Budget Deal Slashes Programs to help the Poor- Boosts Defense Spending By $5 Billion

From [HERE] Late Friday night, President Obama and Senate Majority Leader Harry Reid (D-NV) struck a deal that averted a government shutdown, but (unless it is rejected by Congress) will lead to about $38 billion in spending cuts over the remainder of the fiscal year. These proposed cuts, alongside rising gas prices and draconian budget cuts at the state and local level, have already led some economists to knock up to a point off of their estimate for U.S. economic growth.

For instance, Diane Swonk, chief economist at Mesirow Financial, “said she had cut her forecast for 2011 to 3.3 percent, from 4.2 percent.” Anything below 3 percent and “you’re just running on a treadmill. You’re not getting anywhere,” she said. Here are just some of the cuts included in the deal, which should be voted on by the end of the week:

– Special Supplemental Nutrition Program for Women, Infants and Children (WIC): $504 million

– State and local law enforcement: $415 million

– Community oriented policing services (COPS): $296 million

– Green jobs innovation fund: $40 million

– Community health centers: $600 million

– Dislocated worker assistance: $125 million

– Substance Abuse and Mental Health Services Administration (SAMSHA): $45 million

– Occupational Safety and Health Administration (OSHA): $49 million

– IDEA (special education): $16 million

– Infectious disease prevention: $277 million

– National Institutes of Health: $260 million

The deal also flat-funded the Pell Grant program, paying for increased enrollment by eliminating the provision allowing students to use a second grant for summer study. At the same time that it cuts these programs upon which the middle-class and low-income Americans depend, the plan actually increases defense spending by $5 billion relative to the 2010 baseline.

Not all the news out of the budget deal is bad, however. Both the Securities and Exchange Commission and the Commodity Futures Trading Commission will actually see budget increases, which will allow them to move forward with implementing the Dodd-Frank financial reform law. $700 million will also be provided for another round of the Obama administration’s Race to the Top education reform program.

But nothing in this deal with help lower the country’s unemployment rate or do anything to boost economic growth. It will simply result in fewer services for people still grappling with the effects of the Great Recession.