How to cut $100 Billion from Federal Government Spending?

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WASHINGTON — The incoming Republican majority in the House is moving to make good on its promise to cut $100 billion from domestic spending this year, a goal eagerly backed by conservatives but one carrying substantial political and economic risks.

House Republican leaders are so far not specifying which programs would bear the brunt of budget cutting, only what would escape it: spending for the military, domestic security and veterans.

The reductions that would be required in the remaining federal programs, including education and transportation, would be so deep — roughly 20 percent on average — that Senate Republicans have not joined the $100 billion pledge that House Republicans, led by the incoming speaker, Representative John A. Boehner, made to voters before November’s midterm elections.

Even if adopted by the House, the Republicans’ budget is unlikely to be enacted in anything like the scale they envision, since Democrats retain a majority in the Senate and President Obama could veto annual appropriations bills making the reductions.

But the effort is more than symbolic: in particular it could give House Republicans increased leverage in budget negotiations with the White House this winter and spring, when the administration must get Congress to raise the federal debt limit or risk a government financing crisis.

The budget-cutting exercise is perhaps the biggest test facing the House Republicans as they seek to remain united and to keep faith with Tea Party members, many of whom remain suspicious of the party’s willingness to vote for deep spending cuts.

But if Republicans vote for the size and range of required cuts in education, law enforcement, medical and scientific research, transportation and much more, it would give Democrats political ammunition to use against them in swing districts.

Such reductions are sure to draw protests from governors and local officials, including Republicans, who are counting on federal money to help balance their budgets. Many business and farm groups likewise would oppose cuts in their subsidies. And many economists would argue that immediate federal spending cuts of this size, especially on top of cuts and layoffs in the cities and states, would threaten the economy’s recovery and offset any stimulus from the tax cut deal Republicans and Mr. Obama reached just weeks ago.

Yet conservative analysts say even more spending cuts are desirable. Brian Riedl of the Heritage Foundation, a conservative research organization, has outlined a plan for $343 billion in reductions, including cuts from corporate tax breaks and entitlement programs that are not in the portion of the federal budget that House Republicans are focusing on, the so-called nonsecurity discretionary spending.

“The difficulty for Republicans is that they’re concentrating their cuts in a small sliver of the budget,” Mr. Riedl said. “They should also be addressing large entitlement programs, such as Medicare and Social Security, which are the main source of our budget problems. Cutting $100 billion from these other programs isn’t just a matter of eliminating waste, fraud and abuse. It will involve real cuts in real programs.”

Other Republicans are skeptical, as well.

“I just don’t know how, when you get down to it, they’re going to get agreement on that,” said G. William Hoagland, who for many years was the Republican staff director of the Senate Budget Committee.

The promise to cut $100 billion this fiscal year — in effect, taking government operations to 2008 levels — would mean cuts of more than 20 percent across the board from the $477 billion that Congress allocated for such programs in the 2010 fiscal year, which ended Sept. 30.

Such across-the-board cuts “would have very damaging implications for the long-term growth of the economy and the long-term future of our work force,” said Jacob J. Lew, Mr. Obama’s budget director. He is preparing the administration’s budget for the 2012 fiscal year, which would continue a three-year freeze of the same domestic spending at 2010 levels.

“If you look in areas like education, if it was applied across the board it would mean eight million students would have their Pell grants reduced by an average of $700,” Mr. Lew said. “You obviously could make policy not to do that, but then you’d have to save a lot of money somewhere else.”

A 20-percent cut also would mean 40,000 fewer teachers and school aides, he said, and big reductions in basic research, law enforcement and small business programs, among many others.

If the Republicans apply their promise literally, some programs would have to be scaled back even more because the government is already well into its fiscal year, so the cuts would have to be concentrated in a shorter period. The reductions would be about 30.6 percent, said James R. Horney, a former Congressional budget analyst who is now at the liberal-leaning Center on Budget and Policy Priorities.

“That would require very large layoffs or furloughs of federal employees,” Mr. Horney said, “as well as big reductions in grants to state and local governments and government purchases of goods and services — all of which would offset a good portion of the stimulus achieved in the tax compromise and threaten the recovery.”

In new rules that the House is expected to adopt when it convenes on Wednesday, Republicans will empower the incoming chairman of the House Budget Committee, Representative Paul D. Ryan of Wisconsin, to set limits for the various categories of domestic spending that are decided in the Appropriations Committee. That is more power than ever invested in a Budget Committee chief and a significant diminution in the appropriation panel’s traditional sway.

Initially, that would allow House Republicans to suggest what general areas the $100 billion would come from without identifying specific cuts.

“The reality of governing is different than the reality of campaigning, and it’s easier to throw out a number than it is to support it,” said David Axelrod, Mr. Obama’s senior strategist.

Looming over the budget fight is the battle over the debt limit. An increase in the debt limit is essential for the government to borrow to meet its obligations, but it is adamantly opposed by the Tea Party movement and other small-government conservatives.

While they complain that lifting the limit enables new spending, mostly it allows the government to cover existing commitments, including trillions of dollars run up when Republicans controlled Congress and the White House from 2001 to 2007.

Isn't there something in the preamble of United States Constitution which makes military spending a legitimate expense.

Powers of congress. Art I Sec 8.

ruveyn

Isn't there something in the preamble of United States Constitution which makes military spending a legitimate expense.

No. There is blabberjabber about the general welfare and not a word about the military in the preamble.

ruveyn

"provide for the common defense"

There is nothing wrong with defense spending. The problem is "offense" spending. We have like 700+ military bases in a 120+ countries. We spend like 700 billion dollars+ are year on our military and over 300 billion on foreign aid. That's more than the rest of the world combined. That has nothing to do with defense. That's empire building. We could defend this country with a few nuclear subs honestly. No country on earth is truly a threat to this country and if they were, we could pretty much vaporize them with in hours.

I was hopeful that there could be the political will to start making military cuts during this congress. Rand Paul and Mike Lee in the senate have both came out for it which was absolute blasphemy a few years ago, especially for a Republican to say. Now I dunno, I try to be optimistic but I fear that we're just gearing up for the next big war in Iran or North Korea or even Mexico.(an escalation of our secret wars in Yemen and Pakistan is another possibility)