President Obama says that he supports a “balanced” plan of tax increases and spending cuts to tackle the government’s huge debt. The problem is that the fiscal mess in Washington is far from balanced.
Republican and Democratic leaders have agreed to cut federal funding by $38 billion this year (versus fiscal 2010). What does that mean for the overall spending picture?
It’s shaping up to being another good year for farm incomes. As a result, policymakers looking for spending cuts are finally turning an eye toward farm subsidies. An emerging target is the $5 billion in annual payments made to farmers…for basically just being farmers.
Pundits and politicians are all in agreement: Those were some big budget cuts in Friday night’s deal. “The largest annual spending cut in our history,” President Obama said. Speaker of the House John Boehner called it the “largest real dollar spending cut in American history.” Saturday’s front-page, upper-right headline in the Washington Post proclaimed:
Republicans and Democrats are currently battling over $61 billion, or less, in federal spending cuts for the remainder of the current fiscal year. The chart below puts that figure in perspective. It shows the annual increases in total federal outlays each year over the last decade.
For all the boldness of Rep. Paul Ryan’s proposal to reduce projected federal expenditures by $6 trillion, an initiative that I support, the Pentagon’s budget emerges essentially unscathed in Ryan’s plan. This is a mistake on both fiscal and strategic grounds. Significant cuts in military spending must be on the table as the nation struggles to close its fiscal gap without saddling individuals and businesses with burdensome taxes and future generations with debt. Such cuts will also force a reappraisal of our military’s roles and missions that is long overdue.
House Budget Committee Chairman, Paul Ryan, introduced his budget resolution for fiscal 2012 and beyond today entitled “The Path to Prosperity.” The plan would cut some spending programs, reduce top income tax rates, and reform Medicare and Medicaid. The following two charts compare spending levels under Chairman Ryan’s plan and President Obama’s recent budget (as scored by the Congressional Budget Office).
House Budget Committee chairman Paul Ryan (R-WI) is proposing reforms to Medicare and Medicaid as part of his budget proposal for fiscal 2012. Readers who are interested in getting a better understanding of these pillars of the federal welfare state should check out two Cato essays on our Downsizing Government website.
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.”