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Many agencies targeted for steep cuts in 2012

Jun. 5, 2011 - 06:00AM   |  
By SEAN REILLY   |   Comments
"Many of these [2012 budget] cuts will not win any popularity contests," said Appropriations Committee Chairman Rep. Hal Rogers, R-Ky., above.
"Many of these [2012 budget] cuts will not win any popularity contests," said Appropriations Committee Chairman Rep. Hal Rogers, R-Ky., above. (Staff file photo)

Agriculture Department funding would be slashed by double digits. Ditto for the State Department. Even military construction projects, usually cherished on Capitol Hill, would not be spared.

That's what agencies are looking at in the first round of congressional jockeying over the shape of their 2012 budgets. Under a House Appropriations Committee blueprint, overall discretionary spending would be pared by about $30 billion, or 3 percent below this year's levels. But some departments would have to absorb much steeper reductions.

Under legislation approved by the committee last week, for example, the Agriculture Department spending bill would be cut by 13 percent. The Labor, Education and Health and Human Services departments face a cumulative 12 percent cut. Hardest hit would be the State Department and foreign operations, where core spending would nosedive 18 percent.

The House committee document is only the kickoff to months of haggling between the Republican-run House, the Democrat-controlled Senate and the Obama administration. Even if the cuts don't turn out to be as punishing as first advertised, agencies have to recognize that tough times are here to stay, former Comptroller General David Walker said in a phone interview last week.

"This is a new day, a new ballgame," said Walker, who now heads Comeback America, an advocacy group for fiscal responsibility "There will be continuing pressure to hold spending down."

In one stark example of how unusual this year's budget environment is, the president's 2012 budget request unveiled only four months ago is already considered dead by virtually everyone, including Democrats. Last month, the Senate rejected it on a 97-0 procedural vote.

Some agencies are getting the message.

During the last decade, Education Department spending more than doubled to $79.4 billion, according to Office of Management and Budget figures. "We've had huge, huge budget growth," acting Chief Financial Officer Thomas Skelly said in a recent interview. In general, he said, the added money went not for administrative costs, which remained around 1 percent of the department's program budget, but for college Pell Grants, funding for schools in poor areas, and education of disabled children.

But in this year's budget, belatedly approved in April, lawmakers eliminated funding for 30 out of some 150 programs, Skelly said. And he expects the increased scrutiny to continue.

A few agencies would buck the downward trend. The Defense Department's base budget would climb to $530.0 billion, a 3 percent increase over last year, while the Veterans Affairs Department's budget would rise 5 percent to $180.3 billion.

GOP lawmakers say they have no choice in the face of federal budget deficits running at more than $1 trillion per year. "Many of these cuts will not win any popularity contests," Appropriations Committee Chairman Rep. Hal Rogers, R-Ky., said recently, adding that they are "imperative to overcoming our unparalleled fiscal crisis."

Critics said they suspect that lawmakers are in some cases using the government's financial plight as a pretext for other agendas.

Barbara Roper, director of investor protection at the Consumer Federation of America, points to proposed cuts at the Commodity Futures Trading Commission as an example.

Under last year's financial overhaul, Congress handed the commission responsibility for regulating an over-the-counter derivatives market worth roughly $300 trillion. In his 2012 budget request, President Obama proposed giving the commission an increase of more than 50 percent over this year's $202.3 million level.

Instead, as part of the Agriculture spending bill approved last week, the House Appropriations Committee signed off on a cut to $171.9 million. That amount gives the commission the "necessary resources" to fulfill its duties, Rep. Jack Kingston, R-Ga., chairman of the Appropriations Agriculture subcommittee, said in a statement.

Roper scoffed at that claim. The proposed cut is intended to "defang" the commission and keep it from carrying out its new mission, she said. Given that the financial crisis of several years ago is one factor in the government's budget woes, she said, "it's beyond irresponsible."

Another major wrinkle in budget talks is the fact that the scope of government spending has become entangled in negotiations over raising the nation's $14.3 trillion debt ceiling. If no deal is reached by early August, the result will be an unprecedented and potentially catastrophic government default, according to Treasury Secretary Timothy Geithner.

For their support to raise the debt ceiling, however, House Republicans are demanding action on spending, and some Democrats are going along. Last week, on a 318-97 bipartisan vote, the House squelched a bill that would have raised the debt limit by $2.4 trillion with no accompanying funding cuts. Closed-door talks with congressional leaders, led by Vice President Joe Biden, have shown little progress.

"It's going to be a long summer," said Christopher Hellman, senior policy analyst at the National Priorities Project, a nonpartisan group that follows budget issues. "You're seeing the same battles fought now, as in the '80s when government went through its last bout of austerity."

For Hellman, a former congressional staffer, the call to arms is familiar in another way: The primary target is domestic spending. The Agriculture spending bill, for example, would chop hundreds of millions of dollars in food assistance for women and children.

Nonetheless, the biggest potential loser remains the State Department and foreign aid programs, whose budget would fall from $48.2 billion to $39.6 billion. Although that loss would be partially offset by extra money for contingency operations in Iraq, Afghanistan and Pakistan, the cuts would nonetheless be tough to manage, said Susan Johnson, president of the American Foreign Service Association, the union representing Foreign Service officers.

"I guess it boils down to whether or not people see diplomacy and development as part of our national security tool kit," she said. "Apparently, still, many people do not."

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