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Gen. Colin Powell told us that “sooner or later you’ve got to compromise. You’ve got to start making the compromise that arrives at a consensus and move the country forward.” Over a century earlier, James Russell Lowell observed that “compromise makes a good umbrella, but a poor roof…” Here it is mid-April and we finally have an agreement of sorts on the budget for the federal government’s fiscal year that will end on September 30th. The government will remain open for business, but the President, Congress, Republicans and Democrats remain divided.
Late last week, Congress sent President Obama legislation cutting a reported $38 billion from current federal spending (and a $78 billion reduction from the President’s proposed budget). House Speaker John Boehner (R-OH) said the cuts in domestic programs were unprecedented. The White House considered the compromise a small step on the road to dealing with soaring deficits and the $14 trillion national debt. The steps taken may be smaller than we all imagined.
Analysis of the budget cuts require the expertise of a budgetary savant, but several points are clear. The Environmental Protection Agency, took a $1.6 billion cut. Spending for community health centers was reduced by $600 million and the Community Development Block Grant program by $950 million. Money to renovate the Commerce Department building in Washington was cut by $8 million. The Appalachian Regional Commission was cut by $8 million and the National Park Service by $127 million. The Senate defeated a House-backed proposal to deny money to implement the year-old healthcare law. Also voted down was the proposal to deny federal funds to Planned Parenthood.
Was the magnitude of the compromise smoke and mirrors or is it likely to contribute to real savings? According to Congressional Budget Office, the bill produced only about $350 million in tangible savings this year (partially because reductions were offset by about $5 billion for Pentagon programs). In addition, “measured” savings to arrive at the $38 billion amount resulted from reductions in amounts that would not be spent this year but in the future. The Defense Department generated significant savings on paper by cutting reserve funds and mandatory spending programs – writing off amounts that might never be spent.
For estimating the true savings, the concept of “outlays” is important. It refers to how much an agency actually spends. Cutting back items such as “un-obligated balances” may produce an accounting savings in the billions, but it is merely restoring unused balances on the government’s ledgers
Both parties were divided on the compromise, which is not a good sign for future budgetary issues during this session of Congress. The vote in the House was 260-167. The legislation drew the support of 179 Republicans and 59 Democrats. Another 59 Republicans and 108 Democrats opposed the bill. Among the supporters were 60 of the 87 first-term Republicans, many of them elected with Tea Party support.
The Senate added its approval a short while later, 81-19, and most of the opponents were conservatives who wanted deeper cuts. A total of 48 Democrats, 32 Republicans and independent Joseph Lieberman (CT) voted in favor, while three Democrats, 15 Republicans and independent Bernie Sanders (VT) opposed the compromise. | 
