Whichever Debt Deal We Get, Our Government Is Getting Cleavered

Not too many people long for a return to 1962. But as Congress and the president debate how much government Republicans should get to lop off in exchange for not causing a US debt default, the most prominent plans in play all take our non-security appropriations back to the "Leave It to Beaver" era – or earlier.

A new study by the Economic Policy Institute (EPI) shows that over the next 10 years, the House Republican budget plan, the Bowles-Simpson plan, and both budget frameworks presented by President Obama all bring down non-security discretionary (NSD) spending as a percentage of GDP lower than it’s been in half a century. Such a drop, the report warns, “would cripple basic government functions and fail the needs of a growing population.” The report also shows that the majority of such spending goes to some form of public investment: education, infrastructure or research and development.

Reached by phone, the EPI economist who authored the report, Ethan Pollack, said, “We don’t just pass debt on to our kids. We pass on roads and bridges…we pass on knowledge capital and technological know-how. If we are cutting spending and thus decreasing financial debt, we could also be increasing another type of debt, an investment debt, because we’ll be passing on less of these other kinds of things.”

The things Pollack is talking about all fall under the NSD area of the federal budget. Discretionary spending is the portion that has to be appropriated each year, rather than being paid out automatically like Social Security, Medicare, or Medicaid. Non-security discretionary spending refers to what’s left after also leaving out military- and security-related programs like the armed services, the Homeland Security department, or veterans’ benefits (regardless of how some military programs actually affect our security).

As EPI notes, NSD represents only 15 percent of the federal budget and 14 percent of the past decade’s rise in federal outlays (adjusted for inflation). Pollack says NSD spending is a “black box,” in that “nobody knows who’s going to get hurt” when it gets cut. That makes it the area of the budget likely to face the deepest cuts.

If Paul Ryan’s House Republican budget plan were enacted, EPI projects that NSD spending would go down 57.6 percent over the next decade as a percentage of GDP. More troubling is that even under the original budget Obama sent Congress, it would go down 36.3 percent. Under the Bowles-Simpson plan, which is reportedly a basis for current “Gang of Six” talks, it would go down 41.7 percent.

For all the drama of the partisan debate over the debt, all the major players are committed (whether out of ideology or perceived political necessity) to a future in which discretionary non-security spending by the government plays a smaller role in the American economy. They aren’t debating whether we should have substantial cuts in NSD spending – which includes everything from home heating assistance to education assistance – as a share of our economy. They’re just debating how drastic those cuts should be.

Think about that, and then remember a spectacle that played out in May. Displeased when Democrats forced them to vote on Paul Ryan’s budget proposal (which takes an axe to NSD as well as to Medicare and Medicaid), Senate Republicans forced Democrats to vote on the budget Obama had introduced in February. Every Democratic senator present voted against it. Many justified their votes by saying that Obama’s February budget proposal had been supplanted by the more austere budget framework he announced in April, whose NSD spending cuts matched the size of those called for by Debt Commission co-chairs Erskine Bowles and Alan Simpson. Many observers took the Senate Democrats’ symbolic “no” vote as evidence they saw a need to distance themselves from the supposedly big-spending ways of their president. But the February budget proposal the Democrats voted against is the one that would reduce NSD spending as a percentage of GDP by a third over the next 10 years.