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05Mar

New Budget Deal Needed to Avert Cuts, Invest in National Priorities

Center for Budget and Policy Priorities 

Unless Congress and the President reach a new budget agreement, both non-defense and defense discretionary program areas will face deep cuts in 2020 and 2021, forced by tight funding limits and additional cuts (known as “sequestration”) mandated by the 2011 Budget Control Act (BCA). The most recent bipartisan budget agreement, which covered fiscal years 2018 and 2019, provides a model for a new agreement; it eliminated the sequestration cuts on discretionary programs and provided additional resources for new investments in key priority areas.

Without an agreement, overall funding would revert to the BCA levels. Under the BCA, fiscal year 2020 funding for non-defense discretionary (NDD) programs — which include a wide variety of areas such as education, scientific research, infrastructure, national parks and forests, environmental protection, law enforcement, public health, veterans’ health care, and homeland security — would be $55 billion below the 2019 level before adjusting for inflation. NDD programs on average would have to be cut 11 percent in 2020 after adjusting for inflation. Defense would be cut deeply as well: $71 billion below the 2019 level, which after accounting for inflation would mean a 13 percent cut, on average, for defense programs.

Since 2013, Congress and the President have enacted a series of temporary bipartisan budget agreements, generally covering two years at a time, that ameliorated the BCA’s sequestration cuts. The agreements reached prior to the most recent deal scaled back, but did not eliminate, the sequestration cuts. Partly as a result, funding for NDD programs for 2011-2017 was cut substantially below 2010 levels adjusted for inflation. Over that seven-year period, NDD funding was cut by roughly $400 billion compared with what these programs would have received over that period if funding had maintained its 2010 inflation-adjusted level.

The budget agreement that Congress and the President reached for 2018 and 2019 both fully eliminated the BCA’s sequestration cuts to defense and non-defense discretionary programs and provided new resources for defense and NDD, a step toward reversing the disinvestment of the prior seven years. This agreement paved the way for a significant increase for child care, new resources to address the opioid epidemic, key infrastructure needs ranging from public housing and national park modernization to clean water projects, and resources for other needs.

In setting funding levels for the next two years, policymakers should build on the progress in addressing underfunded areas they made under the most recent budget agreement and provide adequate resources for several areas that face pressing new or unique funding needs in 2020. This includes implementing the 2018 Mission Act, which expands health services provided outside of Veterans Affairs (VA) health facilities and requires increased resources, and funding the 2020 decennial census.

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