In a previous blog post, my colleague Andrew noted the encouraging revenue targets in Senate Budget Committee Chairman Patty Murray’s (D-WA) Senate Democratic FY2014 budget resolution—revenue that would partially replace sequestration and minimize the per dollar drag of total deficit reduction. But unfortunately the budget, like many others before it, strives to hit stringent deficit reduction targets and in the process ends up having an adverse impact on the economy and job growth by 2014 relative to current policy. This focus on deficit reduction targets likely led to another unfortunate aspect of the Murray budget: its surprisingly large cuts to non-defense discretionary (NDD) programs.
The NDD budget is vitally important to the country, and includes security funding for areas like homeland security, veterans’ affairs, nuclear weapons and foreign operations; safety net programs including housing vouchers and nutrition assistance for women and infants; most funding for the enforcement of consumer protection, environmental protection and financial regulation; and practically all of the federal government’s civilian public investments, such as infrastructure, education, training, and research and development.
Unfortunately, it is already set on a downward trajectory from modest funding levels. The figure below shows historical NDD funding (budget authority) as a share of GDP and projected funding assuming sequestration remains in effect (i.e., under the current law baseline). This would result in NDD funding levels lower than at any point since the 1970’s, and likely since before the early 1960’s.1
The figure below shows projected funding for NDD as a share of GDP. Absent the BCA caps that were put in place in 2011 (a result of the debt ceiling crisis), the Congressional Budget Office would project NDD funding as growing with inflation from a 2013 base—that’s the dotted blue line. The dotted red line is NDD funding established by the BCA caps. And the dotted green line is NDD funding after the sequestration cuts. All are sloping downward because the funding levels are measured as a share of GDP and none of the funding paths keep up with projected economic growth.
The Murray budget’s NDD funding level—the purple line—starts above all of the baselines, but quickly falls below the BCA caps. The budget would finance an immediate, moderately sized stimulus package that consists largely of transportation, water, and technology infrastructure. Consequently, the NDD budget in fiscal year 2013 is nearly a quarter higher than under current law. And funding levels in fiscal 2014 match the Budget Control Act (BCA) discretionary cap levels. However, the Murray budget would cut the NDD budget to below the budget caps beyond fiscal 2014, and by fiscal 2023 it calls for NDD funding roughly equivalent to the current law baseline with sequestration in place.
Granted, this funding trajectory is far preferable to the Ryan budget, which cuts more than ten percent below the sequestration funding level throughout the budget window. But it is still disappointing that a Democratic budget keeps so much of the BCA’s onus of long-term deficit reduction on the NDD budget. The entire point of deficit reduction is improving future living standards, but defunding the NDD budget will do just the opposite—contributing to job losses, poorly enforced regulations, a dirtier environment, inadequate infrastructure, and a less-educated workforce.
1. Only outlay data is available between 1962 and 1976, but they suggest that budget authority never fell below roughly 3.4 percent of GDP.