Senior Advisor for Federal Fiscal Policy
A key misunderstood element of House Budget Committee Chairman Paul Ryan’s budget plan is his proposed cut in spending for “other mandatory” programs — non-discretionary programs other than Social Security, Medicare, Medicaid, and other health programs. His plan shows almost $1.9 trillion in cuts in such programs over the next ten years compared to what President Obama’s budget proposed for such programs. His plan does not provide any details about specific program cuts that would add up to that very large amount, although Chairman Ryan reportedly indicated that he would get a significant portion of the savings from not accepting various policies that the President proposed.
But any notion that you could get most of the $1.9 trillion in savings in this category simply by rejecting the President’s proposals for new spending would be mistaken. In fact, the Ryan plan proposes to cut spending for non-health mandatory programs by $1.2 trillion below the spending projected for these programs under current policies.
Moreover, you cannot achieve those savings without making very deep cuts in the crucial safety-net programs in this category, such as SNAP (formerly known as food stamps), Supplemental Security Income for the elderly and disabled poor, Temporary Assistance for Needy Families, the school lunch and other child nutrition programs, and unemployment insurance.
At today’s House Budget Committee markup, Chairman Ryan’s staff indicated that his plan assumes a $133 billion cut in SNAP over the next ten years. In a document outlining his plan — The Path to Prosperity — and in response to press questions, Chairman Ryan also suggested that cuts in farm programs and changes in federal employee retirement could contribute to the required savings (although he provided no details about the policies that he assumed or the savings they would achieve). But these two areas could likely provide only a relatively modest amount of savings. Total projected spending for farm programs over the next ten years is $165 billion. While we have long supported substantial cuts in farm programs, cutting more than a modest portion of the projected spending for those programs isn’t politically feasible. (The Bowles-Simpson commission seemed to agree; it proposed significant cuts in Social Security, Medicare, defense, and many other programs, but to cut farm programs by only $10 billion over ten years.)
The federal employee retirement program is more politically vulnerable — Bowles-Simpson recommended $93 billion in savings from changes in federal civilian and military retirement (most of which would come in the form of an increase in revenues, although Bowles-Simpson displayed the savings as a cut in mandatory spending, which Chairman Ryan presumably is assuming as well). Assuming about $100 billion in savings from federal retirement programs, $133 billion in savings from SNAP, and $50 billion in savings from farm programs (five times what was acceptable to Bowles-Simpson commission members), an additional $900 billion in savings under the Ryan plan would have to come from non-health mandatory programs.
Of the $900 billion, a very small amount could come from increases in fees or asset sales, but the bulk would have to come from the safety-net programs that represent most of the remaining spending in this category. Put simply, there is no way to generate the required savings without extremely severe cuts in these programs, on which the most vulnerable Americans depend. Cutting these programs sharply would be an appalling idea — particularly while the wealthiest Americans would get big tax cuts — but House passage of a budget that requires these cuts without a full and honest debate about them, and without leveling with policymakers and the public about what cuts the Ryan budget envisions in these programs, would be a real travesty.