Budget Watchdog All Federal, Episode 5: Biden’s Skinny Budget Request

Podcast, FY22 Skinny BudgetBudget Watchdog All Federal, Episode 5: Biden’s Skinny Budget Request

Budget & Tax,  | Quick Take
Apr 16, 2021  | 20 min read | Print Article

After a decade of budget caps and mock budget discipline in President Trump’s budget requests, President Biden released his FY 2022 “skinny budget” request this week.  And it really lets the belt out a few – or a lot – of notches.  What’s the tale of the tape? Increases across the board! Every cabinet department sees a percentage increase in budget authority over fiscal year 2021. TCS Senior Policy Analysts Sheila Karpf and Joshua Sewell join Steve Ellis to detail what these increases amount to.

You can catch up on our FY22 Skinny Budget analysis here and read the transcript of this episode below: 

Steve Ellis:
Welcome to All American Taxpayers Seeking Common Sense. You’ve made it to the right place. For over 25 years, TCS, that’s Taxpayers for Common Sense, has served as an independent non-partisan budget watchdog based in Washington, DC. We believe in fiscal policy for America that is based on facts. We believe in transparency and accountability, because no matter where you are on the political spectrum, no one wants to see their tax dollars wasted. Today is April 15th, which is normally tax day, but not this year. So we’re going to dig into the Biden administration’s first foray into the fiscal year, 2022 budget. Joining me on the podcast with all the deets we’ve dug up are two of my colleagues, frequent flyer Senior Policy Analyst, Josh Sewell.

Josh Sewell:
There is nowhere I’d rather be.

Steve Ellis:
And for the first time at Budget Watchdog AF, a former colleague that has recently returned to the TCS family, the real Oracle of Omaha, Senior Policy Analyst, Sheila Karpf. Thanks for joining Sheila.

Sheila Karpf:
Thanks Steve. It’s great to be here.

Steve Ellis:
And to be clear, you never really leave the TCS family. I don’t mean that in a mafia type of way, just that budget bonds are tight. Speaking of tight, how about this budget? Kidding. This is supposed to be what is traditionally called the skinny budget of a new administration. If your measure is depth, well yes, it’s only 58 pages instead of the five volume, thousands of pages, long tomes of normal budgets. And by breadth, it’s just discretionary spending, no mandatory or revenue proposals and just a couple of tables at the end. But after a decade of budget caps and mock fiscal discipline in president Trump’s budget requests, this one really lets the belt out a few, or a lot of notches.

So what’s the tale of the tape? Increases across the board. Every cabinet department sees a percentage increase in budget authority over fiscal year 2021 and only Defense and Homeland Security get less than

5% increases. And just keep in mind, even then a 1.6% increase in defense spending is equal to $11.6 billion, which is a bigger dollar increase than every cabinet department and agency, except Education and Health and Human Services. But Josh, helped the Budget Watchdog AF audience with details on what these increases amount do.

Josh Sewell:
Overall, this budget calls for nearly an eight and a half percent increase, that’d be $118 billion. So this would bring the discretionary side of the budget just north of one and a half trillion dollars. It’s a big jump for certain agencies. Education up 40%, Commerce 28%, Health and Human Services EPA and the National Science Foundation, all around 20% or more. And that’s just compared to last fiscal year. So those facing the largest cuts, nobody.

Steve Ellis:
Nobody, really?

Josh Sewell:
Well not in real life. So the Army Corps of Engineers has a 13% cut on paper, but just like nobody puts Baby in the corner, Congress never cuts the core. Every single year, both Obama and Trump budgets had a cut and every single year Congress always increases spending. It’s one of those Washington norms that always endures. Now let’s remember, every presidential budget request is aspirational. It’s just one step in a negotiation.

Steve Ellis:
Okay, so let’s dig into some of those aspirations. Sheila, you’ve gone over the package, brief our audience on the divergences with the recent budgets. For instance, Taxpayers for Common Sense has declared the Department of Energy budget bloated. That’s not good for taxpayers.

Sheila Karpf:
No, Steve it’s not. And President Biden’s discretionary budget has proposed $46 billion to the Department of Energy, which is an increase of about $4 billion over the current fiscal year, which is sort of in line with most of the agencies. And the additional funds seem to be targeted a lot at clean energy, climate, research and development, specifically for technologies like advanced nuclear, which we work on a lot and electric vehicles. Actually, a ton of money for electric vehicles.

Unfortunately, the trade offs for the 10% increase are nowhere to be found and the recent spending growth without mentioning any corresponding cuts raises a lot of red flags for us and red ink. If you look at the last two fiscal years, spending has increased about $10 billion, about 30%, which makes for a very unexpected Trump and Biden tag team. On fossil energy, Biden has proposed to revitalize and sink even more cash into the DOE Office for Fossil Energy. And this could include carbon capture and storage, but taxpayers have already sunk so much money into CCS technology and many of these projects have failed and if we just keep re-infusing this office and similar ones with a lot of cash, this just may be another costly calamity for taxpayers.

Steve Ellis:
A costly calamity for taxpayers. Yikes. So Sheila, thanks for all of that. Now how about the story over at the Department of Interior? What does President Biden’s skinny budget tell us about what’s going on over there?

Sheila Karpf:
Well, Steve, what a difference a year makes. The administration’s FY 22 requests for the Department of Interior is about $17 billion, about a $2 billion increase, or 16% increase from the current fiscal year. The administration says that a lot of the increased funding would be spent on Orphan Oil and Gas Wells, which we work on a lot and abandoned mines. And similar to the US department of Ag budget as well, increased wildfire funding. As we anticipated, there’s a dramatic shift from the last administration focus, the Trump administration, on fossil fuels toward President Biden’s clean energy climate and equity focused budget priorities within the Department of Interior and others as well.

Steve Ellis:
Okay. Earlier you mentioned clean energy priorities. I know, because I not just read the budget, but also our own analysis, that this document mentions the word climate 146 times. That’s 2.5 times per page. So Josh, Sheila, I’ll throw this out to both of you, what’s the deal with climate?

Josh Sewell:
Well first off, climate change is a real, credible, costly challenge and the administration acknowledges that. But let’s be clear, we’re not cynics, we are seasoned. Huge pots of money or whole new agencies like an advanced research projects agency focused on climate, which is in this proposal, are not the answer. That’s too simple.

Sheila Karpf:
Yeah, you’re right, Josh. And we’ve actually had a lot of fun trying to come up with new alphabet letters for new ARCA agencies, but Congress and the administration has proposed to throw a lot more money at clean energy and climate priorities. But we know that this doesn’t always equal results. The President aims to achieve net zero emissions by 2050, and he may announce some more specific priorities next week as well. And this would happen through a new clean electricity standard potentially, and various clean energy investments. But we’ll have to read the upcoming detailed budget to actually see if his wishes could come true, because goals like folding climate impacts into disaster planning and increasing renewable energy subsidies, while that may sound great on paper, we know this always hasn’t been good for taxpayers or the climate in the past. The last thing we need is any more US Department of Agriculture funding toward more special interests like corn ethanol that go behind Congress’s back.

Steve Ellis:
Got it. You mentioned about next week and the Biden administration. So listener note, next week is Earth Day and with it comes President Biden’s much heralded climate summit. Be sure to tune in then for a special climate focused Budget Watchdog AF. We will be talking about all of that and our taxpayer climate accountability campaign. You don’t want to miss it. All right, our regular listeners know that we focused in recent weeks on defense spending with our Senior Policy Analyst, Wendy Jordan. What’s the skinny on the DOD budget request, Josh?

Josh Sewell:
$715 billion in spending, which is a little more than $10 billion, more than last year. But I think most importantly, this budget would jettison the off budget account called Overseas Contingency Operations or OCO. So now, this expected war spending that we know we’re going to spend is going to be on budget instead of in this fantasy off budget account that doesn’t count towards spending accounts or any other limits. Eliminating OCO is a good reform, but some people are already spinning this as gutting the Pentagon, because the $10 billion does not quite keep up with inflation. But again, it’s still $715 billion and about half of the discretionary budget.

Steve Ellis:
I know at certain times at the height of OCO, we were starting to compare it to other agencies and departments in the federal budget. If it was its own separate department it would have been the third largest or the fifth largest, so this is a significant reform and something that should be cheered by taxpayers. But looking further at the budget, another department is clearly in the budget doghouse, Josh, and that’s the Department of Homeland Security. What happened to DHS?

Josh Sewell:
Well, here’s another area where DHS only receives a hundred million dollars more than it received last year. So that’s a mere 0.2% increase. Now, disaster relief, cybersecurity, some domestic terrorism focus, all those areas, get a boost. What we don’t have details on is some of the border security issues. So customs and border protection, ICE, and those things. We’re going to have to wait until the full budget comes out to know what’s really going on there.

Steve Ellis:
And the Coast Guard, Josh. And the Coast Guard.

Josh Sewell:
Can never forget the Coast Guard.

Steve Ellis:
So talk to me about the IRS, Josh. This is something that we’ve been looking at.

Josh Sewell:
This budget would boost IRS spending by about 10% and it would be focused on improved customer service, creating new online tools and enforcement, but only focused on high income and corporate filings. Now, both these places are areas that need reforms and we brought this up in our weekly wastebasket, I believe it was four weeks ago. And so these are some very important reforms.

Steve Ellis:
Well, that’s a good point, Josh. And listeners, don’t forget to subscribe if you aren’t already to our weekly wastebasket, you can do that right on our website, taxpayer.net. And, as you talk about the IRS, Josh, I mean, it really brings home to me with a voluntary compliance tax system, it is critical that taxpayers have faith that everyone is contributing. No one wants to feel like a sucker. Budget Watchdog AF listeners know that we can’t have Josh on the show without talking about agriculture. So let’s go there to finish it out. Mr. Sewell, what’s going on at USDA. Do we see some budget hope? And Sheila, please feel free to jump in too.

Josh Sewell:
So almost $28 billion for the US Department of Agriculture. And that includes $3.8 billion, 16% overall increase. Now overall, there are greater calls for conservation spending and a climate focus at USDA. These are good moves. However, these routinely get muscled out of the room by big AG and commodity crop subsidies. Again, we’re not cynics, we’re seasoned. So USDA will spend $50 billion or so just on pandemic response. That’s not even mentioning the $28 billion we’ve spent over the last two years recovering from the Trump trade war and also any of the quote, unquote normal farm bill subsidies that were on the books before COVID happened. We’re going to know exactly what the administration wants to do or not do in these areas when the full budget comes out. Because again, most of the spending in USDA is on the mandatory side of the ledger.

Sheila Karpf:
And as you mentioned, we’re talking about near unprecedented levels of subsidies that have been going out the door over the last few years. Some of that money is going to farmers who I know here in the Heartland. Hopefully yes, Steve, we will have more hope when it comes to diving into some of the details and new priorities in the new administration and as we move into the farm bill coming up soon and lots of other policy priorities and proposals being thrown our way.

Steve Ellis:
Great. All right podcast listeners, here comes the skinny budget dismount, and we’ll try to stick the landing and end on a positive note. While Taxpayers for Common Sense doesn’t usually agree with the Department of Agriculture on spending decisions, and Sheila and Josh know this all too well, this budget calls for more funding for monitoring, measurement and verification and conservation programs. Greenhouse gas reduction and soil carbon sequestration is something that we have recommended in the past. So yay. But as we know all too well, Congress has the final say in discretionary spending. So stay tuned to see if anything we’ve talked about today actually pans out. So there you have it for now.

Senior Policy Analyst, Sheila Karpf and Josh Sewell, thanks for the great work and all your insights on this episode of Budget Watchdog AF. Coming up next time, climate, climate, climate. Don’t miss our special episode on the climate summit and TCS’s taxpayer climate accountability campaign. Thanks for listening to Budget Watchdog AF. I hope you’ll subscribe and share this episode with friends and colleagues. We’re always seeking your input, suggestions, questions, and help. So send your emails directly to me, president@taxpayer.net. As always, the Taxpayers for Common Sense team is laser-focused on reading the bills, highlighting wasteful programs that poorly spend our money, and shifting longterm risk to taxpayers.

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