August 31, 2014

Bad Precedent in Obama’s Budget: Ignoring Spending Caps

  • The federal budget is an expression of our country's values. Where we choose to spend and at what levels, how and who we tax, and the borrowing we...

President Obama’s budget for Fiscal 2015 includes new proposals that would exceed the discretionary spending caps that he and Congress approved only months ago. This would set a bad precedent for ignoring budget caps.

The Ryan-Murray agreement in December set discretionary spending caps for the current fiscal year and the next while providing some relief from sequestration. The agreement set the overall cap for Fiscal 2015 at $1.014 trillion, which was $18 billion above the sequestration cap.

The administration says its budget -- the analytical perspectives and historical tables of which were released this week -- complies with the top-line discretionary cap by recommending individual agency budgets to fit within those caps.

But Obama’s budget goes further by proposing $56 billion in supplemental funding for items that would normally be funded as appropriations through the regular discretionary spending process. These items include infrastructure, education, research, military readiness, efficiency improvements and job training proposals.

The administration’s proposal splits the extra funding evenly between defense and non-defense programs. The administration also proposes to pay for the extra spending -- so that it doesn’t increase the deficit -- by slicing agricultural subsidies, increasing airport security fees, and reducing the tax preferences for wealthy retirement accounts.

While the supplemental funding might well include important areas for government investment, this should not be done at the expense of the spending caps that lawmakers just agreed to a few months ago. If administration officials want to increase discretionary spending, they should be honest about the fact that they wish to increase those caps in the same way they are honest about finding offsets for that increased spending.

Opening up a new debate over the caps has the potential to throw the appropriations process back into the “budgeting from crisis to crisis” that the December agreement was supposed to avoid -- since Republicans, too, would wish to alter the caps in its mix of defense versus non-defense spending and the total spending levels.

The chairs of the House and Senate Appropriations committees have already said they will ignore Obama’s supplemental request and that Congress should abide by the Ryan-Murray caps.