The Washington Post said today that a plan to "cut $33 billion from the federal budget" would be "the largest one-time reduction in U.S. history."
The federal government is approaching its legal borrowing limit, and fiscal conservatives in Congress are wondering what spending reforms they can extract in return for supporting a debt-limit increase. Various sorts of balanced budget amendments and debt limits relative to GDP are being kicked around. I support those ideas, but I fear that they may be too complicated to gain traction right now.
I testified this week to a a subcommittee of the House Oversight and Government Reform Committee looking at the effects of the 2009 stimulus bill (the "American Recovery and Reinvestment Act").
A lot has happened since President Obama introduced his last budget in February 2010. His party took an historic "shellacking" at the polls for its big government policies, his Fiscal Commission recommended serious spending cuts, and European governments have illustrated the severe problems of deficit spending.
Despite the record $1.6 trillion deficit this year, and the consensus that exploding spending and debt is pushing the nation toward catastrophe, the Obama administration has completely chickened out on spending reforms in its new budget.
House Republicans proposed some (tiny) spending cuts this week and the Obama administration will likely propose some (tiny) cuts next week in the federal budget.
The Washington Post reports: “Obama has decided not to endorse his deficit commission’s recommendation to raise the retirement age, and otherwise reduce Social Security benefits, in Tuesday’s State of the Union address.”