The President’s budget proposes to alter the structure, although not the overall level, of the ‘discretionary caps’ that limit annual appropriations bills. It would combine the existing caps — which separately constrain total defense and total nondefense appropriations — into a single overall cap on all discretionary appropriations, starting in fiscal year 2014. In other words, the Administration proposes to tear down the firewalls separating defense and nondefense discretionary programs, throwing all funding into the same pot.
The President’s new budget itself supports our conclusion that tearing down the firewalls could squeeze nondefense funding even more tightly than the existing caps, as it moves some funding from nondefense programs to defense in 2013. The budget breaches the existing defense cap for 2013 by almost $5 billion, while providing almost $5 billion less than the current cap permits for nondefense programs. As noted, the Administration proposes to revert to the original security/nonsecurity caps for 2013, and its budget adheres to the caps as reconfigured in this way. This reallocation of this modest amount of funding in 2013 may be just a foretaste of much larger reallocations to come in future years, especially on Capitol Hill, if the firewalls are completely removed.
Examples of programs under the nondefense caps include Veterans Administration medical costs, housing, Social Security and Medicare.