Here’s a link to the full text of the "budget deal" that was recently passed:
http://www.rules.house.gov/Media/file/P … 16_xml.pdf
It’s 74 pages. I’ve read it all. Here’s my summary of what’s actually in it.
Note that as is often the case with legislation, a lot of it inserts paragraphs (or modifies paragraphs/lines/clauses) in existing parts of the US Code, and without looking at (and reading large swaths of) the modified law(s), the full consequences of a change can be hard to determine. Indeed, sometimes an "edit" in a new bill can look innocuous by itself, but contain sneaky side effects once it takes its place in part(s) of the full US Code. I haven’t looked for these, I’ve just read the current bill and presumed it doesn’t have unintended (or intended) consequences that aren’t fully apparent.
Also, some of the new bill invokes arcane accounting messiness that is already part of the existing US Code with regard to the budget process, so unless one is very familiar with that process (I’m not) it can be hard to tell what really is and isn’t affected with regard to some of the new bill.
That said, let’s look at what the "Budget Control Act of 2011" says.
Page 1: Title and table of contents.
Page 2: Severability clause. Congress declares that if any part of this Act is declared unconstitutional, their intent is that the rest shall be allowed to stand. I think that’s a bad idea with legislation like this (because it can disrupt checks and balances built into the Act), but there you have it.
Page 2: "TITLE I—TEN-YEAR DISCRETIONARY CAPS WITH SEQUESTER"
This is one of the parts that has the "automatic" cutbacks if they go over the spending caps. Of course, they can always redefine the caps if they get weak-kneed, and the following link says that that’s pretty much what’s been done ever since the 1985 Gramm-Rudman-Hollings act was passed with similar caps/cutbacks, which negates what was supposed to be the "teeth" in Gramm-Rudman-Hollings:
The current Act has the same weakness, of course. The above link is also worth reading because it defines what Congress means by "Sequester"/"Sequestration", terms that are used a lot in the recently passed Act. It means to cause "automatic" spending cuts, which again, isn’t new with the current act, that was supposed to happen ever since the 1985 GRH bill. It remains to be seen whether Congress just dodges its own limits like they’ve been doing since 1985. Finally, the above link also points out that the cuts aren’t really all-encompassing, they only affect whatever Congress hasn’t exempted from sequestered cuts, like it has with Social Security, Welfare, Unemployment, Medicare, Medicaid, and interest on the national debt (the so-called "mandatory" as opposed to "discretionary" items).
Still on page 2: 15 days after a session of Congress adjourns (once a year, basically):
ELIMINATING A BREACH.—Each non-exempt account within a category shall be reduced by a dollar amount calculated by multiplying the enacted level of sequestrable budgetary resources in that account at that time by the uniform percentage necessary to eliminate a breach within that category.
Um… Several ambiguous terms there, but it sounds as if each budget line items in a ‘"category" will be cut back (after the spending has been done for the year??) to match whatever that "category" was actually budgeted. See budget categories here:
http://en.wikipedia.org/wiki/2010_Unite … ral_budget
It doesn’t sound as if there will be an across-the-board X% cut if spending as a whole goes X% over budget, instead every "category" is going to be made to live within its own means.
Also note the gotcha in the term "non-exempt account" — I presume it means just the "discretionary" budget items, not the "mandatory" ones, plus there may be "exempt" subcategories ("accounts") within even a discretionary "category".
This also doesn’t sound like it would kick in if tax revenues failed to meet expectations and the feds didn’t have enough money to prevent blowing the debt ceiling, it just sounds like capping the actual *spending* on budget items to what was actually budgeted to be *spent*. Actual debt limit blowouts are covered below.
Page 3: Apparently the President can at his own discretion exempt certain military spending (due to pre-existing legislation), this page says that if he does, the shortfall will be taken from the rest of the Defense budget to even things out.
Pages 3-4: Clauses about how partial-year budget items or budget modifications partway through the year are not exempt from the original annual budget caps, basically, they still count as additional spending.
Pages 4-8: OMB and CBO will be used as arbiters of budget balances, etc.
Pages 8-14: Contingency exemptions for national emergencies, disasters, up to a billion or so in Social Security tweaks, etc.
Pages 14-15: Setting a "discretionary spending limit" — this is the amount that can be spent in total on all "discretionary" budget categories (um, what, no limit on non-discretionary "mandatory" spending?):
2012 fiscal year "security category" spending limit is $684B. (Military, homeland security, etc.)
2012 fiscal year "nonsecurity category" spending limit is $359B. (All other "discretionary" spending)
2013 fiscal year "security category" spending limit is $686B.
2013 fiscal year "nonsecurity category" spending limit is $361B.
2014 fiscal year discretionary spending limit is $1.066T.
2015 fiscal year discretionary spending limit is $1.086T.
2021 fiscal year discretionary spending limit is $1.234T.
Pages 15-27: Definitions, tweaks to existing (now outdated) budget law, revisions to rules of House/Senate that try to prevent passing budget/law changes that simply ignore the caps, etc.
In short, this "title" section of the Act puts limits on discretionary spending for the next ten years.
…unless a future Congress sets them to something else or removes them.
Also, these all change if the "deficit reduction commission" fails, see below.
Pages 27-30: "TITLE II—VOTE ON THE BALANCED BUDGET AMENDMENT"
Between September 30 and December 31 of this year, the House and Senate have to vote on a joint resolution entitled "Joint resolution proposing a balanced budget amendment to the Constitution of the United States".
They don’t have to pass it. If it fails to pass, they don’t have to change it and try to pass it again. They don’t have to make a real effort to pass it or write it in such a way that it has a chance of passing. They don’t even have to make it a balanced budget amendment. All they have to do is give *something*, anything, maybe a pay raise for themselves, the title specified above, and vote on it. Period.
Pages 30-43: "TITLE III—DEBT CEILING DISAPPROVAL PROCESS"
Contrary to the implication of the title, this is where they raise the debt ceiling. In fact, they give Obama the power to raise the debt ceiling (within limits)
They do however give Congress the ability to deny a debt ceiling request.
1. Before December 31, 2011, Obama (or whoever happens to be President in December ) can submit a written certification that the national debt (actually, "debt subject to limit" ) is within $0.1T of the current debt limit (i.e. about to blow the debt cap), and this authorizes the Treasury to borrow an additional $0.9T. This triggers an immediate $0.4T bump in the debt limit, with the remaining $0.5T left hanging, pending Congressional approval/disapproval/apathy.
Congress can vote to deny the additional $0.5T, or let it slide. If they vote to deny it, the President can veto their denial, and Congress has the option to override the veto if they can, same as any other Congressional action.
2. If after the above occurs, the President may later (no time limit) submit another written certification that the national debt is within $0.1T of the new debt limit, and authorize Treasury to borrow an additional amount, as follows:
a) $1.2T, or
b) $1.5T if a balanced budget amendment has actually been handed to the states to ratify, or
c) however much the "commission" proposal (see below) includes in deficit reduction if their proposal is passed by Congress (but not to exceed $1.5T if the balanced budget amendment fails in Congress).
Congress can also vote to disapprove this Presidential debt limit increase.
Pages 43-51: "SEC. 302. ENFORCEMENT OF BUDGET GOAL"
If the commission fails to recommend $1.2T+ in deficit reduction, or Congress fails to enact those recommendations by January 15, 2012, the discretionary spending limits specified above (see the summary of pages 14-15) will be automatically changed to the following limits:
2012 (remains the same)
2013 fiscal year "security category" spending limit is $546B (was $686B).
2013 fiscal year "nonsecurity category" spending limit is $501B (was $361B).
(Total remains at $1.047T)
2014 fiscal year "security category" spending limit is $556B.
2014 fiscal year "nonsecurity category" spending limit is $510B.
(was $1.066T total with no category limits, new total is still $1.066T)
2015 fiscal year "security category" spending limit is $566B.
2015 fiscal year "nonsecurity category" spending limit is $520B.
(was $1.086T total with no category limits, new total is still $1.086T)
2021 fiscal year "security category" spending limit is $644B.
2021 fiscal year "nonsecurity category" spending limit is $590B.
(was $1.234T total with no category limits, new total is still $1.234T)
Note that the total spending remains the same, but that if Congress fails to meet the "$1.2T in deficit reduction (which may be achieved via tax increases)" goal by passing the commission’s recommendations (presuming the commission can even agree to such), defense spending takes in the shorts and is drastically reduced, while "domestic" spending gets to go on a spending spree with what used to be the military’s money.
Note that Obama’s own 2010 budget allocated about $700B to the "security category" — the recent budget deal allocated $686B, but if the "$1.2 trillion in deficit reduction" fail to materialize, the "security category" gets slashed to $556B, while the "non-security category" (largest subcategories being Health and Human Services, Department of Transportation, HUD, etc.) get a windfall of the $130B slashed from defense.
Who approved this bullshit? Why is the military the only one that gets [screwed] if Congress can’t agree on $1.2T in deficit reduction, while total spending remains the same and "social services" get a big 39% pay raise?
[EDIT TO ADD: There are also spending cuts applied across the board, including to mandatory spending, if Congress fails to achieve the $1.2T in deficit reduction by December -- see post farther down in this thread.]
Guess who’s going to be lobbying the shit out of Congress to NOT pass the $1.2T in deficit reduction?
And if Reid/Pelosi pack the Commission with six military-hating, welfare-loving Democrats, they can block any $1.2T deal right there, [screwing] the military and giving a big boon to domestic "discretionary spending". Whee.
Page 52-71: "TITLE IV—JOINT SELECT COMMITTEE ON DEFICIT REDUCTION"
Creates a 12-person
Gosudarstvenniy Komitet po Planirovaniyu Joint Select Committee, tasked with creating a five-year-plan draft legislation that allegedly reduces the deficit by a total of at least $1.2T over the next ten years.
Consists of 3 people appointed by Harry Reid, 3 people appointed by Nancy Pelosi, 3 people appointed by John Bohner, and 3 people appointed by Mitch McConnell.
The JSC will (in theory) craft the actual US Code changes which, if implemented by Congress, would reduced the deficit by a total of $1.2T+ over the next ten years. They must accomplish this by November 23, 2011, passing it by majority vote, or else the whole effort gets scrapped.
If they actually do pass it, Congress is obligated to do an up-or-down vote on it by December 23, 2011, but if it fails, it is scrapped, and the above-mentioned "[screw] the military" limits kick in.
If they do pass it, the "savings" aren’t used to pay off the debt, Obama is free to raise the debt limit even further by an equal amount and spend it all.
As I read the Act, if the JSC/Congress act to reduce the deficit by say $1.5T over the next ten years, Obama is allowed to raise the debt limit $1.5T THIS year, and he and the Dems can spend that much more THIS year, that much more NEXT year, that much more the year AFTER, etc…
Actually, they’d be allowed to spend TWICE that much, since the "savings" give them that much more they can spend without hitting the current debt limit, *and* allow Obama to raise the debt limit by an equal amount and they can spend *that* too.
Note, by the way, that the "$1.2T+ in deficit reduction over 10 years" can be achieved entirely by tax increases — there’s nothing in this section of the Act which requires a dime of spending cuts.
And, of course, they can play the usual game of "spend more now, pack ‘deficit reduction’ into years 7-10, which future Congresses will never actually follow when *they* sit down to make *their* future budgets".
Pages 71-74: "TITLE V—PELL GRANT AND STUDENT LOAN PROGRAM CHANGES"
Authorizing the spending of $10 billion more on pell grants, removal of "interest subsidized loans" to "professional students", and termination of "direct loan repayment incentives" (wait, what?)
And there you have it. Further analysis/comments on this thread: viewtopic.php?f=48&t=47584.
Statistics: Posted by Ichneumon — Wed Aug 03, 2011 3:09 pm