Budget: Baby Terminator
7 May
Today the Administration released more detail for the President’s budget. The President tried to emphasize his fiscal responsibility by highlighting some of the programs he proposes to terminate or reduce. Budget Director Orszag released the Terminations, Reductions, and Savings volume.
This morning the President said,
But one of the pillars of this foundation is fiscal responsibility. We can no longer afford to spend as if deficits don’t matter and waste is not our problem. We can no longer afford to leave the hard choices for the next budget, the next administration — or the next generation.
That’s why I’ve charged the Office of Management and Budget, led by Peter Orszag and Rob Nabors who are standing behind me today, with going through the budget — program by program, item by item, line by line — looking for areas where we can save taxpayer dollars.
Today, the budget office is releasing the first report in this process: a list of more than 100 programs slated to be reduced or eliminated altogether. And the process is ongoing.
Here is a comparison of the budgetary savings from President Obama’s proposed discretionary program terminations and reductions, compared to those proposed by President Bush in his last budget:
Some observations:
- President Bush proposed $6.6 B (57%) more in discretionary program terminations and reductions than President Obama.
- Three-fourths of President Obama’s T&R savings come from defense.
- President Bush proposed 6.7 times more non-defense T&R savings than President Obama. (= 18.1 ÷ 2.7)
Now this graph covers only the proposed savings from annually appropriated (“discretionary”) programs. The bulk of federal spending is in the mandatory programs. I will cover that separately.
Today the President said, “But these savings, large and small, add up.” It’s too bad they don’t add up to more.
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‘Even though a less skilled worker has less valuable skills, does that automatically mean they should never be able to afford a house and family, or medical care?’
Not automatically, however if someone is unable to produce value to his fellow man that covers his/her consumption, then, yes.
That’s why we are in the current downturn. Congress, in its wisdom, several years ago decided they could pass a law and magically revoke the iron law of economics that you can’t consume more than you produce. If they hadn’t, we wouldn’t be in the mess we’re in right now.
Cynic is misinformed. Bush’s main expenditures did not go for tax cuts and Iraq. Bush added roughly 5 trillion to the debt in his 8 years. The bush tax cuts are estimated to have cost the Treasury about 300 billion over the same time period. Iraq has cost a little over a trillion. So even putting aside those two things, bush would have added about 3.5 billion to the debt. And the reason is that domestic spending programs are growing at ridiculous rates, far outpacing economic growth and tax revenues.
The Bush tax cuts for the wealthiest Americans, was an example of Democrat talking points that stuck. They still play on the same point when they claim Republicans have no new ideas or some variation on a theme of more tax cuts for the rich. The Republicans were ineffective in countering this message, unfortunately. It is largely a straw man argument that needed to be countered with facts.
I almost find the notion that the top 1%, consisting of largely the financial investors to varying degrees, were the sole focus of the Bush administration laughable. It is readily verifiable that this group gave to Obama huge political donations and unwavering support. While I certainly dislike Obama’s propensity to strong arm this group to gain greater control over the banking industry and other industry, it is hard to feel sorry for them personally. It was always plain to see for those that chose to open their eyes that Obama was not beholden to this group in the same manner he is to UAW and abortion advocates.
According to the a href=”http://www.ntu.org/main/page.php?PageID=6″>National Taxpayers Union those with AGI over $108,000 pay 70% of the taxes while the bottom 50% pay approximately 3% soon to be 0. I would suggest that those who fall in the precarious level of AGI over $108,000 but under $250,000 who will be rocked the hardest under the Obama administration. Obama can clearly afford to alienate this group completely so long as he has 50% of the voting public paying little or nothing. The only hope I see of convincing the bottom 50% they should care about extravagant deficit spending is to emphasize the enormous burden being placed on our children.
Cynic: As a “redst8r” I’m clearly conservative. Hopefully you’ll return to this comment stream. I don’t agree with much of your position. But, I’d appreciate it if you could recommend some responsible liberal economic blogs. I try to read what the other side says. It’s not as much fun but often more useful than reading what I, as you said, already agree with.
Much thanks for the references. I’ll give them a good read then go exercise to work off the stress.