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Home Publications Blogs Beat the Press The Impact of the Budget Deal for Those Who Don't Carry Around the Budget in Their Pocket

The Impact of the Budget Deal for Those Who Don't Carry Around the Budget in Their Pocket

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Monday, 01 August 2011 04:22

Many readers of the NYT and Post may not have a good sense of how much $2.4 trillion in cuts over the next decade is. Unfortunately, the major news outlets do not consider it their responsibility to tell us.

The government is projected to spend $46 trillion over the next 10 years. This means that the proposed cuts are a bit more than 5 percent of projected spending. However, large categories of the budget are protected. More than $27 trillion of projected spending goes to Social Security, Medicare, Medicaid and interest. If these areas escape largely untouched, the projected cuts would be around 13 percent of the remaining portion of the budget.

In fact, since some other areas of the budget, like unemployment insurance, are also likely to be largely protected, the cuts to the remaining portion of the budget will be even larger.

The government is projected to spend $7.8 trillion on the military over the next decade. If this area is largely protected, then most of the cuts would likely come from the $6.7 trillion of spending on the domestic discretionary portion of the budget. This is the portion that includes spending on infrastructure, education, research, and other areas that are considered investment.

Comments (10)Add Comment
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written by joe, August 01, 2011 6:09
So the spending cut is about 1% of GDP over ten years and the Bush tax cuts reduced revenue by 2% of GDP. Cutting infrastructure, education and research by 33% only pays for half of the Bush tax cuts.
Pols in Mortal Shock Over Debt Ceiling and Constitution, Low-rated comment [Show]
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written by skeptonomist, August 01, 2011 8:55
It is remarkable how the commentary on the "budget cutting" overlooks the obvious fact that what Congress can enact, Congress can circumvent. Most of the money that is spent is going to some Senator's state and some Congressman's district. I did not see anything in the agreement that would abolish logrolling, and those legislators want to get re-elected. A major key to this is bringing home the money - Tea Party voters may claim that they want cuts, but evidently they think they can come out of foreign aid. If real projects in real districts are cut that will be an opening for challengers. As in the past, sweeping cut legislation will be circumvented by special logrolling acts.
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written by Ellis, August 01, 2011 10:11
People keep on saying "Bush" tax cuts -- as if the Democrats opposed them. That's not true. Both times, just enough Democrats voted for them to make sure they were enacted. The reality is they are the "Bush-Obama" tax cuts.
The GOP is worthless
written by Chris, August 01, 2011 11:10
A corporate military fascist state is their wet dream, even though they cloak it in some Calvinist guise. They never tire of the Horatio Alger mythology, the macho posturing, the sports analogies, and the public displays of "prayer." But then, I guess that's what most voters want, right? Otherwise, the Bush tax cuts would be overturned, our endless wars overseas would be ended, and domestic issues would be of concern to the federal government.
Public Benefit vs. private profit
written by Scott ffolliott, August 01, 2011 11:51
"By underestimating inflation, the government can overestimate real GDP growth, thus creating a fictional rosy outlook. Similarly, by using the employment measure known as U.3, the government underestimates unemployment. " Paul Craig Roberts
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written by Richard Baldwin, M.D., August 01, 2011 7:40
I fail to see what benefit funding the Military is to the USA; who is insane enough to provoke the hair trigger cowboys all too ready to unleash the abundant War Horrors we can only imagine in our nightmares?
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written by Galen, August 02, 2011 2:57
"The impact of war is self-evident, since economically it is exactly the same as if the nation were to drop a part of its capital into the ocean."

--Karl Marx, Grundrisse, 1857-58.
..., Low-rated comment [Show]
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written by liberal, August 02, 2011 11:52
Bruce Krasting blithered idiotically,

If the US wants to do anything with its long term financial problems it must tackle Social Security.


LOL. Dean said SS plus Medicare plus Medicaid plus interest on the debt. Are you a clown, or you do have problems reading?

Also, Dean was quoting a timeline over the next decade. In that time, SS will contribute not a penny to the deficit, unless you're a hack who thinks the Trust Fund is imaginary.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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