NEW YORK – Automatic cuts would lop about $1.1 trillion between 2013 and 2021 if Congress doesn’t pass deficit reduction legislation, according to Congressional Budget Office estimates.
CBO estimates $454 billion in cuts in defense discretionary appropriations; $294 billion savings on discretionary appropriations for nondefense programs; $100 million less spent on nonexempt defense programs, savings of $170 billion in nondefense mandatory spending, including $123 billion in Medicare, and an estimated reduction of $169 billion in debt-service costs.
The $1.1 trillion estimate is lower than the $1.2 trillion figure for deficit reduction in “the Budget Control Act for three reasons,” CBO said. “First, because of the lag in timing between appropriations and subsequent expenditures, part of the savings from the automatic cuts in budgetary resources would occur after 2021. Second, CBO expects that some reductions-particularly those related to Medicare-would have other effects that would boost net spending (by the $31 billion mentioned above). Third, CBO estimates that the reduction in debt-service costs would be lower than the amount of such savings stipulated in the Budget Control Act.”
