February 20, 2008

Many Cuts Come on Top of Sizable Reductions in Recent Years
by Sharon Parrott, Kris Cox, Danilo Trisi, and Douglas Rice


The President’s 2009 budget would provide some $20.5 billion[1] less for domestic discretionary programs outside of homeland security — a broad category of programs that includes everything from child care to environmental protection to medical research — than the 2008 level, adjusted for inflation.[2]

The budget calls for reductions in a broad range of services, including some areas that have seen sizable cuts in recent years.  For example, the budget would cut child care, environmental protection, and job training — all areas for which funding in 2008 is well below funding earlier in the decade, after adjusting for inflation.

In other areas, the budget does not call for large new cuts, but nor does it reverse sizable cuts that have been made in recent years.  K-12 education is such an area.  After the No Child Left Behind initiative was enacted, funding for K-12 education increased for several years.  Since 2004, however, funding has failed to keep pace with inflation.  In 2008, funding for K-12 education is 8.9 percent below the 2004 level, in inflation-adjusted dollars.  The President’s proposed funding level falls just short of what would be needed to keep pace with inflation.  As a result, under the President's budget, K- 12 funding in 2009 would fall 9.1 percent below the 2004 funding level, adjusted for inflation.

Head Start is another example.  Head Start funding has essentially been frozen since 2002, without adjustment for inflation.  As a result, when inflation is taken into account, funding in 2008 is 11 percent below the 2002 level.  The President’s proposed 2009 funding level falls 12 percent below the 2002 inflation-adjusted level.

As a result, significant additional funding would be needed to restore many programs to the levels in place earlier this decade.  For example, in K-12 education alone, an additional $3.7 billion above the President’s 2009 budget request would be needed to restore funding to 2004 levels (after adjustment for inflation).  To restore child care and Head Start funding to 2002 inflation-adjusted levels would require an additional $1.4 billion above the President’s budget request.

Many of the proposed cuts in domestic discretionary programs would adversely affect state budgets.  A large number of domestic discretionary programs provide funding to states for various types of services such as education, low-income energy assistance, environmental protection, and mass transit.  The President’s budget would cut overall funding for domestic discretionary grants to state and local governments by $19.1 billion, as compared to 2008 funding levels adjusted for inflation.  (Funding would be $15.1 billion below 2008 funding levels even without adjusting for inflation.)

It is important to note that despite some rhetoric to the contrary, these programs have not grown rapidly in recent years.  In 2008, funding for domestic discretionary programs outside homeland security is lower as a share of the economy than it was in 2001.  And, between 2002 and 2008, the overall funding level for domestic discretionary programs outside homeland security declined 2.6 percent in real per capita terms.[3]  (See box on page 2 of the report.)

pdf Click here to view the full-text of the report - 44 pages

pdf Click here to view the state-by-state tables - 33 pages


Introduction End Notes:

[1] Before adjustment for inflation, the drop is $10.6 billion, or 2.3 percent.  It should be noted that the President’s budget also proposes that the fiscal year 2009 appropriations bills include $6.4 billion in non-controversial mandatory savings.  If those savings are accepted, then domestic discretionary programs outside homeland security would have to be cut $14.1 billion in 2009, after adjusting for inflation, rather than $20.5 billion.

[2] Throughout this paper, unless otherwise noted, comparisons to prior years adjust prior funding levels for inflation.

[3] Adjusting only for inflation, there has been an increase of 3 percent over the six-year period.

Document Resources:
  pdf PDF of full report (44pp.)
  pdf PDF of state tables (33pp.)
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The President’s 2009 budget provides $20.5 billion less for domestic discretionary programs outside homeland security than is needed simply to keep pace with inflation. In many areas, the cuts come on top of sizable cuts made in recent years. Examples of the proposed funding levels include (all figures adjusted for inflation):

K-12 Education — 9.1 percent below its 2004 level;
Head Start — 12 percent below its 2002 level;
Repairing and Modernizing Public Housing — 45 percent below its 2001 level;
Low-Income Energy Assistance — 22 percent below its 2008 level;
Environmental Protection — 26 percent below its 2001 level.

These cuts would directly affect millions of Americans. The President’s budget documents, for example, show that the number of children with child care assistance would fall by about 200,000 between 2007 and 2009 under his budget.

Many of the cuts would hurt state budgets as well, by reducing support for a range of public services states help provide.

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