federal budget

New OECD and NDD Reports Out Today

/ The Old Crank / 1 Comment

timetoreskillVery light posting recently, which I attribute to an unusual (and troubling) imbalance in the work-to-pondering ratio over the last week or so. I thought I’d break the silence with news of two new reports released today that might be of interest to those who follow adult education policy.

First up: Time for the U.S. to Reskill? What the Survey of Adult Skills Says, an OECD report on the policy implications of the recent PIAAC Survey for the U.S., including “key lessons about the strategic objectives and directions which should form a frame for policy development in the US, including policy on adult learning and schooling.”

NDD-reportIn addition, NDD United‘s report, Faces of Austerity: How Budget Cuts Have Made Us sicker, Poorer, and Less Secure was also released today. This is the first really comprehensive report on how Americans have been affected by federal budget cuts over the last several years. NDD stands for “non-defense discretionary, which is the part of the federal budget that includes the bulk of the funding for things like education, job training, health and science programs and research, and national parks. Adult education funding is an example of an NDD program, while not discussed at great length in the report, it is mentioned several times in the workforce section.

It’s a sad coincidence that an important new report calling attention to the need for greater investment in skills is released the same day as another report detailing the ways in which the country has been dramatically dis-investing in programs that address this very problem.

Those interested in the NDD report might also want to take a look at Sam Stein’s piece on NDD United’s efforts in the Huffington Post.

The Sequester Still Festers (But Maybe Not in 2014)

/ The Old Crank

(Updated Below)

This column by Jared Bernstein in the Times neatly summarizes the limited expectations people have for the upcoming budget conference committee meetings, which are focused right now on the hope that the committee might at least be able to do something about the 2014 sequester cuts. A “grand bargain,” or any significant progress towards addressing any of the long-term problems in the economy, appears to be out of the question.

The theory is that there might be a (relatively) easy way to replace the 2014 sequestration cuts with some other cuts (or savings) from (most likely) mandatory programs that wouldn’t kick in until many years later. If this sounds like only a slightly better version of the usual kick-the-can-down-the-road approach, that’s because that’s what it would be: a brief respite from the sequester in return for some new cuts over on the mandatory side of the budget that we don’t have to think about until later, while avoiding dealing with anything else.

Bernstein makes a number of illuminating points in his column, like this one:

[R]eplacement cuts will most likely have to come from the mandatory side of the budget, which includes entitlements. Now, there are definitely entitlement savings — say, from Medicare — in the president’s budget that do not affect beneficiaries, like reducing the amount that Medicare spends on drugs by allowing the program to use its clout to get better bargains from drug companies. And there’s other wasteful spending on this side of the budget, like farm subsidies, that could also contribute. (my emphasis)

This paragraph suggested to me a potential approach to a problem facing many of us who will be advocating for sequester relief for non-defense discretionary (NDD) programs (which means almost all federal education programs, such as adult education) this fall: we may be asked by folks on the Hill to support cuts to entitlements in return for lifting sequester cuts.

This is problematic for a couple of reasons. For one thing, our job is to make the case for the program we are there to represent, not to take a position on cutting other programs. And for many of us who represent NDD programs for low-income people, cutting benefits potentially hurts the people we are there to represent, just in a different way. I don’t have the numbers in front of me, but I think it’s safe to assume that a higher-than-average proportion of adult education students probably receive Medicaid and Social Security benefits, for example. It’s a hollow victory to preserve adult education funding while pushing adult education students who benefit from those programs deeper into poverty. (In his column, Bernstein notes that Social Security benefits alone are keeping 22 million people in this country out of poverty.)

At the same time, just saying no doesn’t seem helpful, since, as Bernstein notes above, there are ways to save on entitlements that don’t necessarily involve cutting benefits. So  perhaps NDD advocates could express a preference for looking at entitlement savings that do not touch the actual benefits that people receive, at least as a second best option if raising revenue is off the table. If I’m in a member’s office talking about federal education programs, I still don’t think I have any business talking a position on farm subsidies, but, as a basic statement of principle, taking the position that “sequester cuts to NDD programs should only be replaced with entitlement savings that do not directly affect beneficiaries” at least provides some guidance to members as to what kind of direction they should be going in if they insist on replacing sequester cuts with some kind of cut from the mandatory side.

I should note that Bernstein and his colleagues at the Center on Budget and Policy Priorities also take the position that while they are open to this kind of trade-off, it should only apply to non-defense sequester cuts. That is, folks who want to replace the sequester for defense programs shouldn’t be looking over at the non-defense side for more cuts. To do so would violate an essential principle embedded in the deal that created the sequester: that budget cuts should come in equal measure between defense and non-defense.

UPDATE 10:20am: Stan Collander, who has been pretty good with predictions of late, has just published a post in which he argues pretty convincingly that even a sequester deal is unlikely.

Muted Celebration

/ The Old Crank

This Wonkblog post makes a good point, and it’s the reason that the proposed deal to end the government shutdown and raise the debt ceiling is merely a cause for relief,  not necessarily celebration:

The mistake Republicans made was thinking that what worked from them in 2011 was simply the hostage taking. What worked for them in 2011 was winning in 2010. What made 2013 impossible was that they’d lost in 2012.

But Republicans should feel good about one thing: This process has been a reminder of how powerful that 2011 deal was and remains for them. Democrats are agreeing to fund the government at a level far beneath what they consider acceptable. Over the weekend, it became clear that Democrats are genuinely worried about sequestration’s 2014 cuts, which trigger on January 15th (the Senate deal is designed so the government funding runs out just as the new cuts trigger — which is to say, its timed to make the next fight a fight over sequestration.)

As Grover Norquist told me, with his characteristic understatement, “Sequester is the big win. It defines the decade.” (my emphasis)

Basically, what we are looking at this morning is a deal to avert disaster and put things back on the less disastrous but still basically terrible path we were on. The agreement (if the House goes along) still leads to diminishing funding for adult education and other federal discretionary programs for many years down the road.

The Perpetual Budget Crisis

/ The Old Crank

Friends of mine who only vaguely follow the federal budget process (i.e. normal people) sometimes ask me why the government seems to be in perpetual crisis mode regarding the budget, debt ceiling etc. This blog post from Jared Bernstein offers several suggestions that make sense to me:

How Did It Come to This?

That’s an important question that I’ll largely leave to political scientists.  Someone the other day suggested that once Congressional leaders could no longer dole out earmarks to members of their caucus, they lost an important disciplinary tool—“break with your leaders and you won’t get that bridge!”  The political scientists I’ve asked about this say, “maybe,” but the Hill vets tend to put a lot of weight on this explanation.

I’ve argued that wealth concentration has interacted with money in politics such that folks like the Koch’s can buy the politics they—not the parties’ leaders funded by establishment money—want (they can also buy the “think tanks” to explain why they’re right [sic]).

And, as budget expert Maya MacGuineas noted the other day on a panel we were on together, don’t underestimate the damage done by not having a budget.  All this fiscal patchwork—“continuing resolutions”—means there’s never a lasting agreement on receipts and outlays that both sides have hammered out together.  That creates endless oxygen for the renegades to get their crazy on.

Finally, it really does seem to be the case that the obstructionists are doing the bidding of their constituents.  One House R was quoted in the paper the other day saying, essentially: the folks back in my district would rather see me work to shut down the government and default on the debt then compromise.  And I’m gonna listen to them, not Boehner and Cantor.

I might add one more: it appears that the people doing the negotiating really don’t like each other very much.