The Cost of Compromise – Federal Budget Roundup


Last week, Americans had the privilege of enjoying a live broadcast as the 112th Congress presented its latest round of political theater. As the clock ticked closer to a government shutdown, it started to feel as if the split-party Congress had zero chance of reaching a budget agreement. For the entire long and painful first act, we watched, read, and listened as politicians from both sides of the aisle threw blame at each other harder than any pitcher hurled a fastball on opening weekend. Neither side could agree on terms: House Majority Leader John Boehner struggled to balance the demands of the Tea Party and the less-rabid members of his party, while the Democrats fought to use their remaining powers of control to counter attacks on social policies wholly unrelated to fiscal conservation. Meanwhile, President Obama was left sounding like the disappointed father of two bickering children, pleading with them to just share the crummy plastic toys.

But late Friday night, with less than two hours left before the shutdown, the curtain closed for intermission when a deal was finally reached (although according to today’s NY Times, the agreement may be at risk). This news was certainly welcome to government workers, families of soldiers, homebuyers, visitors to national parks, and countless others. However, the details of the deal were not immediately known. All that was announced was that cuts to federal spending for the rest of fiscal year 2011 (through this September) will total around $39 billion — more than the $33 billion the Democrats proposed in their original compromise, but less than the $61 billion called for by the GOP-controlled House, or the staggering $100 billion screamed for by the most vocal of the Tea Party. The suspense was palpable, a perfect cliff hanger for the second act.

On Monday, Act II began as the specifics of the compromise bill started to trickle out. The entire bill is far too lengthy to discuss on Crossroads, but here are the areas of the most importance to RenewLV and the smart growth community.

Please note: information is still a tad bit sketchy, and specifics may change by the time the bill is fully passed. Every effort has been made to check all information against the House’s and Senate’s Appropriation Committee’s multiple press releases, all dated Monday, 4/11 and Tuesday, 4/12.

Housing and Urban Development

This one hurts, folks. The  Department of HUD suffered a host of brutal cuts, including a $942 million cut to HUD’s community development fund. Additionally, there is a 16% ($650 million) cut to the Community Development Block Grant, a 33% ($50 million) reduction to the Sustainable Communities Initiative, and a 19% ($456 million) cut to the public housing capital fund. Fortunately, there is a piece of great news to take the edge off: the Community Services Block Grant (CSBG; see below for more information), which stood to lose almost one-third of its funding ($285 million), will only be cut by $20 million. Even that (relatively) small amount can do harm, but we certainly can be thankful that the originally proposed cut did not come to fruition.

Environment

The Environmental Protection Agency: Although the EPA’s total budget is decreased by a painful $1.6 billion (16%) from last year, it could be worse. Last week’s GOP attempts to reverse various climate regulations and block the EPA’s ability to create rules on global warming were successfully defeated.

Conservation: The budget deal represents a 12% cut to the National Resources Conservation Service, including a tough 55% cut to the Watershed Rehabilitation program. Land and Water Conservation Fund (land acquisition) programs are cut by 33% ($149 million).

Health

Public Health: Thankfully, good news on this front. While there are various cuts to health care programs, reductions to many public and community health initiatives have been avoided. The Prevention and Public Health Fund (discussed in this Crossroads post) was untouched, despite a $750 million cut proposed by the GOP. However, the CDC’s budget was cut by 9%.

Food and Drug Administration: Although the Food Safety and Inspection Service’s funding decreases by 1%, The FDA’s FY 2011 budget actually sees a 4% increase over last year. As the Senate press release points out, “this funding level will allow the FDA to begin implementation of the recently passed Food Safety Modernization Act.”

Transportation

Compared with 2010, there is a $900 million cut to transit spending. Additionally, President Obama’s proposed high-speed rail system faces a $1.5 billion cut for FY 2011, while about $400 million in last year’s funds were rescinded. This leaves $1 billion for this year.

Education

The President’s “Race to the Top” program escaped cuts, but the Pell Grant program has been trimmed – grants can no longer be used for summer school.


While I am grateful that the draconian $61 billion in spending cuts from H.R. 1 did not pass, the cuts in this budget compromise are still, in simple terms, brutal. In fact, the cuts are the largest in U.S. history. I am particularly happy about the survival of the Community Service Block Grant, but even that relatively small reduction, combined with the other cuts to HUD, have the potential to do great harm.

I wrote about potential reductions to the CSBG and CDBG back in February, after President Obama announced his original budget proposal. The community service grants represent a significant source of funding to organizations such as the Community Action Committee of the Lehigh Valley (CACLV), which are crucial to job creation and economic development. I don’t think that anyone, left or right, would disagree with me in saying that unnecessary spending must be reduced in order to close the federal deficit. However, cuts that come at the expense of vulnerable citizens and actually hurt the economy, such as those to community development and transportation programs (which have the potential to create a multitude of jobs and stimulate the economy), are just plain foolish.

Posted on April 13, 2011, in Federal Policy, Uncategorized. Bookmark the permalink. Leave a comment.

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