OMB Director Jack Lew offered a preview of the Obama Administration budget
for fiscal year 2012, which highlights small, unimportant trims to the
budget in an effort to tease out Republican aims. Lew rightly
highlights two large tax cuts and the recession as the culprit for the
deficits the nation faces in the long term; he forgot two wars (and the
fact that his boss helped extend those tax cuts for two more years).
But Lew will not offer more than a “down payment” on budget balancing,
with that five-year freeze on nonsecurity discretionary spending. Here
are some of the specifics:
Since they were instituted, community
service block grants have helped to support community action
organizations in cities and towns across the country. These are
grassroots groups working in poor communities, dedicated to empowering
those living there and helping them with some of life’s basic
necessities. These are the kinds of programs that President Obama worked
with when he was a community organizer, so this cut is not easy for
Yet for the past 30 years, these grants have been allocated using a
formula that does not consider how good a job the recipients are doing.
The president is proposing to cut financing for this grant program in
half, saving $350 million, and to reform the remaining half into a
competitive grant program, so that funds are spent to give communities
the most effective help.
Another difficult cut is a reduction of $125 million, or about a
quarter of current financing, to the Great Lakes Restoration Initiative,
which supports environmental cleanup and protection. And a third is a
reduction in the Community Development Block Grant program. These
flexible grants help cities and counties across the nation finance
projects in areas like housing, sewers and streets, and economic
development in low- and moderate-income neighborhoods.
While we know from mayors and county leaders how important these
grants are for their communities, and are very aware of the financial
difficulties many of them face, the sacrifices needed to begin putting
our fiscal house in order must be broadly shared, and we are proposing
to cut this program by 7.5 percent, or $300 million.
The examples given, then, are to cut community action funding,
community development block grants, and restoring the Great Lakes.
I guess my reaction is to wonder what it is you’re trying to
accomplish in the budget. Communities, particularly the nation’s inner
cities, have borne the brunt of the economic crisis. They have seen
mass unemployment erode their local budgets and leave their
infrastructure to rot. Their low-income residents have few options to
pool their voices and generate political power. Yet two of the three
programs listed for cuts are community development and community action.
I’m sure this will deflect all that criticism that Obama is a Muslim
community activist trying to funnel “slush fund” money to undeserving
people and start a race war.
This is all theoretical, of course. An Administration budget
represents an opening bid, not something that will be automatically
passed into law. The White House could highlight anything it wanted to
for cuts – Ag subsidies, corporate tax expenditures that lead to
outsourcing, literally whatever it wants. Yet there are areas of the
budget that seem to have a force field around them. Lew says the
Administration will implement the $78 billion in cuts from the Defense
Department over five years, but this only slows the growth of the
Pentagon budget (he calls it “zero real growth,” which is pretty
weaselly). He highlights investments in infrastructure, education and
innovation, but mainly as an afterthought. And, pre-empting the
catcalls from the peanut gallery about going after the real growth areas of the budget, Lew offers this paragraph:
Discretionary spending not related to
security represents just a little more than one-tenth of the entire
federal budget, so cutting solely in this area will never be enough to
address our long-term fiscal challenges. That is why President Obama
made clear in the State of the Union that he wants to work with Congress
to reform and simplify our tax code. He also called for serious
bipartisan cooperation to strengthen and protect Social Security as we
face the retirement of the baby boom generation.
And with that, Lew puts Social Security on budget in a rhetorical
sense. Social Security has had its on dedicated funding stream for the
life of the program and has not contributed one penny to the deficit in
So this is the landscape of the budget fight: one side (the
Republicans) talk a good game but don’t actually want to cut a heck of a
lot; the other side (the White House) will prioritize cuts to the
community over the corporate, even though overall the cuts are symbolic
I’m sure they can come to an accommodation.
…just to add, I’d like to see a graph of the socio-economic status of
the people who receive direct or indirect aid from the bucket of
“non-security discretionary spending” in the federal budget. I think
you’d find it poorer, less white and more urban than the rest of the