By Tila Neguse
The President’s budget for FY 2014 was released at 11:15 on April 10, 2014. FCNL is currently evaluating the budget. Read the full published budget or a short overview, and stay tuned for our reactions!
Since 2011, the budget battles over debts and deficits, revenues and spending cuts have been exhausting and accompanied by an endless array of partisan posturing in Congress with seemingly no solution in sight. A deal to avert the across the board cuts on March 1, or sequestration, was never reached and we went over the fiscal cliff. The President’s FY2014 budget, to be released this Wednesday April 10, sets the stage for the next round of deal making in this long trajectory of budget processes. A media leak last Friday on the President’s budget revealed some important yet concerning information.
President Obama’s $1.8 trillion deficit reduction package over 10 years borrows from an earlier proposal made to Speaker Boehner during initial negotiations around the fiscal cliff.
So, what should we expect in this budget Wednesday?
Medicare savings in the amount of $400 billion, achieved through additional means testing as well as reforming payments to pharmaceutical companies.
Social Security reform by adopting controversial chained CPI, an inflation based system to measure benefits. Chained CPI is concerning because it will result in lower yearly increases in payments to beneficiaries and is therefore essentially a cut in benefits. The inclusion of chained CPI in the budget has upset many progressive organizations and members of Congress.
Funds defense at an alleged $526 billion, exceeding caps as outlined by the Budget Control Act.
Overall, $600 billion in revenues, $1.2 trillion in spending cuts.
With the House and Senate budget resolutions introduced last month, so ideologically varied, the President’s budget seeks to insert itself somewhere in the middle. But this middle ground is precarious. Although there are no current plans for the House and Senate to go to conference on their budgets, perhaps, in an attempt to end the incessant partisanship in Congress and bring the two disparate chambers together, the Administration is making concessions. Negotiating disadvantageous entitlement reform (like chained CPI) in order to trade-off for revenues and Pentagon cuts in a deficit reduction package is not balanced. And certainly, the Pentagon should pay its fair share in any deficit reduction deal. Even Secretary of Defense Hagel acknowledged the reality of the $1 trillion dollar cut facing the Pentagon in his address at the National Defense University.
This Wednesday, FCNL will be watching closely to learn the details and specifics of what the President’s budget entails. Will the concessions in President Obama’s budget finally bring Democrats and Republicans to the negotiating table? If so, if a grand bargain is reached, will it be a fair and balanced one, that protects low-income and vulnerable populations, raises new revenues, and cuts the Pentagon by $1 trillion over 10 years?
The budget decisions made now will resonate for a decade.