In tomorrow’s State of the Union address, Obama plans to address the Bush/GOP deficit.
Looking to signal at least one step toward reining in huge federal budget deficits, President Barack Obama will propose a three-year freeze in non-security discretionary spending, senior administration officials said Monday.
His budget proposal, to be unveiled in part with Wednesday's State of the Union speech and in detail next week, will urge Congress to keep overall spending at $447 billion a year for agencies other than those charged with national security and mandatory-spending programs such as Social Security and Medicare.
The freeze would take effect with the 2011 fiscal year starting Oct. 1, and wouldn't affect the $787 billion economic stimulus plan already being implemented, the officials said.
It also wouldn't affect a $154 billion jobs plan pending before Congress and backed by Obama, the officials said. One aide said that plan would be exempt because it would take effect this year, before the freeze.
Administration officials, who spoke on the condition of anonymity to not upstage the president, said that the three-year freeze would save $250 billion over a decade — if it's approved by an election-year Congress.
After three years, the total spent would be the lowest as a percentage of the total economy in 50 years. Spending on those agencies has increased by an average of 5 percent a year since 1993, the officials said… [emphasis added]
Inserted from <McClatchy DC>
My knee-jerk reaction to this was to think he’s loony as a Tea bugger! Reduce spending during a recession is a GOP solution. Consider Hoover. After listening to a couple progressives, I decided to reserve judgment. The details will show. Our government is awash in corporate welfare. It would be possible for Obama to increase programs for Main Street and still achieve the savings by cutting the GOP’s No Millionaire Left Behind spending. So I’m going to wait and see how it develops before ASSuming the worst.
15 comments:
pretty much spot on, tomcat; although almost insignificant, the timing is wrong for any cutback, even though the proposal dont deal with the two elephants in the room, entitlements and defense (not much you can do about the interest gorilla, which will morph into kingkong once rates rise)...the chart is excellent, something ive tried to tell right wing deficit hawks all along...it dont go back to where it started, which was with johnsons "great society" guns n butter budget, but it was supply side economics that brought us here, between a rock of frugality & a hard place of increasing interest...i always found it odd that bush sr accused reagan of voodoo economics, but then adapted the same policies when he was elected...
Could save 3 billion just by cutting Israel loose.
shit, we couldve save a trillion just by not going into iraq...
video: Obama Campaigns Against Spending Freezes proposed by McCain
savings from freeze over ten years = $250 billion
cost of af-pak "surge" = $300 billion
And the defense budget is proposed at over $700B for the first time ever. We can't afford this BS.
Thanks, RJ. feel free to steal that graphic. I have from you. ;-) It's a bit to late to take what we spent on Iraq back. It was never counted as part of the budget until Obama insisted on honesty.
Mark, excellent observation.
Lisa, that is actually a cut in spending. If we add Iraq costs to Bush defense budgets, which he deceptively did not do, it was higher.
It looks to me like another pander to tea bagging, republican jerks who add nothing but the same old crap about cutting taxes and spending. Nobody will ever get a tax cut large enough to make a shit bit of difference in how he lives.
101: krugman agrees with you...his editorial: Obama Liquidates Himself - "Obama has embraced and validated the Republican world-view — and more specifically, he has embraced the policy ideas of the man he defeated in 2008. A correspondent writes, “I feel like an idiot for supporting this guy.”
I am an idiot at American politics
But with a savant's earnestness, wouldn't the whole budgetary thing be solved if America got the F... out of the middle East?
They're going to be kicked out, Vietnam -style anyway, so why not send the helicopters to the roof U.S. emabassy in Kabul today? They can all go home with a karzai under each arm.
Back home, there will then be enough money for everything, including social security, medicare and TARP...Even pay back the Japanese and Chinese.
But right now those %^$%#ing talking heads get in the way.
TomCat, every year, it seems, one of us in the liberal blogosphere must set the record straight about Republican “frame the deficit blame” on Democrats. This year is your year.
Last year was my year. Please feel free to steal this graphic. A few dozen liberal bloggers dropped it in their side bar for a few weeks. It made some wingers quite angry; some called me “liar” and one even threatened to blow my head off.
One of my prouder moments.
TC,
It's my understanding that Reagan literally did not understand the concept of debt in relation to GDP. When he discovered that total debt was higher at the time he was considering running for the presidency than it was after world war 2 he thought it indicated imminent collapse. the fact that it was a far smaller portion of GDP was beyond his understanding.
He may have already been suffering from Palinitis.
Octopüß, one misconception implicit in both your chart and tomcats is that deficit problem is all about spending, but thats only half the problem...the annual deficit is computed thus: spending minus REVENUES; & the reagan and bush deficits were largely caused by tax cuts...then you also have to remember that all those bars, being above the bottom line, are deficits, and thus accumulate into the ongoing DEBT, which we pay interest on, again adding deficits in the years following...so as i pointed out, that debt accumulation really started during johnsons term, and carter might have been in balance were it not for high interest rates on the debt during his term (i recall getting 15.6% on a 5 yrear CD)...though miniscule, we are still paying interest on some of the debt accumulated during WWII...our total govt debt is now over $110,000 per US household and rising rapidly...
this bar graph puts the spending & revenues in relation to deficits in perspective...
none of the official charts ive seen include off-budget items or unfunded liabilites, which are other bogeymen under the bed...
also, both your charts give deficits in absolute numbers, where you more rightly should be thinking about deficits, and more importantly, total debt, in terms of % of gdp, which gives an idea of how difficult it is to service the ongoing debt... heres the charts from this weeks CBO budget update showing both revenue a spending as a % of GDP...(note tax and spend = revenues and outalys) remember that as long as outlays exceeds revenues, you are accumulating debt, on which you have to pay interest (to china or whoever buy treasury instruments)
almost 3/4 of this years $1.5 trillion deficit is due to tax revenue lost because of the recession...
the problem going out is that as interest rates rise, the interest on the debt becomes and increasing larger % of the budget...like if you had personal debts so great that your paycheck couldnt keep up with paying the bills...sure, the Fed can electronically "print money" and buy that debt, but sooner or later that excess money trickles down into the economy, debases the dollar and causes runaway inflation...
the CBO figures the 2010 deficit will be about $1.35 trillion, or 9.2 percent of GDP...we could cut the deficit in half by 2012 if congress allows the Bush tax cuts to expire, & lets the Alternative Minimum Tax bite 30 million middle-class americans, et al...but none of that is going to happen....
RJS, please accept my thanks for your detailed comment. Like you, I too like to get under the hood with a more in-depth analysis (in fact, I will be posting soon an article on the effects of taxation on income distribution based on 100 year data).
My interest here is not an economic one but a political one, i.e., the GOP penchant for spin that pins blame on the donkey with language constructs and repetition of catch phrases that would exonerate themselves in the minds of the public. I call this "projection" in the extreme.
If you want to burst a false bubble, you need only a simple graphic that shows in broad strokes who contributed what and when to the overall deficit picture. Component breakdowns distract from the overall picture and from the need to set the record straight.
No matter how fine you parse the component data, the 82% figure is essentially accurate, and it annoys the hell out of supply-siders ... probably a good sign.
Keep in touch.
one more link to add to put the $250B spending freeze in perspective:
$300 billion F-35 fighter jet - Deputy Defense Secretary William Lynn on Thursday [21 Jan 10] underscored the Pentagon's commitment to Lockheed Martin Corp's $300 billion F-35 fighter jet, saying the U.S. government and its allies still planned to buy 3,000 of the new fighters over time.
Truth and RJ, I think it more likely that he appropriated their language to disarm them rather than their ideas.
Ivan, the fiscal argement against that idea is that thousands of arms jobs would be lost. My reply is retrain the effected workers.
Thank you Octo. I did and have it on file for the future.
Oso, Reagan made up with his inferior intelect with great communication skills. GW eas that way too, but without the communication skills.
RJ, Octo beat me to the argument on the charting. You are correct that this proposal is just a drop in a huge bucket.
Post a Comment