Center for American Progress

RELEASE: With Budget Deadline Looming, New CAP Report Urges Congress to Reject Sequester Spending Levels, Craft a Budget Deal to Build an Economy That Works for All
Press Release

RELEASE: With Budget Deadline Looming, New CAP Report Urges Congress to Reject Sequester Spending Levels, Craft a Budget Deal to Build an Economy That Works for All

Congress Returns to Work Today and Must Pass a Spending Bill to Prevent a Government Shutdown by October 1, With the Return of Sequester Spending Levels Looming

Washington, D.C. — As Congress returns from August recess and the October 1 deadline to fund the government fast approaches, a new report from the Center for American Progress gives a comprehensive look at the budget showdown and offers Congress common-sense recommendations for crafting a budget deal that will build an economy that works for all—not just the wealthy few. The report lays out the current budget outlook and explains in detail the harm to both everyday Americans and the U.S. economy were Congress to reinstate sequestration levels of spending on infrastructure, education, affordable housing programs, environmental protection, tax assistance and enforcement, and the legislative branch.

“While the economy has slowly turned around, many working Americans have yet to reap the benefits. Congress’ austerity agenda has certainly not helped—and has even hamstrung the economic recovery,” said Harry Stein, Director of Fiscal Policy at CAP and author of the report. “Lawmakers now face an urgent deadline to fund the government for the next fiscal year, and they should craft a budget deal with the goal of building an economy that works for all. Rather than extending budget cuts from earlier years and deepening cuts to some sectors, lawmakers should raise the nondefense spending cap to presequester levels, while providing equal relief for the defense budget. And with the growing problem of inadequate revenue, any budget deal that includes deficit-reducing policies to offset the cost of sequester relief must also include new revenue.”

As CAP’s report explains, Congress and the president already agree that FY 2016 defense spending should be increased above sequestration levels, so lawmakers are currently confronting two major questions: whether to increase the nondefense spending cap along with the defense cap and whether to offset the cost of these spending increases with other deficit-reducing policies. CAP offers two main recommendations for the FY 2016 budget deal:

  • Lawmakers should raise the nondefense spending cap to the presequester level and provide an equal amount of relief for the defense budget. Given the substantial need to increase economic investment, it makes no sense to provide more relief for defense programs than for nondefense programs. This recommendation for nondefense discretionary spending is based in part on what is politically feasible for a budget deal, and it should be noted that even the presequester cap would be a relatively austere allocation for the nondefense discretionary budget.
  • Lawmakers should include new revenue in the budget deal if that deal includes deficit-reducing policies to offset the cost of sequester relief. Federal spending projections have fallen dramatically over the past several years, and inadequate revenue has become a larger problem. But while the United States still faces long-term fiscal challenges, the short-term budget outlook is stable. Therefore, if lawmakers cannot agree on deficit reduction that includes revenue, increasing the sequestration caps without offsets would be preferable to leaving sequestration in place.

Click here to read “Setting the Right Course in the Next Budget Agreement” by Harry Stein.

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For more information on this topic or to speak with an expert, contact Allison Preiss at apreiss@americanprogress.org or 202.478.6331.