US Congress debates $4bn stopgap budget cuts

THE HOUSE of Representatives will today begin debate on a stopgap continuing resolution that would postpone a government shutdown…

THE HOUSE of Representatives will today begin debate on a stopgap continuing resolution that would postpone a government shutdown for at least two weeks.

The plan, as proposed by Republicans on Friday night, would cut $4 billion (€2.9 billion) from the federal budget for the period from March 4th until March 18th.

Democrats initially opposed the Bill, until Republicans made it clear that the cuts were those advocated by President Barack Obama.

$2.7 billion are “earmarks” – pet projects proposed by a sole Congressman to bring federal funds to his district. The other $1.7 billion are cuts proposed by Mr Obama in his draft budget for 2012.

READ MORE

The programme cuts would merely start sooner than Mr Obama suggested. They would include $650 million from the Federal Highways Administration; $468 million for department of education programmes that are considered inefficient or redundant; and a host of smaller snips such as $30 million for the maintenance of a building at the Smithsonian Institution which is funded by private donors, or $29 million for high-speed internet for farmers.

Senate Democrats, who would have to approve the Bill before the continuing resolution expires at midnight on Friday to avoid a shutdown, gave it a cautious welcome. But some want a longer-term Bill to fund government until the end of the fiscal year on September 30th. Otherwise, the budget dispute will monopolise US politics for the next six months, with a crisis each time a short-term resolution expires, as well as over raising the debt ceiling in April and passing a budget for next year.

The budget adopted by House Republicans on February 19th would slash $61 billion in government spending over the next six months. Democrats say the cuts would kill the fragile recovery.

Egged on by freshman Tea Party members who were elected last November, the Republicans have decided to make the Democrats swallow their plan piecemeal. “If they won’t eat the whole loaf at one time, we’ll make them eat it one slice at a time,” John Boehner, the Speaker of the House, said in a speech to religious broadcasters on Sunday.

Democrats were heartened by a report released by Moody’s Analytics which said the Republican plan would slow economic growth by half a percentage point this year, resulting in 700,000 fewer jobs. The conclusions of the report were similar to those reached by Goldman Sachs last week.

The resolution being debated today makes the easy cuts first. It is difficult to see how Republicans and Democrats will find middle ground on the remaining $57 million demanded by Republicans.

Proposed cuts in, for example, Planned Parenthood, Head Start (for poor schoolchildren) and public broadcasting do little to diminish deficit spending, but destroy programmes that are loathed by the right.

"The real goal," wrote New York Timescolumnist Frank Rich, "is to reward the GOP's wealthiest patrons by crippling what remains of organised labour, by wrecking the government agencies charged with regulating and policing corporations, and, as always, by rewarding the wealthiest with more tax breaks."