Newsletter: August 26, 2013

Odds of an October Shutdown Down to 10 Percent

By Ken Gold, Director

Discretionary spending has declined sharply, from a peak of $1.347 billion in FY11, to approximately $986 billion this year.  The FY14 House Republican Budget Resolution seeks to further cut discretionary spending, to $967 billion, with the bulk of the cuts targeted at non-defense agencies, in the cases of some departments by more than 20%.  Late last month, House Republicans appropriators postponed a markup of the Labor-HHS-Education bill, which would have cut of 23% from the current spending level. At the same time, the House budget would increase spending on defense, and to a lesser extent on homeland security, military construction, and veterans.


Upcoming GAI Course(s):

Advanced Legislative Process

October 7 – 8, 2013

This course is designed to assist participants in identifying, analyzing, and tracking legislation at the various stages in the legislative process.

It provides an in-depth, detailed understanding of legislative procedure and strategy for individuals who already have a good working knowledge of the basics of Congress and the legislative process.


Certificate Program in Legislative Studies

The Certificate Program in Legislative Studies is designed for professionals who are currently working or planning to work in an executive branch department or agency; in a congressional staff position; with an interest group, law firm, or news organization; or others whose business or organization is affected by federal legislative or regulatory activities.


Director’s Desk

Over the last year fiscal hawks have been warning that if we didn’t drastically cut spending and enact major reforms in entitlement programs to reduce the federal budget deficit, the United States would become another Greece.  Greece, however, after years of severe fiscal austerity, is now running a budget surplus, but the economy is paying a steep price.  (In actuality, Greece is running a “primary surplus”, which excludes the costs of interest on the debt, social security, and local government.) In the second quarter of the year, the Greek economy contracted by 4.6%, continuing a deep recession that has now lasted more than six years, while unemployment exceeds 27%.

This month the Treasury Department reported that the federal deficit shrank by 38% in the first ten months of the fiscal year, and now projects a deficit of $760 billion for FY13, approximately half the FY09 deficit.  Since 2009, the deficit has fallen from 10.2% of GDP to about 4% of GDP this year. According to CBO, in the last two fiscal years federal outlays declined by $150 billion, leading conservative economists like Stephen Moore of the Wall Street Journal to declare that “the budget sequester is a success”.  That would seem, however, to depend on what you were trying to achieve.