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The Ryan-Republican Budget: The Consequences Of Imbalance

Wed, 03/21/2012 - 2:45pm
The Associated Press

xfdad AD-IMBALANCE sked

REGULATORY INTELLIGENCE DATA BASE

March 21, 2012

DEPARTMENT OF THE US WHITE HOUSE

AGENCY GROUP 09

202-456-7100

INDSTRY GROUP 91

REGION GROUP 04

THE RYAN-REPUBLICAN BUDGET: THE CONSEQUENCES OF IMBALANCE

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Yesterday, House Republicans released their budget resolution for FY

2013. While many of the proposals require more analysis, one thing is

absolutely clear: this budget does not ask all Americans to do their

share to get our fiscal house in order and create an economy that is

built to last. Instead, the GOP plan gives those making over $1

million per year an average tax cut of at least $150,000 and preserves

tax breaks for oil and gas companies and hedge fund managers. These

tax breaks are then paid for by ending Medicare as we know it and

implementing deep cuts in what we need to grow our economy and create

jobs in years to come.

Others will go into deep detail on the tax and health proposals in the

budget resolution. I want to focus on funding known as "nondefense

discretionary spending." It deserves a better name. This is annual

funding that pays for many of the investments most critical to

expanding economic growth and opportunity, including education,

research and development, and clean energy.

With his strong focus on cutting waste and unneeded spending, the

President has already signed into law several rounds of cuts that will

bring non- security spending to its lowest level as a share of the

economy since Dwight Eisenhower was President. Put another way, we are

cutting this category of spending as a share of economy by 50 percent

from 2010 to 2022.

But when it comes to annual, non-defense spending, the House Budget

Resolution is not about cutting fat. It is cutting deep into the

muscle that America needs to compete and win in the 21st century.

On top of the roughly $1 trillion in cuts in the Budget Control Act,

it would be difficult to overstate the radicalism of the domestic cuts

proposed by the House budget resolution. In 2013, it would cut annual

non- defense funding by 5 percent. By 2014, the resolution would cut

this funding by 19 percent in purely nominal terms. Over a decade, the

resolution would cut over $1 trillion in non-defense spending on top

of the reductions the President has already signed into law. The cuts

in non- defense discretionary funding are nearly three times as deep

as the cuts under the so-called sequester - cuts that we and most

objective analysts have always regarded as an unwise and unacceptable.

What would it all mean? The Budget doesn't say. In fact, the Budget

resolution includes a magic asterisk - or, in more technical parlance,

an "allowance"- for $897 billion in unspecified cuts. But what could

the resolution mean? Since the House has refused to specify what

would be cut, we consider the impacts if the cuts are distributed

equally across the Budget. The result would be that:

* The Department of Education would be cut by more than $115 billion

over a decade. 9.6 million students would see their Pell Grants fall

by more than $1000 in 2014, and, over the next decade, over one

million students would lose support altogether. This would derail

bipartisan education reforms and deeply undermine K-12 education and

college opportunity.

* Clean energy programs would be cut by 19 percent over the next

decade, derailing efforts to put a million electric vehicles on the

road by 2015, retrofit residential homes to save energy and consumers

money, and make the commercial building sector 20 percent more

efficient by 2022.

* Investments in science, medical research, space, and technology

would be cut by more than $100 billion over the next decade. The

number of new grants from NIH for promising research projects would

shrink by more than 1,600 in 2014 and by over 16,000 over a decade,

potentially curtailing or slowing research to fight Alzheimer's

disease, cancer, and AIDS. The National Science Foundation would cut

over 11,000 grants over the next decade, eliminating support for over

13,000 researchers, students, and teachers in 2014 alone.

* Roughly two million slots in Head Start would be eliminated over the

next decade - cutting 200,000 children from the program in 2014 alone.

In significantly reducing investments in the future, the House budget

resolution also violates our obligations in the present. Presidents

of both parties have long committed to fully funding assistance

through the Women, Infants, and Children (WIC) program for pregnant

women, newborns, and young children so that they have access to

healthy food. If the cuts in this budget were distributed equally,

then about 1.8 million women, infants, and children would be off this

program in 2014. Similarly, by 2014 more than 400,000 low-income

families would lose critically important housing vouchers.

The resolution would also make it extraordinarily difficult for

government to do the basic business that people rightly expect of it.

Evenly allocated cuts would mean deep reductions in the Federal

Aviation Administration, leading to the elimination of air traffic

control services in parts of the country. In 2014, there will be more

than 4,500 fewer federal agents at the Department of Justice and the

FBI to combat violent crime, pursue financial crimes, help secure the

southwest border, and ensure national security, resulting in over

160,000 fewer criminal cases that can be prosecuted over the next

decade. Starting in 2014 and continuing thereafter, hundreds of

national parks would have to shut down for parts of the year. In

2014, more than 100,000 fewer workplace inspections to protect worker

safety would occur. Basic enforcement of clean air and water laws

would erode dramatically, with harmful effects on the health and

well-being of the American people. We would not meet basic standards

for food safety, putting the food we eat and serve our kids at risk.

And our ability to efficiently administer core programs like Medicare

and Social Security would be undermined; wait times would increase

dramatically.

Keep in mind: cuts of this magnitude are needed in order to give the

few Americans who make more than $1 million a year an average tax cut

of at least $150,000.

It doesn't have to be this way. We can cut the deficit and have an

economy built to last through balanced deficit reduction that asks all

Americans to shoulder their responsibility, cuts spending, and invests

in areas critical to job creation and growth. While we differ on the

specifics, this is the approach of the Bowles-Simpson Commission, the

Gang of the Six, and the President. We look forward to working with

those across the political spectrum who share this belief that we are

all in this together and all of us have a responsibility to do our

part.

Jeff Zients is the Acting Director of the Office of Management and

Budget.

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