Terminations, Reductions, and Savings in the FY 2011 Budget

by Demian Brady / /

Discretionary Cuts
The White House's Terminations, Reductions, and Savings in the FY 2011 Budget lists cuts and reductions to 78 discretionary programs totaling $10.27 billion. 24 of these items (representing $4.477 billion in savings) were also included in last year's list of savings and terminations, which means they were rejected by Congress (6 of these were also proposed in President Bush's 2009 budget). The largest of the repeat savings were for the cancellation of the C–17 Transport Aircraft Production ($2.5 billion), cancellation of the the Joint Strike Fighter Alternate Engine ($465 million), and reductions in health care facilities and construction funding in the Department of Health and Human Services ($338 million). Smaller cuts appearing again include: $1 million each for the Harry S. Truman Scholarship Foundation and the Christopher Columbus Fellowship Foundation, and $3 million for Anthrax vaccine research.

New discretionary cut proposals:
Constellation Systems Program, National Aeronautics and Space Administration: $3.466 billion
New Construction for Housing for the Elderly: $551 million
New Construction for Housing for the Disabled: $210 million
HOME Investment Partnerships Program: $175 million

Mandatory Proposals
The document listed 25 mandatory proposals claiming a "savings" of $47.177 billion over five years. 15 of these, worth $46.05 billion, are repeated from last year.

$19.187 of the total "savings" would result from the repeal of 12 energy-related tax credits - these will increase revenues to the Treasury. The remaining $27.746 billion is from changes to outlays. 90 percent of the spending cuts come from the termination of lender subsidies in the Federal Family Education Loan Program ($25.092 billion over five years), a holdover item from last year's budget.

New mandatory outlay cut proposals:
Commodity storage payments: $2 million
Grants to Manufacturers of Worsted Wool: -$5 million annually
Telecommunications Development Fund: $7 million annually
Uniform Criteria for Special Monthly Pension (Veterans Administration): -$10 million annually

Other Savings
Other savings include administrative reforms that would save $272.686 million from 2010-2014. The largest savings ($117.8 million over five years) is projected to result from a Department of Veterans Affairs (VA) award of an Oracle Enterprise Licensing Agreement, meaning Oracle will have an exclusive contract to supply and support all VA software and data architecture. The next largest savings ($32.484 million) would result from improved use of electric power-management of VA's 300,000 PCs. Other savings are expected to occur from cutting travel budgets in executive departments, and increased use of teleconferencing.

Program Integrity Savings
There are 3 program integrity proposals that would increase tax receipts by $14.916 billion over five years, mostly through increased enforcement efforts at the IRS, and 6 that would reduce outlays due to waste and fraud in programs including Medicare, Medicaid, and Unemployment Insurance by $27.282 billion over five years.

The program integrity improvements will require additional federal resources to investigate fraud and implement reforms. The budget calls for $16.247 billion in discretionary allocation adjustments over five-years to fund these efforts.

Net 5-year outlay savings for program integrity (including the discretionary allocation adjustments): $11.035 billion

Annualized Outlay Savings (in millions)
Discretionary: $10,270
Mandatory: $5,549
Administrative: $55
Program Integrity: $2,207
Total: $18,081