KEY POINTS: FY 2011 Agreement on Spending Cuts to Support American Job Creation
This week, Congress is moving toward approval of an agreement on the largest non-defense spending cut in history to help begin to create a better environment for private-sector job growth. The agreement is far from perfect, and we need to do much more if we’re serious about creating new jobs, fixing our spending-driven debt crisis, and ending the uncertainty that continues to plague our economy. But it is a positive first step, and a credible down payment as Republicans turn the fight from saving billions of dollars into saving trillions of dollars as part of the GOP budget outlined by House Budget Committee Chairman Paul Ryan, R-Wis., aptly titled “The Path to Prosperity.” The votes on both the spending cut agreement and Ryan’s budget will take place later this week. Here is a quick summary of the spending cut agreement:
- Largest Non-Defense Spending Cut in American History. The agreement will enact the largest non-defense spending cut in dollar terms in American history, and the biggest overall reduction since World War II, beginning the process of ending the Washington spending binge that is causing uncertainty for American job creators. Subject to Congressional Budget Office (CBO) scoring, the agreement has a reduction in spending of nearly $40 billion compared to Fiscal Year 2010 enacted levels.
- Hundreds of Billions in Spending Cuts Over the Next Decade. Subject to CBO scoring, the agreement will cut hundreds of billions of dollars from the federal budget over the next decade – “real money,” as the Wall Street Journal editorial board recently noted.
- Officially Ends the “Stimulus” Spending Binge. The agreement begins to reverse the “stimulus” spending binge that began in 2009 – signaling the official end of a period of unprecedented government intervention that former Federal Reserve Board Chairman Alan Greenspan and other economists say hurt job creation in America by crowding out private investment.
- Sets Stage for Trillions More in Spending Cuts. Clears the way for congressional action on House Budget Committee Chairman Paul Ryan’s budget – The Path to Prosperity – which cuts trillions in spending and offers a long-term blueprint for American job creation.
- Requires Mandatory Audits of the New Job-Crushing Bureaucracy Set Up Under Dodd-Frank. The agreement subjects the so-called Consumer Financial Protection Bureau (CFPB) created by the job-destroying Dodd-Frank law to yearly audits by both the private sector and the Government Accountability Office (GAO) to monitor its impact on the economy, including its impact on jobs, by examining whether sound cost-benefit analyses are being used with rulemakings. Two audits and a separate study are required within 180 days and annually thereafter, providing new accountability. The first audit requires an independent review of the CFPB’s operations and budget. The second audit requires the GAO to review the CFPB’s financial statements. The annual study requires GAO to report on the economic impact of the activities of the CFPB and other financial regulators. This review includes an assessment of how the CFPB’s activities are impacting safety and soundness of financial entities; cost and availability of credit; and savings for consumers, reductions in paperwork, and changes in bankruptcy filings. The study also requires examination of the costs of complying with rules, whether agencies are using sound cost-benefit analyses, and what efforts are being taken to avoid duplicative or conflicting rule-makings, information requests, and examinations.
- Bans Taxpayer Funding of Abortion in D.C. and Reduces Funding for Family Planning. The agreement restores the Dornan amendment (D.C. Hyde Amendment) to ensure that no congressionally appropriated funds (whether locally or federally generated) may pay for abortion in the District of Columbia. The policy was in place from FY 1996 to FY 2009. FY 2010 is the only year since FY 1996 that the D.C. Hyde Amendment was not attached to the Financial Services, D.C. Government Appropriations Act. In addition, the agreement slashes funding for Title X of the Public Health Service Act by $17 million, and international family planning by $73 million, including a $15 million cut to the United Nations Population Fund.
- Funds Our Troops. The agreement funds our troops and provides them with the resources they need to succeed in their missions at home and abroad. Specifically, the bill provides $513 billion for the Department of Defense, approximately $5 billion more than last year.
- Fights Terrorism. Despite attempts by the White House to weaken current law regarding the transfer of Guantanamo detainees to third countries, the agreement maintains current law, including all certification requirements. House Republicans have fought for more than two years to ensure that terrorists held at the detention facility will not be brought to the United States nor released to third countries which cannot adequately detain them. Maintaining the language is a strong signal that Republicans remain committed to preventing terrorist attacks and will continue to fight to prevent the Administration from returning to a pre-9/11 criminal standard.
- De-Funds Obama Administration “Czars” for Health Care, Autos, Climate Change, & Urban Affairs. The agreement denies federal funding for the salaries and expenses for four of the Obama Administration’s controversial “czars.” De-funded through the agreement are the Obama Administration czars for health care (Director, White House Office of Health Reform), climate change (Assistant to the President for Energy & Climate Change), autos (Senior Advisor to the Secretary of the Treasury assigned to the Presidential Task Force on the Auto Industry and Senior Counselor for Manufacturing Policy), and urban affairs (White House Director of Urban Affairs).
- Ends Funding for Ineffective Education Programs. The agreement terminates more than 40 ineffective programs at the Department of Education including the likes of Educational Technology State Grants, Even Start, Advanced Credentialing, Mental Health Integration, Exchanges with Historic Whaling Partners, Women’s Educational Equity, Tech-Prep Education State Grants, Smaller Learning Communities, Legal Assistance Loan Repayment Program, Thurgood Marshall Legal Opportunity Scholarships, and B.J. Stupak Olympic Scholarships.
- Provides New Tools in the Fight to Repeal Obamacare. The agreement generates new tools and accountability mechanisms for the fight to repeal Obamacare. It requires numerous studies that will force the Obama Administration to reveal more about the impact of its government takeover of health care, including a study on the premium impacts for individuals and families as a result of certain Obamacare mandates; a full audit of all the waivers that the Obama Administration has approved and denied to firms and organizations who can’t meet the new annual coverage limits; a full audit of what’s happening with the comparative effectiveness research funding that was in Obamacare and the president’s failed “stimulus” spending bill; and a report on all of the contractors who have been hired to implement the law and the costs to taxpayers of such contracts. More importantly, the final agreement includes a guarantee that the Senate will vote on a measure which if enacted will de-fund all of Obamacare. This will be the first time the Senate has had to vote on defunding Obamacare.
- Denies Additional Funding to the IRS. The Obama administration has sought increased federal funding for the Internal Revenue Service (IRS) – money that could be used to hire additional agents to enforce the administration’s agenda on a variety of issues. This increased funding is denied in the agreement.
- Guarantees Senate Vote on Ending Taxpayer Funding of Planned Parenthood. The final agreement includes a guarantee that the Senate will vote on a separate measure that defunds Planned Parenthood and any of its affiliates. Conservative estimates indicate that Planned Parenthood and its affiliates receive $363 million of its nearly $1 billion budget in taxpayer funds. While the national abortion rate continues to decline, the number of abortions provided by Planned Parenthood continues to climb. According to Planned Parenthood’s March 2011 year-end report for its 2009 fiscal year, Planned Parenthood served three million clients, of whom 332,278 received abortions contrasted with only 977 adoption referrals and 7,021 prenatal care clients. Since 1977 (the first year for which data is available), Planned Parenthood has conducted 5,493,960 abortions. Finally, new evidence has shown that Planned Parenthood employees are also willing to cover up sex trafficking.
- Saves the D.C. School Choice Program. The DC Opportunity Scholarship Program (DC OSP) is a successful program that is publicly supported by six members of the D.C. City Council and three former D.C. mayors, in addition to the 74% of D.C. residents who support the program’s reauthorization. For seven years the DC OSP has empowered low-income parents to choose the best learning environment for their children, giving their children an opportunity to a quality education while the District of Columbia takes steps to reform its public schools. Funding to allow new students into the program was included in H.R. 1, the long-term CR passed by the House in February. The agreement ensures the continuation of the three-sector approach to education reform by reauthorizing the DC OSP and providing equal funding for school improvement for D.C. public schools and public charter schools.
- Reforms the Pell Grant Program. The agreement reforms the Pell Grant program by eliminating year-round Pell, helping to ensure the program’s solvency not only for the remainder of this fiscal year but for years to come. Currently, the program faces a shortfall of $8 billion this year alone. In FY 2011, elimination of year-round Pell saves almost $800 million in both discretionary and mandatory dollars. Over the next ten years, this reform will save the program more than $35 billion.
- Reduces Congress’ Own Budget. The agreement cuts the Legislative Branch by $103 million over last year’s level. Of this amount, funding for the U.S. of Representatives is reduced by $55 million.
- Returns Power for Wildlife Management from Federal Government to Western States. In spite of the fact that wolf populations in the Northern Rocky Mountains have vastly exceeded recovery goals put into place in the 1990’s, and the determination by the U.S. Fish and Wildlife Service (FWS) that they are fully recovered and should be removed from the endangered species list, a district court ruling in Montana relisted the entire population in August 2010. The language in the agreement reinstates the FWS original determination to delist wolves in states with approved management plans in place. It returns management of wolf populations in Idaho, Montana, Oregon, Washington, and Utah to the states. The language also allows negotiations between the State of Wyoming and the Department of Interior to continue so that the entire population can be delisted.