Economic Snapshot | Budget, Taxes, and Public Investment

Sequester would push domestic discretionary budget to record lows

At 3.8 percent of GDP, the current level of funding for non-defense discretionary programs is already lower than the average funding level since the early 1960s. As the graph below shows, just adhering to the spending caps in the Budget Control Act (the debt ceiling deal) would push this area of the budget to historic lows. Allowing the sequester to hit this area of the budget would cause it to plunge even further and significantly slow job growth over the coming year.

While the non-defense discretionary budget isn’t a well-known area of the budget, it is vitally important to the country. It includes security funding for areas like homeland security, veterans, nuclear weapons, and foreign operations; safety net programs like housing vouchers and nutrition assistance for women and infants; most of the funding for the enforcement of consumer protection, environmental protection, and financial regulation; and practically all of the federal government’s civilian public investments, such as infrastructure, education, training, and research and development.

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