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1 Patrick Fleenor, Cutting Federal Spending May Be as Easy as A to Z: A History and Analysis of Plans Aimed at Controlling Spending 1 (1994)

handle is hein.taxfoundation/srdgxz0001 and id is 1 raw text is: TAX?% ii ,7lr FOUNDATION July 1994, No. 36 Cutting Federal Spending May Be as Easy as A to Z A History and Analysis of Plans Aimed at Controlling Spending A new proposal to cut federal spending, the A-Z Spending Cuts Plan is stalled in the U.S. House of Representatives. This bipartisan plan, authored by Representatives Rob Andrews (D-NJ) and Bill Zeliff (R-NII) and co- sponsored by a majority of members, would convene a special House session to consider cuts in federal spending. This measure is the latest in a series of pro- posals aimed at controlling federal spending and reducing the deficit. Figure I illustrates how difficult this task can be. It graphs one component of total federal outlays, domestic discretionary spending, from 1962 to 1994. Figure I Federal Domestic Discretionary Spending, 1962-1994 $250 $200 m $150 0 = $100 $50 $0 Period One Period Two Period Three 03 CO) < < 0 00 0 0 62 64 66 68 I 72 7 76 I78I II 0I 82I 84 6 8 90 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 Source: Tax Foundation; Office of Management and Budget. Domestic discretionary spending includes all spending on domestic programs other than de- fense and excludes all entitlement spending such as Social Security, Medicare, and Mcdi- caid. Since it is generally considered to be the most controllable portion of the federal bud- get, an examination of its recent history can provide some insight into the climate that has prevailed in Washington over the past three decades. The Outlays presented in Figure 1 arc given in 1994 dollars so that comparisons can be made between the years. The vertical lines on the graph mark the passage of significant pieces of legislation aimed at controlling fed- cral spending since 1980. The graph shows that there have been three significant periods in recent domestic discretionary spending history. The first lasted from 1962 to 1980. l)uring this period domes- tic discretionary spending soared. The second period lasted from 1981 to 1987 when substan- tial cuts were made in this type of spending. In the final period, 1988 to the present, domestic discretionary spending is again growing rapidly. The Federal Budget Federal spending may be broken down into two categories, discretionary and manda- tory outlays. Spending levels for programs funded by discretionary outlays are determined by the annual appropriations process. Each year this process is supposed to produce 13 appropriations acts which fund a wide variety of federal endeavors ranging from national defense to community development. All discretionary spending is divided into three categories: national defense, international, and domestic. By Patrick Fleenor Economisl Tax Foundalion :)I

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