Last week Senator Charles Schumer (D-NY) made news by proposing a “reset” of FY11 appropriations negotiations. He suggested substituting savings from Medicare and Medicaid and tax increases for the cuts being negotiated in discretionary spending.
Congress appears to be on track to enact this week another short-term extension to prevent the government from shutting down. This three week continuing resolution (CR) would, according to the House Appropriations Committee, cut another $6 billion in spending.
The Schumer Maneuver
Senator Schumer is focusing on the aggregate amount of budgetary savings proposed by Republicans. He points out that any given amount of deficit reduction is easier to achieve if you start discussions with a larger share of the total budget pie.
Ongoing CR negotiations are about how and how much to cut from the projected $663 B of nondefense discretionary spending this year. This encompasses much of what we think of as the federal government, including everything from the FBI, federal prisons, Homeland Security, health research, most education spending, the FDA, most foreign aid, financial regulators, national parks and the Environmental Protection Agency, the Labor Department, a lot of veterans’ spending, and a lot of our transportation infrastructure spending.
