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Obama Proposal Could Lead to Bigger Domestic Cuts, Smaller Defense Cuts


A provision of the President’s budget would likely lead to even bigger cuts in domestic discretionary programs than the Budget Control Act’s (BCA) spending caps call for, with the savings going to lessen the required cuts in defense spending.

Our new analysis explains why, but here’s the story in brief:

Under current law, separate caps limit total defense discretionary funding and total nondefense discretionary funding for each year from 2013 through 2021.  The President’s budget would replace those caps with a single overall cap on discretionary appropriations starting in 2014, throwing defense and nondefense funding into the same pot.  (Essentially, the President is proposing to return to the BCA’s original cap structure, before the failure of the Supercommittee triggered a reconfiguration of the caps.)

The proposal wouldn’t change the overall amount of discretionary funding that Congress could approve in any year.  But in the current political environment, where advocates of the Pentagon are emphatic, defense contractors employ well-connected lobbyists and make substantial campaign contributions (and, in many cases, are strategically located in key congressional districts), and budgetary savings in defense often are attacked as jeopardizing national security, it would likely lead Congress to cut domestic and international discretionary programs further in order to help protect the military budget.

For 2013, the year before the proposal would take effect, the President’s budget breaches the existing defense cap by about $5 billion, while providing nearly $5 billion less for nondefense programs than the current cap allows.  (This funding shift is possible because the budget would change the caps to cover “security” and “nonsecurity” funding, which include somewhat different programs than the “defense” and “nondefense” categories.)  This modest reallocation may be just a foretaste of much larger reallocations to come in future years, especially on Capitol Hill, if policymakers remove the firewall between defense and nondefense funding.