Analysis of Deficit Agreement by Feeding America

Analysis of Deficit Agreement

Prepared by Feeding America 8-2-2011 The deal reached by the Administration and Congress late Sunday July 31 would create a multi-phased process for dealing with the deficit and the debt limit. This page includes: Overview: summary of the deal, including the potential impact on federal nutrition programs Action Steps: two immediate actions you can take this week OVERVIEW The agreement would reduce the deficit by at least $2.1 trillion over 10 years and would allow for an increase in the debt limit through the end of 2012. Both deficit reduction and the debt limit increase would be executed in two phases. Phase One Deficit Reduction: Imposes a 10-year cap on discretionary spending beginning in FY2012, resulting in $917 billion in savings over 10 years. Debt Ceiling: Authorizes an immediate increase in the debt limit of $400 billion, followed by another $500 billion increase after Congress votes on a "resolution of disapproval." Impact on Nutrition Programs: Discretionary nutrition programs like TEFAP, CSFP, and WIC would be on the table for potentially severe cuts. Because the discretionary cap would not be applied across-the-board, we would still have the opportunity to advocate for discretionary nutrition programs each year through the annual appropriations process. Phase Two Deficit Reduction: Forms a Joint Committee consisting of 6 members from each chamber divided equally between Democrats and Republicans to draft legislation reducing the deficit by an additional $1.5 trillion over 10 years. The legislation must be submitted to Congress by November 23 and voted on by December 23. To put pressure on Congress to come to an agreement, failure to enact at least $1.2 trillion in deficit reduction would trigger across-the-board spending cuts to both discretionary and mandatory programs beginning in 2013. (Certain programs would be exempt from the across-the-board trigger, including SNAP, CSFP, and child nutrition programs, as well as some other entitlement and low-income safety net programs.) Debt Ceiling: An additional increase in the debt ceiling would be authorized only if Congress enacts deficit reduction of at least $1.2 trillion or enacts a Balanced Budget Amendment and sends it to the states for ratification. Impact on Nutrition Programs: All federal nutrition programs would be on the table for potentially severe funding cuts, changes in program structure, or program elimination. ACTION STEPS There will be two opportunities to influence the process: 1. the immediate round of discretionary spending cuts, and 2. the Joint Committee proposal due out in November. We must continue to demonstrate the importance of protecting nutrition assistance programs through sustained and effective engagement over the weeks and months ahead.