Principles for a budget deal

Wendy Patton, senior project director for Policy Matters Ohio, joined Progress Ohio and the Progressive Legislative Caucus at a Statehouse press conference on federal deficit reduction. Her remarks addressed the importance of revenues in the budget and deficit discussions pending in Congress.

We need a balanced approach to deficit reduction

As the next phase of the budget debate shapes up again in Washington, the principles we recommended for the fiscal cliff negotiations remain the same. Policymakers must ensure that deficit reduction does not hurt families and children, deepen poverty and hardship and increase inequality.

Significant progress has been made toward reducing the deficit.  In the last two years, Congress has enacted legislation that will reduce the deficit by $2.3 trillion over 10 years, ($2 trillion from policy changes plus $300 billion in interest savings). Nearly three-quarters of the policy changes came from the spending side and only a quarter came from revenues.  

The spending cuts that have been enacted so far have been almost entirely from discretionary spending; that’s the 40 percent of the federal budget that is controlled on an annual basis by the appropriations process. 

About half of the discretionary budget funds what are often grouped together under the heading non-defense programs. These include critical investments in education; scientific and medical research; roads, bridges and ports; veterans’ programs; environmental protection; public safety and other critical services. As a result of the Budget Control Act enacted in 2011, non-defense discretionary funding is now scheduled to be at its lowest levels relative to the economy in 50 years by 2017. So cuts in these important investments are inevitable over the next decade. 

This will have a big impact on Ohio. More than a third of total, overall state funding flows from Washington. Medicaid