted a government shutdown would hit education, labor and health programs.

Funding for federal Pell grants, job training and a children’s health-care initiative would face cuts, senior congressional aides said. A multitude of other programs — from highway and high-speed rail projects to rural development initiatives — also would experience significant reductions.

But some of the worst-sounding trims are not quite what they seem, and officials said they would not necessarily result in lost jobs or service cutbacks. In several cases, what look like large reductions are actually accounting gimmicks.

The legislation includes $4.9 billion from the Justice Department’s Crime Victims Fund, for instance, but that money is in a reserve fund that wasn’t going to be spent this year. Crime victims would receive no less money than they did before the deal.

The bill contains some policy provisions, including language preventing Guantanamo Bay detainees from being transferred into the United States for any purpose. And it eliminates funding for four Obama administration “czars”: the “health care czar,” “climate change czar,” “car czar” and “urban affairs czar.” But those positions are already vacant, and Democrats beat back a GOP effort to defund other “czar” positions.

Republicans were able to terminate more than 55 programs in the areas of health, labor and education, resulting in a total savings of more than $1 billion. In addition, a minor component of President Obama’s health-care law — the Consumer Operated and Oriented Plan — will be eliminated, and another, the Free Choice Voucher program, will be scaled back.

The bill would cut U.S. contributions to the United Nations and international organizations by $377 million, and to international banks and financial institutions by $130 million. It also would prohibit pay raises for foreign service officers, although other federal employees would not be affected.

The Washington region would be spared from potentially painful cuts to the Metro system, as the budget measure would fully fund the federal government’s $150 million share of the agency’s budget, congressional sources said.

But District officials are livid about some policy provisions attached to the bill, particularly one that would ban federal and local funding for abortion. Mayor Vincent C. Gray (D) and several members of the D.C. Council led a rally Monday on Capitol Hill to protest those provisions and were arrested.

The full extent of the cuts did not become clear until Tuesday morning, after congressional aides worked all weekend and all day Monday to shape a detailed spending plan based on the framework that Obama and congressional leaders agreed to Friday. Budget aides tallied cuts into the evening Monday, racing to prepare a bill that was introduced in the House.

(A summary of the cuts provided by the House Appropriations Committee is available here, and a detailed list of program cuts is here.)

Of the $38 billion in overall reductions in the budget that funds the government for the rest of the fiscal year, about $20 billion would come from domestic discretionary programs, while $17.8 billion would be cut from mandatory programs. The latter cuts, known as “ChIMPS,” affect permanent programs protected by law. The money they lose this year could be put back in their budgets next year.

House Appropriations Committee Chairman Hal Rogers (R-Ky.) hailed the historic nature of the spending cuts in a statement Tuesday morning.

“My committee went line-by-line through agency budgets this weekend to negotiate and craft deep but responsible reductions in virtually all areas of government,” Rogers said. “Our bill targets wasteful and duplicative spending, makes strides to rein in out-of-control federal bureaucracies and will help bring our nation one step closer to eliminating our job-crushing level of debt.”

Although the pain would be felt across virtually the entire government — the deal includes a $1 billion across-the-board cut shared among all non-defense agencies — Republicans were able to focus the sharpest cuts on areas they have long targeted. The Education, Labor, and Health and Human Services departments, which represent about 28 percent of non-defense discretionary spending, face as much as a combined $19.8 billion, or 52 percent, of the total reductions in the plan.

In addition, the Environmental Protection Agency, long a target of conservatives, will see a $1.6 billion cut, representing a 16 percent decrease from 2010 levels. At the Department of the Interior, affected agencies include the Fish and Wildlife Services ($141 million cut from last year), the National Park Service ($127 million cut from last year) and “clean and drinking water state revolving funds” ($997 million cut from last year).

Democrats were able to beat back the most severe cuts originally proposed by House Republicans and protect funding for some cherished programs, such as Head Start, AmeriCorps and the implementation of the new health-care and food safety laws.

“Race to the Top,” Obama’s signature education reform initiative, will receive an additional $700 million in funding. In addition, the Securities and Exchange Commission received a $74 million increase from 2010 levels, which will help fund new securities enforcement measures.

But Democrats agreed to key concessions in important areas and were not able to reduce military spending.

White House press secretary Jay Carney said Monday that the deal demonstrates “a commitment to making tough choices that are not the kinds of choices in an ideal world the president would want to make or that Democrats would want to make.”

Less-painful cuts

Some of the cuts may have only a limited effect on people’s daily lives. The Crime Victims Fund provides money — for counseling and other services — that comes from fees levied on criminals, according to U.S. officials and victims’ advocates. By law, all the money collected must be spent on victims. But Congress has limited the amount that can be spent each year, allowing excess money to grow in a reserve account. Those savings constitute the $4.9 billion listed as a cut, advocates and officials said.

“It would be a disaster for crime victims if this were really a cut,” said Susan Howley, director for public policy at the National Center for Victims of Crime.

The bill includes savings of nearly $500 million on the federal Pell grant program, which aids low-income college students. But those savings are reflected in an administration plan already underway to limit grants to the academic year to preserve the maximum grant amount of $5,550.

The year-round component “was costing more money than was originally anticipated and was not having a noticeable effect” on completion rates, Education Department spokesman Justin Hamilton said.

Another cut, $3.5 billion for the Children’s Health Insurance Program, would affect only rewards for states that make an extra effort to enroll children. But officials with knowledge of the budget deal said that most states were unlikely to qualify for the bonuses and that sufficient money would be available for those that did.

And about $2.2 billion would be cut from the COOPS program, a provision of the new health-care law that subsidizes loans to civic and community groups that come together to create health insurance cooperatives. This represents more than one-third of the program’s $6 billion budget.

‘We’re on a battleship’

Most lawmakers will not discuss the specifics of the spending cuts until a final analysis is revealed. But Rep. George Miller (Calif.), the ranking Democrat on the House Education and the Workforce Committee, issued a statement after the deal was announced Friday saying that he “had concerns.”

“Poor and middle-class families have already received more than their fair share of pain in this economy while the wealthy and special interests have paid no price,” he said.

The House and the Senate plan to vote on the budget bill this week. Some conservative lawmakers have said they will not support it. Many freshmen House Republicans — who had resisted backing down from the GOP proposal of $61 billion in cuts — said they will remain undecided until they have a chance to read the measure.

“I’m not sure that this agreement will look quite as good under the light of day,” said freshman Rep. Bill Huizenga (Mich.). “We’re on a battleship. The wheel has been turned. And I understand that. I get that. I just want to make sure that we’ve turned the wheel all the way.”

It remains unclear how deep a conservative backlash might be — 54 House Republicans voted against a short-term spending bill earlier this year, many arguing that it did not contain deep enough cuts. Privately, though, Republican leadership aides said the legislation would almost certainly pass when it comes to the House floor on Wednesday.

Across the Capitol, Sen. Rand Paul (R-Ky.), a freshman tea party adherent, issued an open letter to fellow senators saying he would vote against the bill because it is “simply not credible or serious.”

“Think about it another way before you vote: The entire budget cut [skims] 3 percent off the top of our historic $1.65 trillion deficit. That means the side of Big Government got 97 percent of what they want,” Paul wrote. “I prefer to be on the other side. The side of the people who sent us here to Washington to do something. To cut spending.”

The legislation is not expected to include funding for an alternative engine for the Joint Strike Fighter program, according to a source with knowledge of the decision. The Ohio district of House Speaker John A. Boehner (R) stands to gain from the costly and controversial defense project.

The budget bill also will not include the more controversial policy provisions, or “riders.” Republican efforts to defund Planned Parenthood and peel back environmental regulations led to a stalemate last week.

Other policy riders kept out of the final bill include efforts to prevent regulation of the for-profit college industry and to defund Obama’s health-care law and National Public Radio. But the bill does include provisions that would limit NASA’s cooperation with China and that would remove wolves from the endangered species list in Montana, something Sen. Jon Tester (D-Mont.) had been seeking.

The deal also includes several other concessions Republicans sought. It guarantees that the Senate will debate and vote on repealing Obama’s health-care law and ending federal funding to Planned Parenthood. That’s designed to force politically vulnerable lawmakers to vote on the hot-button issues. The legislation also would block a funding increase, sought by the administration, for the Internal Revenue Service to hire additional agents to enforce the administration’s agenda on a range of issues.

Staff writers Ben Pershing, N.C. Aizenman, Daniel de Vise, David A. Fahrenthold, Jerry Markon and Lisa Rein and staff researcher Lucy Shackelford contributed to this report.

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