Why Paul Ryan’s Budget Matters

18 September 2012

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By Sabrina Peterson, Research and Communications Intern

On August 2, 2011, President Obama signed into law the Budget Control Act with the support of both the Republican-controlled House and the Democrat-controlled Senate. The Act was intended to incentivize budgetary negotiations between the two political parties which had come to a standstill as a result of the U.S. debt-ceiling debate. Under the terms of the Act, the U.S. debt-ceiling could increase by up to $2.4 trillion but only if significant cuts to spending were also made.

The Budget Control Act was carried out in two stages: the first stage immediately increased the debt-limit by $400 billion with an additional $500 billion made available, subject to a vote in Congress; the second stage increased the debt-ceiling by $1.2 to $1.5 trillion through equivalent cuts in spending. These spending cuts would be determined by a Joint Select Committee on Deficit Reduction (also known as the Super Committee) composed of 12 Congress members—6 from each political party. As mandated by the Budget Control Act, the Super Committee had until November 23, 2011 to come up with a plan or face $1.2 trillion in automatic spending cuts to defense and domestic programs through sequestration.

But the Super Committee never came to an agreement. Grid-locked on the same issues that brought the U.S. debt-ceiling debate to a standstill before President Obama signed into law the Budget Control Act of 2011, the Super Committee failed to come up with a bipartisan plan for a balanced budget.

Unless Congress agrees on a budget to replace the $1.2 trillion in automatic spending cuts before 2013, $492 billion in defense and $492 billion in domestic spending will be cut from the budget over the next ten years. This means that $109 billion will be cut from next year’s 2013 budget, which actually begins on October 1, 2012.*

The budget debate matters.

In March of this year the Republican-controlled House passed a budget that would replace current sequestration spending cuts to defense with deep cuts to mandatory and discretionary programs. The budget was drafted by Representative Paul Ryan of Wisconsin, who is Mitt Romney’s Republican Vice Presidential running-mate for the 2012 election. Under the terms of the House budget, defense spending would actually increase by $554 billion over the next ten years which means that non-defense mandatory and discretionary spending would be cut by roughly $1 trillion.

Though the Senate refused to vote on the legislation because it did not include new sources of revenue to balance the budget, the provisions introduced in the House budget are by no means new. Deregulation, privatization, and cuts to social safety net programs are key policies of the Republican Party and have been since the Reagan administration.

I repeat: the budget debate matters.

  • The deficit, regardless of the $1.2 trillion in automatic spending cuts, will continue to rise. This means that current funding for mandatory and non-defense discretionary programs are vulnerable to additional cuts.
  • $492 billion was cut from non-defense and domestic spending. Although mandatory programs such as SNAP, Social Security, Medicare, retirement, veteran benefits, unemployment insurance, and other numerous social safety net programs are currently exempt from the sequestration cuts, the House budget would reverse many of these exemptions.
  • Under the House budget, another $492 billion will be cut from mandatory and non-defense spending.
  • Under the terms of the Budget Control Act of 2011 and following the Super Committee’s failure to determine any spending cuts, how the $1.2 trillion in automatic spending cuts through sequestration will take effect is still uncertain. Even though the Obama administration did submit a sequestration report last Friday that details which programs and departments would receive cuts and by how much, Congress can still pass a budget to reverse these cuts.

It is absolutely essential that the public understand the budget debate going into the 2012 election and the 2013 fiscal year. We must understand what has already taken place and what is currently taking place around the budget. The public must take the lead in the future to ensure programs that all communities have a right to are protected and fully-funded.

I repeat: the budget debate matters.

Stay informed. Be engaged. Seek change.

Stay informed by regularly visiting the CFJC website for budget updates. Be engaged by sharing your concerns over the budget with your community or by emailing me at speterson@cafoodjustice.org. Seek change by connecting with community leaders and local representatives to make your voice a part of the conversation.

 

*Although the sequestration cuts would occur on January 2, 2013, the 2013 fiscal year actually starts on October 1, 2012. This means that departments and programs affected by the sequestration cuts would need to anticipate operating on reduced budget starting as early as October 1st.

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