BUDGET:

'Supercommittee' will fix gaze on discretionary spending this week

E&E Daily:

Advertisement

The bipartisan group of 12 lawmakers asked to search for a trillion-dollar deal to reduce the deficit this week will turn to a slice of the budget pie that lost a big bite in the law that created their "supercommittee": discretionary spending, including energy and environmental programs.

The panel will meet amid a closing window for its 12 members to reach accord on a debt-cutting plan with enough time to receive a score from the nonpartisan Congressional Budget Office ahead of a Nov. 23 deadline for submission to party leaders. On the environmental front, the lion's share of "supercommittee" lobbying has focused on oil and gas incentives rather than broader Energy Department or U.S. EPA investments -- making Wednesday's hearing perhaps the only chance its members will have to signal publicly their aims for those billion-dollar agencies.

The one witness set to appear before the dozen lawmakers, CBO Director Douglas Elmendorf, is sure to face questions about how quickly his team can evaluate the impacts of a potential "supercommittee" deal. But before any such plan reaches the public eye, Elmendorf is likely to underscore that the August deal that first gave the 12 members their $1.5 trillion deficit-cutting benchmark dealt a landmark wallop to discretionary agencies such as DOE and EPA.

In a report released soon after Congress agreed to raise the federal borrowing limit, CBO found that discretionary spending would fall to 6.1 percent of U.S. gross domestic product (GDP) by 2021 under the debt deal, or nearly one-half the 11.3 percent of GDP level that it stood at in 1971.

That dramatic drop in discretionary spending could come in equal portions from the defense and non-defense budgets or through more lopsided cuts to one or the other category of spending.

If defense took an outsized hit under the debt deal's spending caps, "budget authority for nondefense programs could grow at close to the rate of inflation, rising from $511 billion in 2011 to $656 billion in 2021," CBO wrote in its August report. "Still, such funding would fall from 3.4 percent of GDP this year to 2.8 percent of GDP 10 years from now."

The budget office also reported that keeping defense program growth in line with inflation would result in a more than one-third cut to non-security agencies -- such as EPA, the Interior Department and most of DOE -- "relative to the projected size of the economy."

Such prospects for a massive long-term hit to federal energy and environmental spending began to sink in for many conservation advocates during the closing days of the summertime debt debate, with some greens conceding that their focus on beating back short-term policy riders had limited their ability to push for smaller cuts to discretionary programs aimed at protecting public health and wildlife (E&E Daily, July 28).

Schedule: The hearing is Wednesday, Oct. 26, at 10 a.m. in 216 Hart.

Witness: CBO Director Douglas Elmendorf.