Budget announcement 10:00 AM today
Via Business Insider Joe Weisenthal reports some of the buzz in DC:
The White House is officially going to release its budget for the coming fiscal year at 10:30 this morning. The full announcement will be found here.
Of course, several members of the media have the details already.
CBS’s Mark Knoller has been tweeting details, including:
- The budget will claim $1 trillion in deficit reduction over the next 10 years.
- During that time, however, total deficits will hit $7 trillion.
- Over 5 years, there will be $78 billion in defense spending cuts.
- There will be a 5-year freeze in discretionary non-defense spending.
- 3 year AMT patch will be proposed.
What’s not in the budget? Anything relating to Social Security and other entitlements.
Meanwhile, POLITICO has more details:
- Education spending will increase 11% next year.
- Foreign wars will cost $118 billion.
CNBC’s John Harwood also notes that the budget will include phase-outs of varous tax breaks.
We’ll be updating LIVE as we get more details and reactions.
Read more: here
As in any budget proposal.. I’m sure assumptions for economic growth, and interest rates, are optimistic..
So assuming good things there; I see a total debt at $22T, and still growing at $1T / year ?
One of the biggest problems we face, is the interest rates we’ll have to pay while generating new debt, and applying those rates to debt that needs to be re-financed.
I’ll be interested (pun intended), on what happens to interest rates as total debt passes, 100, 115, 120 % of GDP..(let alone near ~150% percwent and still growing per this proposal), and if the proposal recognizes this… ’cause if it doesn’t account for a realistic increase in rates.. well .. let’s wait for details.
If we have to raise the rate on new bonds/treasuries even one percent; the slice of the budget going to service the debt explodes.
The Business Insider article references the president’s February 2012 Budget Request which was trumped by Ryan’s House of Representatives 2012 Budge Resolution. Today we should see the president’s revised budget, which is being presented because of Ryan’s version and the 2011 Continuing Resolution.
What should have happened, in the normal series of events, is a Senate 2012 Budget Resolution should be presented, and negotiations to eliminate the differences between the House and Senate versions would be starting.
All of this is in the Budget Act of 1974. Here’s the Wiki link describing it: http://en.wikipedia.org/wiki/Congressional_Budget_and_Impoundment_Control_Act_of_1974
The Democrats failure to enact a 2011 budget is behind much of the ongoing budget dialog/angst. Republicans in its Continuing Resolution (CR), have just proposed cuts to the 2011 President’s Budget Request, while we are in the middle of the 2012 budget process. This CR, which still needs to be voted upon, finally creates a Budget for the remainder of Fiscal Year 2011.
All of this background to point out how egregious was the Democratic budget/legislative actions while they have been in control of Congress. Under their leadership spending has gone up nearly 30%. Under their leadership we have no 2011 budget. Under their leadership we have seen some of the largest most unintelligible legislation, Stimulus and healthcare are examples. Under their leadership we have seen common sense rules for legislating, abbreviated time for public review and time needed for members to review, are examples.
From a conservative’s view these legislative failures are examples of Congressional ineptitude or willful disregard for common sense rules and laws controlling their actions. If you couple these legislative actions/failures with their take no prisoners over the top rhetoric against the Republicans, its easy to see why there is a Tea Party, and why we had results of the 2010 elections. Congressional Democrats are out of step with the average American.
Wow! I just heard two things that amazed me on a morning talk show.
The first which applies directly to this thread is that the president is declaring a mulligan on his already submitted Budget Request. I’m not a golfer, but it does describe what’s going on with the 2012 budget negotiations.
The second was a description by a Congress critter of what not raising the debt ceiling actually means. To paraphrase: If not raised ALL spending will be be re-prioritized to fit within the available revenues. Much like a balanced budget amendment.
It doesn’t means we default, the government shuts down, or other world ending hyperbolic pronouncements. It also does not happen suddenly, it will take months to see the full effects, but, it will be a dramatic change to see us living within a balanced budget. It also creates a filter to determine our spending priorities outside of a pure political arena.
Even a short period could be palliative by stripping out the redundant and low priority spending passed and re-passed in the annual budgets.
If not raised ALL spending will be be re-prioritized to fit within the available revenues. Much like a balanced budget amendment
Wow. If true “this changes everything.”.
It seems to me that the GOP has figured out how to make Mitch’s Bitch a one term president no matter what clown they run. We would not be having this debate if Obama had simply let Dumbya’s tax cuts expire–everyone would have paid more and they should. It would not have put much of a brake on the economy because those making less than $250K did not get all that much from Dumbya’s tax cuts in the first place. If Obama had not bent over for Mitch McConnell, he still could have gotten an extension of unemployment insurance in return for giving away half the store on estate taxes. It was likely the worst move by a politician in my lifetime and IMHO vaulted Obama ahead of Dumbya as the worst president ever. We are now going to see the chickens really come home to roost from that debacle. The recent compromise on keeping the government open was just a warm up. Cantor has said the GOP will not even consider raising the debt ceiling until after May 16. Co Rev is right that the government will not actually default until a month or so later and presumably that could be extended by some really radical action–like beginning to recall all foreign service personnel right now, cancelling all defense contracts, disbanding Homeland security, eliminating the FDA, downsizing the Department of Justice, closing Gitmo etc. If we had a president with an ounce of intestinal fortitude he would put that all on the table if the House does not return a clean bill raising the debt ceiling within 2 weeks. Instead he will reluctantly throw 98% of Americans under the bus to “save the country” because those mean Republicans made him do it. The economy will retank–shades of 1937 and 2011 Britain and the GOP will win the White House and the Senate in 2012. By 2013 Medicare and Social Security will be gutted and the Teabaggers will be wondering how this happened. Mitch’s Bitch–the guy who oversaw the U.S. becoming a third rate banana republic.
Wow, so everything CoRev has uttered (and sammy, too, apparently) regarding the debt ceiling to date has been uttered in ignorance of how the process works? I’d never have guessed. Do you guys never tire of this whole spin thing? Do you have real jobs?
There are estimates….why not give us several?
KH, do you have a specific point? Terry has provided a list of possible impacts if the debt ceiling is not raised.
What I would expect if it actually was not increased is a re-prioritizing of ALL spending. The low priority items, maybe some of them are on Terry’s list, will be targets for immediate cuts. Congress in the weeks while the debt ceiling impacts are being implemented will rewrite several laws to cover the short term impacts, AND write some new tax/revenue to cover the difference between cuts and prior revenue.
But, I doubt if any of this will happen. Expect to see some indexing in future budgets and if they are actually serious indexed future debt ceilings.
It really isn’t near as scary a prospect as we are being presented by the talking heads. But, nearly all the leverage seems to lie with Congress. The president has little he can do but react.
Corev….You have got to be kidding…outside of the political arena? Only in the political arena describes the process, and follow the money and the lobbyists.
And a balanced budget is a dramatic change…one in a few months would be amazing indeed. And so cut and dry sounding….
I doubt ALL spending would be treated the same…reminds me of the election of 1800 back in the day, without the issues being so well defined as then.
K .. will do : )
But first.. just the difference for a current deficit level.. 0.01 X $1.6T = $16B
$16,000,000,000 in just extra interest, on just what’s added to the debt this year.
Now, the big numbers will come from the amount of the exisiting debt that gets refinanced.. that’ll take some research, as I need to know how much is (or will be) refinanced under which terms (ie.. 1,2,3,5,10 years)( bills,notes,bonds), because if a note at 2.4% goes up one percent.. a bond at 5.9% is likely to go up 2%.. etc..
Just for quick reference.. consider what happens to a 30year mortgage payment, when the rate goes up 1% !
RweTHEREyet: “One of the biggest problems we face, is the interest rates we’ll have to pay while generating new debt, and applying those rates to debt that needs to be re-financed.”
A good argument for creating some money without borrowing. Even if doing so is inflationary, deflation is the danger now. (Please note that I am not saying that we should pay off the whole debt with new money, or even pay the whole deficit that way. But history shows that it is not a bad thing to have **some** money that is not debt.)
CoRev: “Even a short period could be palliative”
Even a short period could be a disaster, too.
Agreed… Ideally, un-borrowed money finds its way into the economy, proportional to economic growth.. no debt, no inflationary influence.. just a total money supply (M3 I believe) in line with a cummulative GDP.
That brings up a worry of mine dating way back.. Speculative wealth, in its ugly form, could be simplified down to two companies bidding each other’s stock up (paying/repaying each other on paper), and then selling that stock to third parties.. In theory, total wealth has grown, and the economy requires justifiably un-borrowed money. Some even say that the Fed didn’t keep up with that type of wealth as the market boomed, hence “printing” money today isn’t that out of line… and is actually much better than had the “money” already been out there, when the bottom fell out.
I guess it’s a matter of lesser disasters … lordy, how did we get here ?
Dan you dropped a word …pure political arena…. Maybe purely or totally political arena is clearer? All we have seen recently is political posturing.
Otherwise your point is taken.
Min, a short periond ~ 1 month would have little effect but to identify the real high priorities from the lower priority spending needs. My earlier comment was trying to reduce the politcs from that racking ans stacking effort. Some would remain in the decsion making, but even the associated politics would be priority driven.
Yeah that medicare prescription coverage bill was a real model of transparent and honest legislation.
Or legislative leadership if you prefer.
We now have the president’s deficit proposal. It is based upon raising taxes, letting the Bush tax cuts expire, and some minor spending cuts. He claims a $4T savings over 12 years. That averages ~$333B per year. Treasury estimates that letting the complete set of Bus tax cuts expire would add ~$81B in 2011. So how does Obama propose to add the other 3/4 of his annual savings? Do you actually believe eliminating the deductions for the rich adds that much?
It appears or at least was hoped the Ryan plan would change the rhetoric in DC, but it also appears that’s all we are getting from Obama, more rhetoric.
Remember,, the upper 2% are just 2%… The type of taxation needed on them (above and beyond wht they’re already paying) to even scratch the deficit, is an amount that will not only drag the economy down.. that money won’t be there for round two of confiscation.
Then what ?
We not only need to cut spending.. we need to eliminate entire, governmental departments.
I for one am hoping that every GOP presidential candidate runs on exactly this fiscal strategy. Please!
I wish they didn’t have to, but we’re out of choices..
When it likely defeats them/him/her; whatever pain those cuts woulda caused, will be small compared to what happens when we keep cruising DEEPER into debt..
Funny thing.. I don’t even have a dog in this fight.. I’m well over 50, single, no children to live in the aftermath..
It’s a beautiful thing…
“Please give generously to help elect Newt/Mitt/Mike/Sarah/Donald protect us from the devastating return of the tax rates that led to the Clinton Collapse!”
Uh…. no wait…
This is a completely different world.. Clinton-era tax rates would be an almost un-noticed effect on this deficit/debt.
Do you remember what the average budget was during his presidency ?
Do you realize that this year’s deficit alone, is nearly as large as any of his total budgets ?
We passed the point where taxation can get us out of this.. we’re talking about a debt equal to $150,000 per household !
…. and growing at $16,000 per year..
I love this assertion: “We passed the point where taxation can get us out of this..”
Sorry underwater households the only path to avoiding bankruptcy is liquidating your retirement and your kids educations, health care, infrastructure etc.
And just in case deficit pandering to the “no new taxes” crowd doesn’t work I note with delight the possible entrance of Senator Man on Dog for the fetus in a bottle icky stuff types.
Sarcasm aside.. you about summed it up.. it’s either cut painfully, or fold into bankruptcy..
Get back to where education is a local thing.. and retirement/health-care is a personal thing… not all at once, but start heading that direction.. we cannot sustain the current, federal government.
Seriously digest what I said a couple posts ago.. we are borrowing an amount that woulda funded the entire government a couple of presidents ago.. let that sink in. And even back then there was a sober argument that government was too big, doing too much.. now we’re just in a twilight-zone.. I don’t think it’s really sunken in, just how broke we are… and how big the government has gotten (both in size and cost)..
Sorry. I didn’t buy that argument from Slick Willie and it’s not any more convincing from you.
Fair enough : )
Clinton’s success was not based on the tax rates during that period alone. Only you and Kimmel beleive that crap!
AS, still has yet to do the math. We’ve provided most of the numbers for you in the past few weeks. Going back to before the Bush tax cuts gets us ~$82B per year. That still leaves $1.2T in deficit for this year. Close down DOD and we can cut the deficit another ~$6-700B leaving still ~$600B in deficit for this year alone.
Now your liberal hearts will start a campaign to pay those no unemployed defense/military workers unemployment. That raises the deficit back by $XXXB. You can fill in the amount when you feel happy. If you are really mean and penurious you will have dropped this year’s deficit to ~$900B to $1T.
What is obvious to all but a liberal mind is that the “let the Govt do it” policies are what got us here. Not tax cuts, not “unfunded” wars, but extraordinary social spending programs that do not pay back anything but always take from the producers.
After we point out these difficult issues we get the KHarrises, ASes, Jack’s, Terry’s, Run’s snarky responses, and the final straw is the diversionary discussions to saving Social Security, a non-issue.
The best analysis I’ve seen today of yesterday’s speech include the observation that this is Obama’s first major campaign speech for 2012. And just as in 2008 he is giving pause to the hippie punching long enough to point out how insane his opposition is.
The biggest problem I have with Obama’s speech isn’t the abandonment of the disastrous W tax cuts. I just have no idea whether this is Candidate Obama or President Obama speaking. I tend to suspect the former. Just like with the war and Guantanamo et al in 2008.
The only thing the GOP field is missing now is a Rick Perry or better yet brother Jeb to provide that frisson of remembrance of things Dubya. C’mon Rick don’t tell me you went on the Daily Show just to sell a book nobody will read!
And relevant to another thread topic I guess there is no point in actually testing the assertion. I mean if you’re serious and all.
The only thing that matters at this point is that the majority of Members of Congress understand the general scale of the Federal debt problem.
Bloggers who don’t get it at this point aren’t going to change any of the concerns by Members of Congress, CBO, CBPP, GAO, and others who grasp the issue.
It has been explained by budgeting and financial experts that raising Federal taxes alone will not solve the growing Federal debt problem. Federal expenditures will also be cut.
The Federal debt issue is front and center. It will not be pushed off the national decision table by bloggers and others pretending that there is no problem. These people are the equivalent of flat earth promoters. Their time is past.
The only serious questions in play are those which focus on how to address the problem.
Or maybe Donald Trump’s team of crack birth certificate investigators will turn up something worth talking about. With his showbiz chops maybe a prime time special with Geraldo Rivera would be suitable for the breathtaking revelations.
Seriously, though focusing narrowly on the policy details is exactly what the white house wants and hopes for. Because it will help the GOP ignore how completely the political optics of refusing to raise taxes on the richest americans is going to hand them another McCain style shellacking.
I think those ancient British funny guys tried that one satirically: “Sorry children you’re all going to have to be sold for medical experiments”
Kevin Drum courtesy Mother Jones, commenting on the speech:
“In the past decade, Republicans slashed taxes, started two wars, approved a big unfunded entitlement, and presided over an economic collapse that cratered tax revenues and required massive government spending to counteract. That’s pretty much 100% of our existing deficit problem right there. All we’re doing now is trying to clean up the mess the GOP has left us.”
I don’t think the “it’s all Bush’s fault” argument is going to work again.
Unless all the GOP has is retreads of W policies.
And returning to MG’s first assertion, the only reason a majority of congress critters matter about anything is if BO can’t find his veto pen.
AS, I see you prefer to snark from the sidelines than address the issue. OK.
Since Kevin Drum believes: “That’s pretty much 100% of our existing deficit problem right there. All we’re doing now is trying to clean up the mess the GOP has left us.”
Please explain this: Bush left in 2008 with a total public debt of $5,803B the estimated public debt for 2011 is $10,293B. that’s a 77%+ increase in three years under Obama. Now the Republican congress is trying to clean up the mess liberal/progressive/Democrats have left us.
As always YMMV.
Bush entered office with a budget running surpluses. How much of an increase is 5,803B from zero? My calculator doesn’t do that as a percentage for some reason.
Some assertions don’t deserve more than snark. Some don’t even deserve that.
Apparently 59 GOP members didn’t show up for the clean up crew today. Only a democratic president would negotiate with a guy who can’t deliver his own Caucus.
ZERO????? Sheesh!!!! You just showed how little you know of federal budgets. At the end of Clinton’s administration in 1/2001, debt held by the public was 3.3T. Long way from zero.
Sorry misread public debt as deficit. So anyway the public debt was lower at the end of slick willies last year in office than in the previous year. For the deficitphobic the overall direction was correct, no? Despite the D by the name of the president?
And more to the point of your sheeshishness wouldn’t it be pretty difficult to compare FY deficits between Obama’s inaguration and Ws? I mean in a way that would be expressable as a percentage change? 🙂
AS, if you believed Mike Kimel it would be easy. Clinton had eight years of a benign growing economy. He rode the IT bubble until it burst in 2000. Bush pulled us out of that recession, and adjusted to the changes caused by 9/11. He also rode a bubble until it burst. It is these major differences in economic circumstances between presidential terms that makes Mike’s single variable analysis/correlation ridiculous.
As far as your foolish request to compare the ClinBushton/ characteristics of performance measured by deficit percentage, Bush, had he been as lucky economically as Clinton (8 years of a growing economy), Bush would have balanced the budget two years earlier than Clinton. His 2007 deficit was ~$162B while the four prior years saw drops $80-$100B/year. Six years versus eight to a balanced budget while recovering from a recession, fighting two wars, recovering from an attack on 9/11, passing and paying for an “unfunded entitlement” (your words), oh, lest we forget lowering taxes. He just wasn’t as lucky as St. Bill with book end recessions, but a better performer.
I can point to several Bush policies that got us out of the first recession, improved the economy, and reduced the deficit as the economy improved. I can not do so for Obama, and surprisingly Clinton. Many of St Bill’s policy successes have to shared with a Republican Congress. Obama, the blank slate, is clueless, causing as much damage as good.
For all your misguided bluster, you really don’t have much truth to support it.
“And returning to MG’s first assertion, the only reason a majority of congress critters matter about anything is if BO can’t find his veto pen. “
That concern has but a 20 month shelf-life 😉
more sheeshery! voila!
Yeah right. All you need is 271 electoral votes for the winner of the upcoming GOP primary freakshow. I like these odds.
You deserved it. BTW, this comment was also interesting: “Unless all the GOP has is retreads of W policies.” Why would we worry about more Bush retreads. The best is already in the WH. ;-))
Super interesting how the crossing of that “can’t fix this with taxes” threshold occurred only after democrats took nominal control of tax policy too. I said nominal.
“Super interesting how the crossing of that “can’t fix this with taxes” threshold occurred only after democrats took nominal control of tax policy too. I said nominal. “
Nah.. the threshold cares not who does the taxing… we got a debt that is nearly EIGHT times a single-year’s revenue,.. and a single-year deficit larger than entire federal budget from just a decade past.
Even if you could get an ADDITIONAL quarter-million form the infamous top 2% .. (which is silly becaues that group begins where TOTAL, before tax income IS a quarter-million), it would only yield an additional $500B … barely 1/3 of one year’s deficit.. and even if you could extract that much.. it aint gonna be there to extract the following year… not to mention what taking that much money out of the economy would do TO the economy; manifesting itself in lower tax revenue, to boot.
You’d have to nearly double ALL revenue coming into the federal government to get into surplus territory.. does that hit home ? .. double EVERY form of revenue.. ALL tax brackets.. all consumption taxes.. all fees.
You’d get a surplus ( a small surplus), for that year.. and then even you have to realize in what state that would leave the economy.
THAT, is how broke we are..
Really!?! You do realize the CR passes? You do realize the CR passed with over 80 Dem votes? You do seem to forget the past years under Pelosi, where Repubs were united on the key legislation?
that money won’t be there for round two of confiscation.
Then what ?
“[Uncompensated] Expropriation. “
Yeah.. Maxine Waters let that plan slip out…
Good thing that liberty runs deep in our societal DNA.. Though it would be interesting to see that battle sans several, significant Constitutional amendments
I realized today that The Donald may have an unusual set of qualifications for the presidency. His business has declared bankruptcy 3 times. Not sure he’s going to be working that into a stump speech anytime soon though…