Program Cuts in the President's Budget
Cuts Grow Deeper Over Time and Will Hit States Hard
February 23, 2006
The President’s budget proposes substantial cuts in funding for domestic discretionary programs over the next five years. The budget specifies the funding level for each program in 2007, but the levels for specific programs for years after 2007 — the years in which the overall level of reductions in domestic discretionary programs would grow substantially — are hard to discern from the budget documents the Administration released publicly. This analysis uses Administration materials that were not widely distributed — including a key Office of Management and Budget (OMB) computer run that apparently was released inadvertently — to show the multi-year impact of the proposed cuts on a number of important domestic discretionary programs.
This analysis also examines the effect that the cuts in funding for domestic programs the President has proposed for 2007 through 2011 would have state by state. Many domestic programs have long been operated efficiently through a system of grants-in-aid to state and local governments. Nearly half of the overall reduction in domestic discretionary funding proposed by the President for 2007 would come from such grants-in-aid. Implementing these reductions would force states to reduce the services they provide or increase their own taxes to make up for the federal costs being shifted to them. This analysis shows how proposed cuts in selected programs would affect individual states.