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Now That Congress Has Passed the Omnibus Spending Bill, What’s In It?

The $1.1 trillion omnibus spending bill that was rammed through Congress last week is the latest in a series of massive federal laws that are negotiated in secret, debated scarcely at all, and voted on without being read. Republicans on the Senate Budget Committee were studying the spending bill even as it was being enacted, and have published an excellent top-line analysis of the legislation here. If, like most voters, you have only a vague sense of where the federal budget has been heading in recent years, this is a great place to start:

The omnibus is the denouement of the Ryan-Murray spending agreement reached last month. That agreement provided for a roughly $64 billion increase in the discretionary spending caps in 2014 and 2015, split equally between defense and nondefense.

Which illustrates, for the umpteenth time, a point I have made over and over: budget/spending deals that purport to dictate spending many years into the future are a joke. No Congress can bind a future Congress. When a Congressman tells you that a purported ten-year deal cuts spending in the “out years,” grab your wallet and run. The out years never come.

Because the defense cap was lower in 2014 under the original Budget Control Act, defense spending does not meaningfully increase from 2013 enacted levels. Nondefense spending, however, receives an increase that is 10 times larger than defense. The 5 percent rate of growth of nondefense spending is almost three times the projected 1.7 percent rate of inflation (see table below).

Spending Chart 02

So the Murray-Ryan deal was all about increasing non-defense spending. These numbers tell the story of what has happened to federal discretionary spending during the Obama administration:

Since 2008, the last full-year appropriations signed by President Bush, defense spending has increased by 4.2 percent but nondefense spending has increased by 13.4 percent, compared with inflation of 10.2 percent. After adjusting for inflation, defense spending in the omnibus reflects a 5.4 cut under this administration, while inflation-adjusted nondefense spending increases by 2.9 percent.

No surprise there: Democratic Congresses and administrations always try to cut defense spending and replace it with social spending. The Budget Committee analysis quantifies the extent to which the Democrats have succeeded in that effort during the last five years.

The analysis goes on to break down discretionary spending by department, highlighting some of the major programs operated by each and what spending on those programs will be under the new legislation. This is extremely interesting stuff, if you want to delve into the budget in more detail.

The other point that emerges from these spending numbers is that discretionary spending is relentlessly being squeezed out by entitlements. The real constraint on the growth of both defense and non-defense discretionary spending is the explosion in entitlements–Medicare, Medicaid, Social Security and now Obamacare. With the Democrats vowing to fight to the last ditch to resist any sort of entitlement reform, and with federal debt having risen to more than $17 trillion–another budget-crusher as soon as interest rates rise again–there is simply no money for the social spending boondoggles that the Democrats would dearly love to finance. I suppose we should count our blessings.

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