Wednesday, July 27, 2011

Budget Cuts? I'll Give You Budget Cuts

This entire debt ceiling fiasco is wrapped around the issue of budget cuts and increasing revenues (or not).  So let's do an exercise shall we, using available online tools.  You too can show your elected officials how to do their job.

Since the Republicans, especially those beholden to the Tea Party, don't want to let the Bush tax cuts for the wealthy to expire and only want to talk cuts, let's try it their way.

For an interactive pie chart on the 2012 budget (which is the one that matters for this exercise) go here.  Let's agree that the cuts are immediate, thus starting in 2012, and our target is to get to zero.  Probably an extreme approach, but since ideology rules Capitol Hill these day, why not be extreme?

Here's what I keep (in billions);

  • Pensions (Soc Sec and Fed Pensions)  805.6
  • Health care (no R&D)                            830.1
  • Defense (no foreign aid)                         862.2
  • Welfare (no EIC or Child Tax Credit)         87.0
  • Protection                                              58.7
  • Transportation (hwys go to states)            32.8
  • General Government                                32.6
  • Other Spending                                        25.8
  • Interest                                                  241.6

Total Outlays                                           2976.4
Estimated Receipts                                  2609.0
Deficit                                                        367.4

Now, to reiterate a couple of items; I cut all highway spending out, let the states take care of it.  Aviation is not so easily passed off, neither are the waterways especially when we are talking the Coast Guard.  I kept General Government intact, it includes all of Treasury, GSA, White House outlays, and Congressional and Senatorial outlays.  I seriously cut Other Spending.  I kept Superfund, Water Supply, and Disaster Spending.  Not much else.

So, someone's ox, perhaps several oxen, have been gored.  Has yours?  Got a better idea?  Great, share it here.  You like what I did?  Share it with your representative.

However, please note; we still run a deficit.  Unless the Bush tax cuts are repealed, that deficit stays.  If you are bound and determined not to raise taxes you will have to seriously look at Defense and Health Care and Welfare.  The only rational things you can do with Pensions are to phase in a raise in age for eligibility, consider the formulas for calculating pensions, and consider the formulas to provide COLAs.  Trust me, none of the foregoing will go down well with anyone, but it is the kind of conversation we must have.  Especially if you want to bring back the stuff I cut out of the budget.

I told a family member that you would still have a deficit even if you cut everything you could.  So let's cut some more and see where that takes us.

Getting to Zero Deficit;

  • Pensions (Soc Sec and Fed Pensions)  805.6
  • Health care (no R&D)            830.1
  • Defense (no foreign aid)         862.2
  • General Government               32.6
  • Interest                                 241.6

Total Outlays                               2772.1
Estimated Receipts                      2609.0
Deficit                                            163.1

General Government simply hasn't got enough there to make up the difference, and you have to pay those costs or you have no government at all.  We are back to the items that need deep attention and aren't getting it.  Taking out the Welfare payments means no unemployment, no housing assistance, no food stamps, nothing for the poor and most vulnerable among us.  How's that compassion thingy working for ya?

Tell me again how we zero out the deficits without pursuing Defense, Health Care, Pension and tax code reforms?

No comments: