US budget priorities and cuts that hurt

While the fight over 2011 spending will finally get put to rest this week, another one, the battle for 2012, is only just beginning.

Last Friday, just before the midnight deadline to avoid a partial shutdown of the US government, Democrats and Republicans declared victory. 

They agreed to cut $38.5bn from the $3.8 trillion budget.

But it has taken until Tuesday for the deal to be drafted into a piece of legislation for the public to know which programmes are going to be cut.

The biggest cuts are from education, labour and health programmes – they’ll lose $5.5bn in funding.

Homeland Security loses $784m, and nearly $200m will be cut from international food assistance. Foreign aid is mostly frozen at last year’s spending levels.   

The mayor of Washington was arrested while protesting against the budget cuts proposed by Congress.

The federal government has authority over Washington, meaning the local community has to accept Congress’ rules.

Among the most contentious cuts for the nation’s capital are the proposal to eliminate funding for abortions and block money for a needle exchange programme to combat the spread of HIV.    

But despite the talk from deficit hawks that the US economy won’t recover unless massive spending cuts are enacted, some programmes get an increase in funding.

The defense department will get a $5bn increase from last year, while President Obama’s signature education reform plan gets $700m in new funding. 

A number of conservative Republicans have already said they’ll vote against the bill because it doesn’t cut enough. 
Some liberal Democrats say they’re unhappy with the deal because it cuts too much from programmes meant to help the most vulnerable citizens.

But it’s expected to be debated in the coming days and pass later this week, six months after Congress was supposed to have enacted a budget. 

On Wednesday, Obama will unveil his long-term plan to reduce the deficit and deal with the rising cost of social safety nets like assistance to the elderly and healthcare for the poor.

Those entitlement programmes make up half of the federal budget and are popular with the American public.

White House press secretary Jay Carney said Obama “will very clearly lay out his vision for deficit reduction – the need for it to be balanced the need for it to be bipartisan the need for it to address the long-term drivers of our debt and for everyone to share in the burden of bringing our fiscal house into order”.

Whether Obama will provide the specifics of how he intends to do this or merely lay out the broad strokes of a plan remains to be seen.

Congress didn’t wield the budget knife against the biggest social safety net programmes this year, though many analysts say significant deficit reduction won’t happen until those programmes are dealt with. 

Republicans have proposed entitlement reform as part of their 2012 budget.

So while the fight over the 2011 spending will finally get put to rest this week, another one, the battle for 2012, is only just beginning.

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