Some Groups Safe From Automatic Cuts
List May Give Advocates Leverage With Deficit Panel
Congress’ new super committee meets today in search of a budget deal that will stave off sweeping mandatory spending cuts, but even if it fails, veterans could emerge unscathed thanks to a 25-year-old “do not cut” list.
Almost every program benefiting former members of the armed services would be spared from the $1.2 trillion in automatic spending cuts that go into effect in 2013 if the Joint Committee on Deficit Reduction can’t come up with a cost-cutting plan by Thanksgiving.
Around 150 programs worth about $1.7 trillion, ranging from food stamps to the president’s pay, are protected from the “trigger” designed to force Congress to adopt the committee’s proposal by Dec. 23.
The list includes all programs administered by the Department of Veterans Affairs — which had a budget of $126.5 billion this year — and more than $50 billion in Defense Department retirement funds.
Social Security, Medicaid, military pay and more than a dozen anti-poverty programs are also exempt, along with a slew of more obscure programs, such as the Black Lung Disability Trust Fund and the Geothermal Resources Development Fund.
Many of those programs are on the chopping block as committee members begin their deliberations, but being on the “exempt” list, first established in the mid-1980s, may give advocates for veterans, retirees and the poor extra leverage as they lobby to protect prized programs.
The list is a relic from 1985, when sequestration was first used to pressure Congress into making tough cuts as part of the Gramm-Rudman-Hollings Act.
The list has been used in repeated sequestration situations, with only a handful of slight modifications. The most significant came in a 2010 update that exempted virtually all veterans benefit programs. A reference to the list was included in the legislation that created the super committee, indicating that these programs will still be off-limits in any mandatory cuts.
“It is sort of a power list,” a Democratic aide familiar with the budgeting process said. “If you are on the list, you have friends. … It’s supposed to frighten people into doing something else, but it’s sort of an open question as to what motivates Congress now.”
Any group that supports a program deemed exempt from the trigger can argue that it should also be spared by the super committee. Some organizations may even determine that blocking the panel’s proposals and triggering automatic cuts would ultimately be better for their membership.
“It is plausible that it strengthens the position of the people who would be hurt less by the sequestration,” said Richard Kogan, a senior fellow at the Center on Budget and Policy Priorities, who worked for more than two decades for the House Budget Committee. “But probably most people — except single-interest advocacy groups — are diverse enough in their interests that they would rather see something that balances out the reduction pain.”
When the list was first created, Congress intentionally left out the most influential interests, hoping their lobbyists would force lawmakers to act, said Stan Collender, a budget expert at Qorvis Communications and a Roll Call contributing writer.
“Things like education were not included because Members of Congress wanted the education community lobbying hard to avoid a sequester,” he said. “Education was considered one of, if not the top, lobbying force at the time, and they felt their power would push lawmakers to reduce the deficit.”
But in the past 25 years a growing veteran population has become increasingly powerful. Advocates for veterans are keenly aware of what they have to lose. The moment the debt deal was reached, lobbyists for Veterans of Foreign Wars started playing defense, contacting the offices of the 12 panel members and trying to identify potential committee staffers.
The organization is particularly concerned that the super committee may eliminate a special pension plan for those who serve more than 20 years in the military and increase prescription fees and premiums for veterans enrolled in Tricare.
The VFW is also working to save military quality-of-life programs and plans to use the exemption of veterans benefits to support the argument for protecting benefits during service, not just after.
Still, the group takes little comfort in its seemingly safe spot.
“The rules could change at any time,” said Ryan Gallucci, VFW deputy legislative service director. “We think it’s positive that the people who built the legislation identified veterans issues as important, but that in no way makes us comfortable about keeping them intact.”
By Kogan’s calculations, about $1.5 trillion in mandatory spending would be exempt from any cuts should the trigger go into effect. On the discretionary side, about $137 billion to pay military personnel would be exempt, along with about $78 billion for VA health care and Pell Grants.
The list is a reminder of how the political climate has changed. In today’s hyperpartisan environment, a similar agreement on a set of sacred cows would have been next to impossible, said sources involved with the budget process. Furthermore, the frenzied weeks in which the debt deal came together were hardly enough time to revamp a list that took more than a year to fashion.
“They knew that if they started opening up the list that all of a sudden all hell would break loose,” Kogan said.