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Domestic cuts signal 'tipping point' in budget politics

Despite lawmaker anguish over $15.3 billion in proposed cuts, those savings are dwarfed by rising entitlement costs.

Say goodnight to new views of deep-space galaxies from the Hubble Space Telescope. Count on the ailing Amtrak rail service getting less support. As for the Safe and Drug-Free Schools program, don't expect a long future for state grants.

These are among 154 programs on track to be axed or downsized in the president's fiscal 2006 budget - if Congress goes along. Together, these proposed cuts produce $15.3 billion in savings - not much more than rounding error in a $2.57 trillion budget and more than eclipsed by war costs in Iraq and Afghanistan, which are off-budget.

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But budget experts say that this year's tough choices in non-security domestic spending could signal a tipping point in federal budget politics, where contraction in domestic programs will be increasingly the rule as the nation takes on the costs of retiring baby boomers.

"Symbolically, there's a big difference between a small increase and a small decrease on the domestic side," says Richard Kogan, a senior fellow at the Center on Budget and Policy Priorities.

GOP lawmakers are already feeling the heat. The White House is also asking Congress to cut $62 billion from mandatory programs, including cutting $12.8 billion from Medicaid and $2.1 billion from crop payments - moves strongly opposed by the nation's governors and lawmakers from farm states, respectively.

In official Washington, federal programs rarely die. Between congressional sponsors and mobilized beneficiaries, there's usually enough pushback on Capitol Hill to spare the ax. The White House describes these cuts as the first planned drop in non-security discretionary spending since the Reagan years.

"The principle here is clear: Taxpayer dollars must be spent wisely, or not at all," said President Bush in his Feb. 2 State of the Union Address.

Budget experts have seen the budget crunch on discretionary dollars coming for decades. Since 1962, mandatory spending, including entitlements and interest on the national debt, has grown from one-third to nearly two thirds of the federal budget. Last year's federal budget deficit hit $412 billion, a record, and this year's deficit is expected to add another $427 billion to the nation's debt.

Among the cuts proposed for fiscal 2006, education programs take the biggest hit. The White House proposes zeroing out $4.3 billion in programs, which it says are either redundant or ineffective. These include $205 million for Comprehensive School Reform, axed because most schools that adopted research-based models did so without CRS funding, and $9 million for "Exchanges with Historic Whaling and Trading Partners," a program whose name alone appeared to make the case for a cut in cash-strapped times. Some $2.2 billion in high school programs, including the popular Upward Bound and Gear UP programs, will be axed, with some money redirected into a new $1.5 billion high school initiative.

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In a move sure to meet resistance on Capitol Hill, the White House is also proposing cutting earmarks out of the federal budgeting. Last year's budget included some $23 billion in earmarks, which numbered more than 10,500 according to budget watchdog groups. Such proposed cuts include $476 million for hospitals and universities through the Department of Health and Human Services and $308 million for water projects through the Environmental Protection Agency.

On recess this week, Democrats blasted such cuts as bad for their states and districts. But the White House also faces pushback from Republicans on cuts ranging from agricultural subsidies to Medicaid. A longtime deficit hawk, freshman Sen. Tom Coburn (R) of Oklahoma often voted against big farm subsidies while serving in the House. But even he has difficulty with the president's proposal to reopen the 2002 farm bill. "People expected a six-year farm bill. We can't change it on them now."

Even with all its proposed cuts, this year's budget cutting exercise falls well short of what is needed, because so much is left off the table, budget experts say.

"One has to give serious credit for the fact that this budget puts some entitlement programs on the table, particularly for health care," says Maya MacGuineas, president of the Committee for a Responsible Federal Budget. "This year is just a small taste of what is to come."


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