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Even Without Sequestration, Non-Defense Spending Still Headed Toward Historic Low

October 8, 2015 at 2:45 PM

Even if, through their budget discussions, the President and Congress provide $37 billion in sequestration relief for non-defense discretionary (NDD) programs next year — the most that any agreement would likely include — funding for these programs would still be low by historical standards.

An added $37 billion would eliminate all of the sequestration in NDD programs and restore the 2011 Budget Control Act’s (BCA) original cap for 2016 for these programs.  (Proponents typically pair this proposal with $38 billion of sequestration relief for defense programs.)  While welcome, such an increase in NDD funding would be modest because the original BCA caps were themselves quite restrictive.  Even with an additional $37 billion in 2016: 

  • NDD funding would be $66 billion (11 percent) below its 2010 level, after adjusting for inflation.  If sequestration stays in place, the cut relative to 2010 would be $103 billion or 17 percent (see graph).

  • NDD spending would amount to just 3.3 percent of gross domestic product (GDP) — one of the lowest levels on record, according to data back to 1962.  NDD spending averaged 3.8 percent of GDP from 1962 to 2015.

Moreover, even if policymakers also eliminated sequestration after 2016, thereby restoring the original BCA caps in all years, NDD spending would still drop by 2019 to its lowest level on record as a percent of the economy.

As the Center has detailed (see examples here and here), the BCA caps as lowered by sequestration imposed a far-reaching reduction in non-defense discretionary funding that has damaged a wide range of areas critical to public welfare as well as investments in the future.  In fact, in many areas the cuts are deeper than the figures above imply. 

For example, the population has grown since 2010, and thus the need for many programs has grown faster than inflation.  Consequently, even with full sequestration relief for 2016, real per-capita funding for NDD programs would be 15 percent below the 2010 level. 

Also, certain discretionary programs such as VA medical care have grown since 2010.  To fit into the overall spending caps, other NDD programs had to shrink even more.

Eliminating the sequestration cuts that are squeezing NDD funding would be a step in the right direction, but would address only some of the NDD cuts since 2010 and would leave in place the original, tight BCA caps.

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