Now that the debate over raising the debt ceiling is over and the smoke is beginning to clear, the question remains: What does this really mean? And, more specifically, what does this mean for libraries?
First, a recap: With little time to spare, Congress finally passed on August 2 the Budget Control Act of 2011, which allows the president to borrow more money to pay off our ever-increasing national debt. The final bill that was produced after several weeks of private negotiations and acrimonious public debate contained a number of wide-ranging provisions designed to reduce federal spending without raising taxes, along with a provision to allow the national debt to increase by $2.4 trillion. That amount is estimated to keep the U.S. solvent until some time in 2013—after the next presidential election—at which time Congress would need to vote on this issue once again.
Now for some quick facts: While there are no new taxes in this bill, there are plenty of spending cuts, but no specifics, and mostly well into the future.
Here is an outline of the legislation:
- There is an immediate debt-limit increase of $400 billion dollars.
- President Obama is permitted to request an additional $500 billion increase in the debt ceiling in the near future (which Congress could disallow with a veto-proof rejection of the request).
- The legislation includes spending cuts of more than $900 billion over 10 years by instituting funding caps in spending on discretionary programs, including security and non-security programs, but excluding any cuts in mandatory programs like Medicare, Medicaid, and Social Security.
- A further increase in the debt limit of between $1.2 trillion and $1.5 trillion would be available after one of these two scenarios take place: 1) a “special committee” identifies matching levels of additional spending cuts; or 2) the House and Senate have both adopted a balanced-budget amendment to the Constitution.
Bottom line: The cuts are not quite as big as the media leads you to believe. There are overall funding cuts of $21 billion in 2012 and $42 billion in 2013 for the discretionary programs covered by this bill—more significant spending reductions come in the later years of the 10-year agreement, and those are ultimately subject to the approval of future Congresses. While these cuts will be painful, when taken in the context of a discretionary federal budget that spends more than $1 trillion per year, it could have been much worse than these initial reductions, which are only in the tens of billions of dollars.
A super committee?
While the specific cuts in the Budget Control Act might have been worse, there are more on the way. The law creates a 12-person joint congressional committee (which is being referred to in the media as a super committee) to identify further ways to reduce the national debt. Everything is back on the table for this committee: taxes, Medicaid, Medicare, Social Security, and all other forms of federal spending.
The special committee must complete its work by November 23, and under specially designed rules to avoid a potential Senate filibuster. Then, both the House and Senate must hold an up or down vote (with no amendments) on the committee’s recommendations by December 23.
If the special committee is deadlocked or unable to get a congressional majority to agree on recommendations, then automatic across-the-board spending cuts of at least $1.2 trillion would go into effect, with some specific programs identified for special treatment: Defense (broadly defined to include homeland security and foreign aid) is included; Medicaid and domestic mandatory programs are excluded; and Medicare cuts are limited to no more than a 2% cut to providers.
Regardless, the legislation also requires that the House and the Senate vote on a Balanced Budget Amendment to the Constitution between October 1 and December 31. If it’s passed and sent to the states, it will negate the need for Congress to pass the additional cuts recommended by the super-committee in order to raise the debt ceiling.
Believe it or not, there was actually some good news among the cuts in this legislation. Pell Grants were singled out as the only program that actually received more money to dramatically reduce the shortfall it is facing. (The tradeoff was to eliminate a subsidy for low-income graduate students that had deferred interest payments on student loans until graduation.) The method of achieving this Pell Grant increase should help improve the funding situation for other domestic programs, like libraries, that are included in the same funding bill (the Labor/HHS/Education Appropriations bill) that would otherwise have likely been subjected to even further cuts to make up for the Pell shortfall.
From a big-picture perspective, that’s the agreement, and that’s what all the fuss in Washington has been about. As this agreement makes clear, Washington is going to be spending quite a bit less money in the years ahead, with nearly every program on the table when Congress gets around to implementing this first round of cuts in specific form.
Library future imperfect
For libraries, it’s not a particularly pretty picture. First, as the FY2012 budget process comes to its conclusion at the end of the year, the Library Services and Technology Act (LSTA) will be one of the thousands of federal programs whose funding will be subject to cuts outlined in the Budget Control Act. The Improving Literacy Through School Libraries program has already been eliminated in an earlier round of cuts, and other programs that libraries care about are at risk as well. In addition, while the special committee is unlikely to recommend specific cuts to smaller programs like LSTA, it could well recommend additional cuts to discretionary programs that could eventually result in less domestic spending. And, if the Committee is unable to do its work and make recommendations, it will result in additional across-the-board cuts that will directly impact LSTA and other federal programs from which libraries receive funding.
While libraries have not received huge increases in recent years, we have been spared from the big cuts that have affected many similar domestic programs. In the mad scramble that is likely to ensue when Congress returns from its August break to grapple with implementing these budget issues, the library community needs to become engaged. Identify your Members of Congress and determine the key players in this debate, and then raise your voice about library issues. Get involved, use the facts to educate legislators about the important role libraries play in America’s social and economic well-being, and don’t let up until this whole process is finished.
If there is ever a time to be involved, it’s now—when the very existence of library programs are on the line.
RICH STOMBRES is vice president of the Penn Hill Group in Washington, D.C.