The Cut, Cap And Balance Two-Step (Part 1)Posted: 29 July 2011
This may have been defeated….but you WILL see it again…trust me.
A lot of media has been dancing around the newest budget two step……called the Cut, Cap and Balance Act of 2011….I know if you are at least mildly interested in what is happening in Washington, you have heard the term used and most likely, used often……..but what is it? (I know that is on your mind because the media is very cloudy on the issue)…….
First of all the different parts of the act……..
- Cut – Substantial cuts in spending that will reduce the deficit next year and thereafter.
- Cap – Enforceable spending caps that will put federal spending on a path to a balanced budget.
- Balance – Congressional passage of a Balanced Budget Amendment to the U.S. Constitution — but only if it includes both a spending limitation and a super-majority for raising taxes, in addition to balancing revenues and expenses.
I will set about to explain each part of this issue as best as I can…..but wait! I seems that someone has beat me to it….a great site, Blue Wave News (go to blogroll and visit)……….one of their writers a FleetAdmiralJ, a Dem no doubt has done an excellent job of explaining each part of the Act…….I will breakdown his post in 3 or 4 parts or if you are in a hurry go to my blogroll and click on the site……..http://bit.ly/mRYhLS
Title I: “Cut”
Title I is, appropriately named, “Cut.” It’s meant to cut the 2012 federal budget. Sec. 101 would cap discretionary spending budget authority for FY 2012 at $1 trillion, 19.4 billion and would cap FY 2012 discretionary outlays at 1.225 trillion.
Just for comparison, FY2010 (which is the last year we had a real budget), the total discretionary budget was $1.378 trillion, so that would be a cut of $349 billion for budget authority and $153 billion in outlays. And that’s not taking into account any increase in defense spending between FY 2010 and FY 2011. Based on FY2010 numbers, a $349 billion cut in appropriations would result in a essentially a 50% cut in non-defense discretionary funding, if no defense funding were cut from FY2010 levels. Even if one went with the $153 billion in outlays, that’s a 21% cut.
Just for some scope, to make up $349 billion, we would have to eliminate, entirely, the Department of Health and Human Services, the Department of Transportation, the State Department, the Department of Housing and Urban Development, the Department of Education, the Department of Energy, and the Department of Agriculture (give or take a billion).
(To make up $153 billion, if you want to use that number, you would merely only have to cut Health and Human Services and Transportation, plus another 2 or 3 billion).
If one were to carry that cut over 10 years, one would be looking at $3.5 trillion in cuts from the discretionary budget alone based on budget authority, or $1.53 trillion using the outlays number, assuming budget growth is equal to inflation.
Title I also caps the money that can be spent on the “Global War on Terrorism” (their term in the bill) at $126.5 billion. I’m not entirely sure if that is in addition to the discretionary spending or not.
Title I then also caps direct, or mandatory spending, at $680.7 billion, exempting Social Security, Medicare, Veterans Benefits and Services, and national debt interest (note: Medicaid is NOT on the exempted list). This may or may not result in any mandatory cuts in 2012. Based on FY 2010 numbers (PDF), that would be a cut of $60.3 billion (taking out gains from TARP), though would be pretty much even with expected expenses based on FY 2012 projections made in January 2011.
My final analysis of the entire act will be in the last part of this series……please keep reading and let me know what you think of each part or the whole thing….your choice…..