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The Corner

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Cuts Are Cuts



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I sense a tempest in a teapot brewing over the continuing resolution for 2011, specifically the notion of “real” versus “fake” cuts. I confess I’m mystified.

A $1 cut in the appropriations process (of which there are now 28 billion versus FY 2010 enacted) does not cut outlays by $1. It cuts the authority to engage in outlays by $1 (which down the line presumably means fewer outlays).

A $1 “rescission” (roughly $8.5 billion from prior mandatory appropriations) does exactly the same thing. It cuts the authority to engage in outlays by $1 (which down the line presumably means fewer outlays). So rescissions are just as real as cuts to appropriations levels.

Weirdly enough, reforms to mandatory programs (changes to the Pell Grant alone come to $35 billion in cuts in ten years) immediately cut outlays and the reductions grow in perpetuity (since the program was running in perpetuity). Of course, most of the long-term mandatory program changes do not score in this FY 2011 appropriations exercise (quirky Budget Act), so only $500 million of the Pell Grant savings are reflected in the $1.049 trillion figure.

Appropriations, rescissions, mandatory changes: cuts are cuts.



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