Wednesday, November 3, 2010

Biased Opinion - Marsha Blackburn and the Federal Budget

Last night, as the Republican Party took control of the House of Representatives and pared down the Democratic majority in the Senate, Chris Matthews interviewed Republican Congresswoman Marsha Blackburn about how to balance the budget. And Mrs. Blackburn quickly demonstrated that she has no fucking clue concerning the nature of the Federal budget. Either that, or she does understand the Federal budget, and considers Matthews, Maddow, and you and me simply too stupid to see through her bullshit. She first states that we must keep the tax reductions and repeal the Health Care bill, and then when asked how she would balance the budget that she would endorse "across the board" spending cuts.

And then she runs right off the rails.

Matthews asks if this means she is prepared to cut social security, medicare, defense spending and so on. Blackburn immediately backtracks saying that she meant across the board discretionary spending cuts, but that discretionary spending does not include defense spending. At this point, Blackburn has excluded almost all of Federal spending from her definition of "across the board" spending cuts. Some people might be confused by this, but the fact is that in the Federal budget request for the 2009-2010 fiscal year "mandatory spending" (which covers social security, medicare, medicaid, interest on the national debt, and other mandatory entitlement programs such as food stamps) accounts for sixty-one percent (61%) of total Federal spending. Of the remaining thirty-nine percent of federal spending that constituted "discretionary spending", the Department of Defense accounts for just under half of that (48% of discretionary spending), or about eighteen point six percent (18.6%) of total Federal spending. The rest of the government, the part that Blackburn says she'd advocate as candidates for "across the board" spending cuts amounts to just a touch more than twenty percent (20%) of federal spending.

Now before we go on, stop and think about this for a minute. Everything the Federal government does that is not social security, medicare, medicaid, interest on the debt, or defense spending amounts to about 20% of the total amount of money the Federal government spends in a typical year. That includes the Departments of Justice, State, Commerce, Energy, Agriculture, Transportation, Interior, Treasury, Labor, HUD, HHS Homeland Security, and Education, plus NASA, the National Science Foundation, the Small Business Administration, the administrative costs of running the Social Security Administration, and pretty much everything else falls into that 20%. And before someone runs out and starts talking about how much the TARP funds have cost us, the 2009-2010 budget request includes no spending on TARP.

(Just for the record, the budget for NASA amounts to 0.5% of Federal spending in the 2009-2010 budget request. The budget for the National Science Foundation amounts to 0.2% of Federal spending. We spend almost nothing on science in this country).

And even if you cut the budget for all of those agencies to zero, the U.S. would still run a deficit. In 2010, the Federal government estimates it will have receipts of $2.381 trillion (income taxes, social security taxes, corporate taxes, excise taxes, customs duties, and estate and gift taxes for the most part). The total Federal outlays are projected to be $3.552 trillion. This leaves a total deficit of $1.171 trillion. Non-defense discretionary spending in the 2010 budget request amounts to about $704 billion. So, exactly how does Mrs. Blackburn propose to make even a remote dent in the deficit by means of her targeted cuts? (You cannot exclude so much of the budget and credibly call them "across the board"). Either she is shockingly ignorant of the Federal budget, which is inexcusable for a sitting member of Congress, or she thinks we are too stupid to understand that she is spouting bullshit, which is offensive in the extreme.

At this point I'd like to point out the difference between the Federal deficit and the Federal debt. The Federal deficit is how much money the Federal government spends over the amount it brings in during a single year. The Federal debt is the total amount that the Federal government owes overall. While the 2009-2010 Federal deficit is currently projected to be a mammoth $1.171 trillion, the total Federal debt as of October 2010 is a gargantuan $13.6 trillion, more than thirteen times the current deficit. (For comparison purposes, the total gross domestic product of the United States is about $14.3 trillion).

We simply cannot hope to balance the budget by nibbling at the margins like this. It simply cannot be done unless we decide to seriously tackle the question of mandatory spending. And by that I mean addressing the cost of programs like social security, medicare, and medicaid, which make up the lion's share of mandatory spending. We are going to have to take real steps - raising the retirement age, means testing social security, reducing benefits and so on and serious spending cuts in the Department of Defense as well as other areas if we want to have any hope of ever balancing the budget. And we may need to raise more revenue to boot. Mrs. Blackburn claims she wants to have an "adult conversation" about balancing the budget, but then resorts to childish attempts to deflect the conversation from where it needs to be. This is where the adult conversation needs to start. At the current rate, the Federal debt is projected to reach $20 trillion by 2015. The Federal government, at some point, will be unable to borrow money any more.

This is not a question of ideology, or economic models, or party allegiance. This is simple math. We have to get our financial house in order, and quite simply, I don't think that either of the major political parties is prepared to even consider doing what needs to be done in order to accomplish that.

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