The 10-year budget bill passed by Congress last month may force Congress to make steep cuts in conservation programs in the coming years.
Congress in April passed a budget resolution that permits it to cut taxes by $1.3 trillion through 2013. The budget resolution also seeks to balance the federal budget by 2012 and increase defense spending by $208 billion between the 2004 fiscal year, which begins in October, and 2013.
That will force appropriators to cut spending for domestic programs, including funds for federal environmental agencies like the EPA and the Department of the Interior, by $168 billion from previous projections over the next 10 years, according to budget experts.
“Most of the cuts are postponed until the future. But when the bill for the tax cut finally comes due, the bill will be significant,” said Wesley Warren, a budget expert for the Natural Resources Defense Council.
“Sooner or later we’re going to have to make substantial cuts in water pollution prevention, land preservation and maintenance funding for national parks—all of which President Bush pledged to fully fund.”
Such cuts could challenge efforts by the Bay region to secure significant new federal funding to help pay for Chesapeake restoration efforts, which have been estimated to cost more than $18 billion through the end of the decade.
Although Congress has passed a number of bills which “authorize” spending on various Bay-related activities, actual appropriations often fall short of those levels—if any are made at all. For instance, the EPA’s Bay Program Office is authorized to receive up to $40 million annually, but actual appropriations are typically only half that amount.
The anticipated cuts in federal spending will begin immediately but will largely be felt after 2008, according to the 10-year spending blueprint. The budget bill proposes modest cuts in the next few years, “but appropriators are already wringing their hands over the cuts they will have to make this year,” Warren said. “It will only get harder.”
How the cuts would be distributed across the broad range of “discretionary” programs—which includes federal funding for everything from education to veterans to wastewater treatment plants—remains up to the handful of Congressional appropriators who will divide the shrinking spending pie among 13 appropriations subcommittees.
“As they sink in over time, the true consequences of the tax cuts and growing deficits will be less money for everyone,” Warren said. “Even though Congress has not embraced the president’s proposed cuts in fiscal year 2004 for pollution control, energy conservation, land preservation, they adopted, by implication, those kinds of cuts in the future. They dodged the bullet this year by postponing these cuts until the future.”
Budget watchdogs warn that federal environmental agencies will face tough competition from agencies like the new Department of Homeland Security.
“The reduction in such programs would be equal to 2 percent in 2004, rising to 7.3 percent by 2013,” said Joel Friedman, a budget policy expert for the Center on Budget and Policy Priorities in Washington, D.C. “Since some areas of domestic discretionary spending are virtually certain to increase—such as spending for homeland security—other areas would need to be reduced by larger percentages.”
The budget blueprint anticipates that funding for environmental programs—called the Function 300 Account in the budget—would fall by about 10 percent by the end of the 10-year period, Warren said. But, those allocations are not binding upon appropriators.
So-called “mandatory spending” provided in the 2002 Farm Bill for U.S. Department of Agriculture conservation programs would theoretically be spared under the budget blueprint. But, appropriators would still be free to cut “mandatory” funds for popular USDA conservation programs to avoid making painful cuts in “discretionary” programs that fund technical assistance to farmers, help farmers market their products overseas or provide research dollars to local universities.
The scope of the cuts will largely depend upon the ultimate size of the tax cut, which will be debated this summer.
The Republican-dominated House was expected to support the $726 million tax cut, which President Bush believes will spur long-term economic growth.
But, Republican moderates in the House, led by Reps. Mike Castle, R-DE, and Amo Houghton, R-NY, successfully bucked House leaders seeking a large tax cut. House Speaker Dennis Hastert, R-IL, conceded that the House may only be able to muster enough votes for a $550 million tax cut.
The fate of the tax cut is even less clear in the closely divided Senate.
The budget bill passed last month included special budget “reconciliation” rules designed to prevent tax cut opponents in the Senate from using a filibuster to defeat the tax cut. Under normal Senate rules, 60 senators must vote to cut off debate and end a filibuster. But, the budget bill included rules that allow 51 senators to approve a tax cut as big as $550 billion. A tax cut greater than $550 billion could still be subject to a filibuster.
For the moment, four Republicans— Sens. Olympia Snowe, R-ME, John McCain, R-AZ, Lincoln Chafee, R-RI, and George Voinovich. R-OH—and the chairman of the Senate committee that will write the tax measure have pledged to oppose a tax cut greater than $350 billion.
But, President Bush and his cabinet members fanned out across the country in the last few weeks of April to press for a larger tax cut. In particular, administration officials will be making several visits to states where moderate Republicans have sought smaller tax cuts.
And, the ultimate shape of the tax cuts remain unclear as well—while Republicans prefer a tax cut on stock dividends, Democrats prefer tax cuts designed to help the unemployed. Some environmental groups would like to see some cuts spur new investments in energy conservation and land preservation.
“This administration acts as if deficits don’t matter in any year or any amount,” said Richard Kogan, a budget policy expert for the Center on Budget and Policy Priorities. “But, ultimately, declining revenues will mean declining spending, and ultimately that is what will happen.”