Inouye takes hard-line position on cuts

Senate Appropriations Committee Chairman Daniel Inouye (D-Hawaii) on Thursday staked out a hard-line position on spending cuts, arguing that non-security appropriations should not be targeted in a package to raise the debt ceiling.

The move could further diminish the ability of Democrats and Republicans to find a compromise that will lead to a raising of the debt ceiling by Aug. 2, when Treasury says the country will default on its debts. 

{mosads}Inouye was a member of the deficit talks led by Vice President Biden that collapsed one week ago. Just as Republicans are insisting on no new taxes, Inouye is arguing that cuts to domestic spending are not necessary since, by his numbers, spending on them has not risen in a decade when adjusted for inflation.

“Are we really spending too much on non-defense programs? The answer is clearly no. Non-defense discretionary spending levels are essentially unchanged from 2001. There is no reason we shouldn’t be able to afford them today,” Inouye said.

“The focus of our deficit talks should not be on domestic discretionary spending, but on the real reason why we are not running a surplus: historically low revenues, soaring mandatory spending, and the cost of war,” he added.

{mosads}Inouye called for more investment in highways, rail, levees, bridges and dams. 

“In short, domestic discretionary investments are not the problem; they are in fact a vital part of the solution to our economic and fiscal challenges,” he said. 

Inouye told The Hill Thursday that there is waste that can be trimmed from domestic discretionary spending since “there is waste in everything,” but said it should not be the focus of the debt-ceiling talks.

According to an Inouye fact sheet, non-defense spending in 2001 was $369 billion and remains the same today, adjusted for inflation and 9.1 percent population growth. The inflation adjustment is $69 billion for this number and the population growth adjustment is $30 billion. Mandatory spending has increased $571 billion and revenue has dropped $496 billion.

A GOP aide said the numbers were deeply flawed and did not take stimulus spending into account. The aide said that most discretionary spending does not grow with population, so the adjustment is not tenable.

A Democratic aide defended the population adjustment.

“Today, government services are provided to 26 million more Americans than in 2001.  Clearly, there are additional costs associated with providing the same services to an additional 26 million Americans,” the aide said. “I would also note that our method does not take into account such factors as the increasing number of Senior Citizens that the government is providing services for, nor does it take into account the increased demand for services such as housing vouchers and student loans that the recession has produced. If anything, these estimates are very much on the conservative side.”
Inouye also told The Hill he will support the draft budget that Senate Budget Committee Chairman Kent Conrad (D-N.D.) will unveil next week.

“I trust his judgment,” Inouye said. “I support it sight unseen.”

The Conrad budget could be used by the committee to allocate funds for 2012 appropriations bills. Committee ranking member Thad Cochran (R-Miss.) made clear Thursday that he is waiting to see any cap agreed to the debt-ceiling talks to be used for the appropriations bills.

“It is abundantly clear that we cannot adequately address our nation’s
debt problem solely by cutting discretionary spending…. That said, the Appropriations
Committee will take every opportunity to find savings in discretionary
programs, whether in ‘security’ or ‘non-security’ programs,” Cochran said in a statement.

Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) have asked Senate Appropriators to try to find agreement on as many of the 12 appropriations bills for 2012 as possible as deficit talks proceed.

So far the committee has found agreement on one bill, which was reported out of full committee Thursday for possible floor action next week.

The Military Construction and Veterans Affairs bill spends $72.5 billion in discretionary funds, a cut of $618 million from current levels and $1.25 billion below President Obama’s budget request. It is nearly equivalent to a measure that passed the House this month, coming in at $2.6 million below the House. 

Inouye told the committee he hopes that additional bills can move before August.

Appropriations Homeland Security subcommittee Chairwoman Mary Landrieu (D-La.) said the homeland bill is being held up over how to pay for disasters. She said she does not support the way the House-passed version used the Homeland Security allocation for disasters.

—Updated at 12:05 p.m.