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View Full Version : Economics Why $38.5B budget deal will only cut spending by $352M


FishingRod
04-14-2011, 02:41 PM
By National Journal national Journal Thu Apr 14, 12:27 pm ET
By Tim Fernholz
National Journal
A Congressional Budget Office analysis of the fiscal 2011 spending deal that the House passed Thursday concludes that it would cut spending this year by less than one-one hundredth of what both Republicans or Democrats have claimed.
A comparison prepared by the CBO shows that the omnibus spending bill, advertised as containing some $38.5 billion in cuts, will only reduce federal outlays by $352 million below 2010 spending rates. The nonpartisan budget agency also projects that total outlays are actually some $3.3 billion more than in 2010, if emergency spending is included in the total.
(Six-month funding bill queued up for passage)
The astonishing result, according to CBO, is the result of several factors: increases in spending included in the deal, especially at the Defense Department; decisions to draw over half of the savings from rescissions, which are funds previously authorized but not spent; cuts to reserve funds; and to mandatory-spending programs, such as certain farm subsidies.
[ For complete coverage of politics and policy, go to Yahoo! Politics ]

National Journal previously reported that after removing rescissions, cuts to reserve funds, and reductions in mandatory-spending programs, discretionary spending would be reduced only by $14.7 billion. CBO's analysis, which takes into account the likelihood that certain authorized funding will never be spent, suggests that the actual cuts will be even smaller.
Some conservatives already opposed the deal for not going far enough to meet the GOP campaign pledges to cut $100 billion. The minimal effect on current government spending, however, could improve macroeconomic forecasts that predicted lower economic growth if government spending was drastically reduced.
"This bill will cut $315 billion in Washington spending over 10 years, $78 billion compared with the President's request this year alone," said Michael Steel, spokesman for House Speaker John Boehner, R-Ohio. "Democratic spin and arcane budget jargon doesn't change that."
(Obama's speech defines debate: Cut-to-grow vs. "shared prosperity")
The CBO did confirm that budget authority would remain $78.5 billion below what President Obama requested in his fiscal 2011 budget request, and Republicans can point to long-term savings as a result of lowering the government's spending baseline, including some $40 billion from cuts to Pell Grants.
"It is kind of crazy to have come to the brink of shutting down the government over a $350 million difference," said Scott Lilly, a former staff director at the Appropriations Committee under Chairman David Obey, D-Wis.

Ericgoodchief
04-15-2011, 02:23 AM
John Boehner needs to resign as House speaker.

hotair . com/archives/2011/04/14/atr-calls-ap-report-on-budget-deal-attempt-to-move-the-goal-posts/

Jaric
04-15-2011, 07:18 AM
I'm pretty sure the term for this is "Dog and pony show."

Bewbies
04-15-2011, 07:43 AM
This makes all the bragging on tv about all the hard work they've all done even more hilarious.