CBO Details Spending Cuts if No Deficit Deal is Reached

October 26, 2011

If a $1.2 trillion deficit-cutting deal is not reached and approved by Congress this year, automatic cuts would lead to significant cuts in discretionary spending, according to a new estimate by the Congressional Budget Office.

CBO predicts that defense-related appropriations, not counting overseas contingencies, would be $110 billion — or 16 percent — lower by 2021 than if current spending simply tracked with inflation.

For non-defense appropriations, the figure would be $99 billion — or 15 percent — lower by then.

Overall, discretionary spending would account for 71 percent of the net savings generated by automatic budget cuts that would begin in 2013 if at least $1.2 trillion in deficit reduction is not enacted by Jan. 15

CBO Director Douglas Elmendorf outlined his projection during a Wednesday hearing of the Joint Select Committee on Deficit Reduction, also known as the super committee. 

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