Federal Budget Plan Casts a Dark Shadow over Sunshine Week

Friday, March 20, 2015 at 6:34 PM by

This week is national Sunshine Week, which is a time to celebrate openness and transparency in government.  That seems rather ironic after the House Budget Committee Chairman offered a plan for the federal budget that fails basic standards of transparency.  As Robert Greenstein of the Center on Budget and Policy Priorities wrote on Wednesday:

The plan proposes a whopping $1.1 trillion in essentially unspecified cuts in mandatory (i.e., entitlement) programs outside health care and Social Security, which reflects an exceptional if not unprecedented lack of transparency.”    

In his New York Times column today, Paul Krugman (a Nobel prize winning economist) refers to this as a “magic asterisk,” which he explains is a budget line “that promises huge spending cuts and/or revenue increases, but without explaining where the money is supposed to come from.” Krugman goes on to make the case that both the House and Senate fiscal plans go to new lengths in concealing how the budget would be balanced.

“…the just-released budgets from the House and Senate majorities break new ground. Each contains not one but two trillion-dollar magic asterisks: one on spendingone on revenue. And that’s actually an understatement. If either budget were to become law, it would leave the federal government several trillion dollars deeper in debt than claimed, and that’s just in the first decade.” 

Although a huge part of the budget cutting is unspecified, the House plan also spells out some huge and extremely damaging cuts in health, education and human service programs. As Robert Greenstein wrote: 

The plan would convert Medicaid and the Children’s Health Insurance Program into a single block grant with drastically reduced funding levels.  In addition, it would repeal health reform’s coverage expansions, which have extended coverage to 16.4 million previously uninsured people to date and strengthened coverage for millions of others.  These health care cuts total a stunning $3 trillion over ten years.

…  The plan would slash these [non-defense discretionary] programs by $759 billion below the already damaging sequestration levels.  Under sequestration alone, non-defense discretionary funding is slated to tie an all-time record low in 2016, measured as a share of gross domestic product (GDP) in data that go back to 1962, and then to set new record lows in 2017 and every year thereafter.  Yet the House budget cuts $759 billion below those levels … By 2025, total funding for non-defense discretionary programs would be 33 percent below the 2010 level adjusted for inflation. 

Greenstein explains that a summary document prepared by House Republicans suggests that the $1.1 trillion of unspecified cuts would include roughly $125 billion from the Supplemental Nutrition Assistance Program (food stamps), which would be converted to a block grant, as well as big cuts in Pell Grants, and probably also in child nutrition programs, the Earned Income Tax Credit, student loans and veterans’ pensions and farm programs. 

Krugman points out that because the bill also includes tax cuts for the wealthy, it would result in “huge transfers of income from the poor and the working class, who would see severe benefit cuts, to the rich, who would see big tax cuts.” However, the “magic asterisk” makes that transfer from the poor to the rich far less apparent. 

The unspecified cuts and revenue increases are extremely disappointing developments during Sunshine Week, but let’s not stop pressuring federal and state legislators in both parties to respect the electorate by being open about their budget balancing plans and enabling their constituents to be able to weigh in on those plans. 

Jon Peacock

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