Nondefense Discretionary Spending and the CPC Budget

The Congressional Progressive Caucus (CPC) released their budget proposal yesterday. And, unlike other budget proposals, the CPC proposal recognizes and acts on the need for sustained investment in our future. As is well-known, unless Congress acts to change the Murray-Ryan budget, fiscal year 2015 overall spending levels are already set. But the policy debate over fiscal priorities has (rightly) continued. For example, President Obama released his proposed budget last week, in which he calls for $28 billion in increased nondefense discretionary spending over Murray-Ryan. It is worth taking a closer look at the various budget proposals and compare them to each other and with historical nondefense discretionary spending.

This blog post focuses on nondefense discretionary spending—the part of the budget containing much of our spending on infrastructure, education, and public research and development.* Increasing this spending is important due to years of underinvestment. The American Society of Civil Engineers estimates that over the next 10 years the gap between needed funding for infrastructure and what is planned to be spent is over $1.6 trillion (their overall grade on the state of current U.S. infrastructure is D+). The National Center for Education Statistics estimates that $200 billion is now needed for repairs, renovation, and modernization of public school facilities.

The chart below displays nondefense discretionary spending as a percent of GDP in fiscal years 2007 (3.1 percent of GDP) and 2013 (2.7 percent of GDP); spending in these years will be used as benchmarks for subsequent years. Four budget proposals are compared. The first is the budget legislated in the Budget Control Act of 2011 (BCA). The second is the Murray-Ryan budget that was agreed to in December 2013 and increased spending over the BCA levels for fiscal years 2014 and 2015. The third is President Obama’s recently released budget proposal. The last is the CPC’s budget proposal.

The original BCA budget would have reduced nondefense discretionary spending in 2015 below its 2013 level, the Murray-Ryan budget maintains it at the 2013 level, and the President’s proposal increases it slightly to 2.85 percent of GDP. The President’s proposal goes in the right direction, but not enough to get the economy back to its potential.

The CPC’s proposal for nondefense discretionary spending is the only one that stacks up against both benchmarks—FY2015 spending level would be 3.8 of GDP, a level last seen in when Ronald Reagan was in office. The additional spending would put people to work immediately in construction to repair roads, bridges, and schools. This spending would also have a payoff in the future by enhancing productivity—creating a more educated workforce and getting goods to market faster, workers to work faster, and raw materials to producers faster.

Further, all budget proposals except the CPC budget back-loads cuts to this spending. By 2023, nondefense discretionary spending would be reduced to about 2.3 percent under all budget proposals except the CPC budget, which would maintain this spending above its 2007 level.

*Through a quirk in budgeting, the budget authority for surface transportation projects is considered mandatory spending, but the actual outlays are considered nondefense discretionary spending.

Read EPI’s full analysis of the Congressional Progressive Caucus’ Better Off Budget.