Executive Summary

ON AUGUST 2, 2011 Congress passed the Budget Control Act of 2011, commonly known as the “debt deal.” The law raised the nation’s debt ceiling, averting what would have been an unprecedented and catastrophic abandonment of the country’s commitment to pay its bills. In exchange for increasing the U.S. borrowing authority, the debt deal requires at least $2.1 trillion in deficit reduction over the next ten years.

Almost half of the impending cuts will come from discretionary programs other than defense, such as state grants for housing assistance, funding to help families heat their homes during New England’s harsh winters, food and drug safety, and biomedical research. About one-third of this discretionary spending typically goes to local municipalities, but this is likely going to change as programs are scaled back to meet the spending caps imposed by the debt deal.

For most programs, the debt deal does not mandate which programs receive cuts or by how much. Instead, the law sets overall spending caps on two broad categories – defense and domestic spending. Congress must then decide during the regular annual appropriations process, how to live within those caps.

These cuts could hardly be coming at a worse time. Already, programs that support middle-class or low-income families in Massachusetts are experiencing shrinking resources. In times of financial crisis and high unemployment, the need for vital safety-net services grows just as a diminished tax base leaves programs with less funding. Massachusetts lawmakers and residents must actively fight to protect the funding and programs that form the building blocks of our 21st century economy: a high education and healthy workforce, high-quality healthcare, clean technology and biomedical industries, and research institutions that draw bright workers and billions of dollars into the state.

The full report can be found HERE.