July 24, 2014

Elmendorf Reviews Discretionary Spending Issues

  • The national debt has grown significantly in recent years due to rising annual deficits. A deficit occurs in any year the government spends more...

Douglas Elmendorf, director of the Congressional Budget Office, last week outlined some of the difficulties facing lawmakers as they weigh further cuts in the “discretionary” spending that Congress approves on an annual basis.

Though defense and non-defense discretionary spending account for less than half of the federal budget, it receives a disproportionately large share of attention during budget-cutting debates.

In testimony to the joint committee on deficit reduction on Wednesday, Elmendorf noted that discretionary spending caps in the Budget Control Act of 2011 would save $778 billion between 2012 and 2021. He pointed to several key factors that would make substantial further reductions in this part of the budget particularly challenging.

Elmendorf said some programs, such as veterans health benefits, are projected in their current form to rise more rapidly than inflation. “Even if budget authority for non-defense programs grew at the rate of inflation,” he cautioned, “that amount of funding would be insufficient to continue some current policies over the 2012–2021 period.”

If spending on some programs is allowed to grow faster than inflation, however, there will be even less room under the caps for other discretionary programs.

Elmendorf also discussed growing pressures for funding in some important areas: “For example, many analysts believe that current national spending on infrastructure is inadequate to provide enough roads, bridges, and other capital assets to maintain the current level of highway services or to fund all of the projects whose benefits exceed their costs.”

The Concord Coalition, while supporting reasonable cuts in discretionary spending, urges elected officials to pursue fiscal reforms throughout the federal budget – including entitlement programs and subsidies for some individuals and businesses that are built into the tax code. Relying on discretionary spending cuts alone will not put the country on a sustainable fiscal track; the math just doesn’t add up.