03 February 2011

Cutting the Deficit

House Republicans in Congress are learning that it is hard for them to keep their promises of budget cuts.

The hardest hit agencies would include the Food and Drug Administration, the Internal Revenue Service and the departments of Commerce, Housing and Urban Development and Agriculture. . . . Foreign aid on an annualized basis would take a 6 percent cut. . . .

— The Department of Homeland Security would face a budget freeze instead of the 3 percent increase proposed by Obama. . . .

— Republicans would scale back Obama's proposed 4 percent, $23 billion increase for the Pentagon. Instead, the military budget would grow by just $10 billion.

— Popular programs such as health research and federal aid to school districts appear likely to take a hit when lawmakers write the spending bill for the departments of Education, Labor and Health and Human Services. Republicans promise not to cut the minimum $5,550 Pell Grant for low-income college students.


I proposed a combination of tax reforms, cuts to the defense budget, and cuts to domestic spending last November after the election, as a response to the bad proposals considered by the deficit reduction commission and the Republican proposal made during the campaign. To the domestic spending proposal, I made then, I would also suggest deep cuts to federal higher education funds for for profit higher education, on the order of about $2 billion, in a way that would provide greater confidence of results.

Meanwhile the Colorado General Assembly is considering state budget issues as well. Last summer, I addressed some of the issues it is facing (although mostly longer term fiscal viability issues) in the form of a proposed overhaul of the state and local public finances in Colorado.

No comments: