Briefing Book

Constructing the Security State

Forget about deficit reduction: Every penny of discretionary spending cuts will be going toward building a bigger military.

By Robert Gordon

Tagged Briefing BookbudgetDodd-FrankMilitary

Many of the Trump Administration’s ambitious are likely to die in Congress. Corporate tax reform, Obamacare repeal, and an infrastructure bill all look less likely they did a month ago.

But there will be a federal budget. And today the President shared his ambitions for discretionary spending, the portion of the budget that Congress approves each year. At CPAC, White House adviser Steve Bannon talked about “the deconstruction of the administrative state.” The President just named its partner, the construction of the security state.

Five key points:

  • Forget about deficit reduction. Every penny of domestic discretionary spending cuts will go into the defense budget.
  • A one-year, $54 billion or 10 percent cut in domestic discretionary spending boggles the mind. As a share of the economy, domestic discretionary spending would reach the lowest level since the government started tracking these things. The President could eliminate the entire discretionary budgets of the Department of the Interior, the Department of Energy, and the Environmental Protection Agency, and still need to cut more.
  • For advocates of poverty programs and basic government functioning, it’s actually a lot worse than this. Not only will the non-defense pie be $54 billion smaller, but it will also need to accommodate spending increases. The President wants more for veterans. He wants more for law enforcement—and will probably offer a hefty increase to smooth the waters with the Federal Bureau of Investigation. His aggression against immigrants has massive costs. While there is talk of a supplemental spending bill for the wall, that “supp” won’t cover all the enforcement needs that the President has now manufactured. All these spending increases mean that other nonsecurity spending—poor children, research & development, white-collar enforcement—will be cut even more.
  • While the scope of the cuts is new, the strategy—hobbling government for its own sake—is a continuation of Congress’s approach in the Obama Administration. During the grand bargain negotiations of 2011 and 2012, John Boehner and Mitch McConnell could have gotten deficit reduction and entitlement cuts had they been willing to accept tax increases. They weren’t. What they achieved instead were tight caps on annual appropriations. While this spending accounts for just 16 percent of the budget, it provides the vast majority of the money that keeps the government going. Tight caps in turn allowed conservatives to cut deep into programs they did not like. Underfunding of Affordable Care Act administration contributed to the website debacle in 2013. The IRS’s budget is already down by 17 percent since 2010, transferring billions from taxpayers to tax evaders. At one point, a key agency funding Dodd-Frank financial reform was funded by $100 million less than the request. And this was all under Obama.
  • By this date in 2008, Congress had delivered a 134-page budget blueprint to Congress. Donald Trump has apparently issued a nonpublic memo to agencies. The budget process takes time, and the slow pace is a small but meaningful consolation for his opponents.

We now await the specifics. I have great admiration for the career staff of OMB, but there is no amount of evidence-based policy that will make these cuts look anything less than devastating.

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Robert Gordon served as acting deputy director at the Office of Management and Budget under President Obama.

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