Paul Ryan Sets Spending Levels for FY 2011

Earlier today, Rep. Paul Ryan (R-WI), the chair of the House Budget Committee, unveiled new levels for discretionary spending for the remainder of FY 2011. Chairman Ryan was provided this unique authority by the House rules enacted earlier this year and received further guidance from a House Resolution calling for him to set spending targets in line with FY 2008 levels in accordance with the GOP A Pledge to America. This would save $35 billion for the remainder of the fiscal year as the current CR that the government is operating under expires March 4th. Within that savings, there is an additional $7.7 billion in security spending, meaning that in order to achieve the $35 billion target, $42.7 billion in non-security, non-defense spending must be cut from the discretionary budget.

 (Billions) FY 2010 President's 2011 Appropriations Appropriations 302(b)s less:
Non-Defense/Non-Security Enacted Request 302(b)s 2010 Request 2011 Request
Agriculture, Rural Development, FDA 23 23 20 -3 -3  -14% -13%
Commerce, Justice, Science 64 61 54 -10 -6 -16%  -11%
Energy and Water Development 33 35 30 -3 -5  -10% -15%
Financial Services and General Government 24 25 21 -3 -4  -13% -16%
Interior, Environment 32 32 30 -3 -3  -8% -9%
Labor, Health and Human Services, Education 164 171 157 -7 -14  -4% -8%
Legislative Branch 5 5 5 ** -1  -2% -11%
State, Foreign Operations 50 57 47 -2 -10  -4% -17%
Transportation, HUD 68 69 56 -11 -12  -17% -18%
Domestic and International Spending (Subtotal) 462 478 420 -43 -58 -9%  -12%
Defense, Security, and Veterans Spending              
Defense 508 531 518 10 -13  2% -2%
Homeland Security 43 45 43 ** -1  0% -3%
Military Construction, Veterans Affairs 77 76 75 -2 -1  -3% -2%
Security Spending, Subtotal 627 651 635 8 -16  1% -2%
Total, Regular Discretionary 1,090 1,128 1,055 -35 -74  -3% -7%

* Numbers rounded to the nearest billion. Totals may not compute due to rounding.

** Number is negligible

House Appropriations Committee Chair Harold Rogers (R-KY) quickly took the hand-off from Chairman Ryan and set spending levels that each of his subcommittees will have to follow, as detailed by the previous table. House leaders announced that the chamber will vote on a a FY 2011 funding bill based on the new spending levels the week of February 14th, the same week that President Obama is expected to release his FY 2012 budget request. The confluence of events underscores how dysfunctional our budget process has become -- with Washington considering the federal budget for 2011 and 2012 in the same week. A bill was introduced in the Senate just last week to move to biennial budgeting, looks like we are already going in that direction by default. The need to overhaul the budget process is clear. The Peterson-Pew Commission on Budget Reform offered recommendations in the report, Getting Back in the Black.

The House spending bill will no doubt find opposition in the closely-divided Senate. The current stop-gap measure funding the government expires on March 4, and Congress must agree on either a spending bill that covers the rest of this fiscal year or another short-term fix by then.

Although the spending reductions announced today will set off a great deal of debate on Capitol Hill, this will only be the opening round. While implementing restraint on discretionary spending is a critical element of fiscal reform, we will also have to take a hard look at other parts of the budget like revenues, entitlement spending, defense spending, and spending through the tax code.

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