Measure To Lower Spending Caps Advances

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A House panel last week approved changes in budgetary rules that would force Congress to severely curtail spending on domestic discretionary programs, including education.

On a party-line vote of 24 to 11, the House Budget Committee passed HR 1219, which would amend the Budget Enforcement Act of 1990. That law--which embodied a budget agreement between the Bush Administration and Congress, then led by Democrats--enacted spending caps for domestic discretionary spending and required that any entitlement or tax-law changes that increase the deficit be offset by entitlement cuts or tax increases.

HR 1219 would reduce the spending caps by $100 billion over five years and would extend the caps to fiscal year 2000. They were set to expire in fiscal 1998.

For example, the cap for fiscal 1996, which is $525 billion, would drop to $503 billion under the proposal. The cap for fiscal 1998 would be $489 billion under HR 1219, compared with $511 billion. The cap for fiscal 2000 would be set at $492 billion.

At the same time, HR 1219 would alter the B.E.A. to allow cuts in domestic discretionary programs to help finance entitlement or tax-law changes--thereby making the $100 billion in savings available to help pay for the $189 billion tax-cut proposal passed by the House Ways and Means Committee last week.

"We will pay for our tax relief for American families and grow the economy," said Rep. John R. Kasich, R-Ohio, the chairman of the budget committee.

But Rep. Martin Olav Sabo, D-Minn., the panel's ranking Democrat, offered a different view. "Clearly it's a tax cut geared to the most affluent in the country," he said. "And the cuts go on and on--to the vulnerable, to the low-income, hard-working people."

More To Come

In addition to the savings that would result from tightening the spending caps, the bill would save another $25.2 billion with a variety of cost-cutting measures.

Mr. Kasich boasted of a total of $281.2 billion in savings over five years, adding in $65 billion in savings over five years from the proposed welfare-reform bill passed by the House--which includes a school-nutrition block grant--and another $91 billion that he said would be saved by discontinuing automatic inflationary increases for discretionary programs.

However, while the budget and appropriations panels have traditionally worked from projections prepared by the Congressional Budget Office that estimate what programs would need to continue at the same service level, Congress sets actual spending levels, and inflationary increases are not granted automatically.

Mr. Kasich added that the committee's majority plans to "come back in May, and we're going to lower the caps even further."

The ultimate effect of the proposed legislation remains unclear, however, given the fact that it would have to be approved by the Senate and signed by the President--and some observers predicted that the Senate would not even act on it.

Nevertheless, education advocates said the committee's action on HR 1219--along with a $17.1 billion rescissions bill passed by the House last week--may foreshadow deep cuts in education programs. (See related story.)

"The bad news is essentially they've ratcheted down the spending levels in anticipation of further cuts,"(See Education Funding. "This will give them a good, clear map of what they want to do."

Proposed Cuts

HR 1219 would not make specific program cuts, but would decrease the total amount available to appropriations committees, which earmark funds for particular programs. But in an effort to demonstrate that the $100 billion in cuts can be found, the Budget Committee offered some suggestions, including:

  • Freezing annual spending for the Goals 2000: Educate America Act at $229 million, for the School-to-Work Opportunities Act at $112 million, and for the trio program at $452 million.
  • Eliminating $9.3 billion in spending on job-training and employment programs over five years, essentially locking in cuts the rescissions bill approved by the House would make for the current fiscal year.
  • Reducing spending on vocational and adult education by $906 million over five years.
  • Slicing $214 million over five years from education research programs, $163 million from library programs, and $349 million from student financial aid and other higher-education programs.
  • Limiting the Corporation for National and Community Service to 25,000 participants yearly, for a five-year savings of $681 million.
  • Eliminating four bilingual-education programs for a five-year savings of $150 million.

Vol. 14, Issue 26

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