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Budget Cutting Goal Should be $1 Trillion or More

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Watching Meet the Press this morning I felt vaguely ill as the mendacious Dick Durbin (D-IL) and the reprehensible Lindsay Graham (R-SC) discussed the budget. Durbin was in the ridiculous position of arguing that the Democrat effort to cut the President’s budget proposal by $41 billion was a meaningful cut and Graham was in the equally ridiculous position of arguing that the $100 billion cut proposed by Republicans was more than vaguely meaningful.

In reality, the president’s proposed budget is $638 billion higher than the 2008 budget and has a deficit of over $1.1 trillion. It only looks smaller in comparison to his last budget which spent an unbelievable $3.3 trillion in a single year. The truth is that neither the Democrat cuts defended by Durbin nor the Republican cuts defended by Graham are a fraction of the amount needed to produce a responsible budget. $100 billion is less than a 3% cut in the proposed budget and $41 billion is less than a 1.5% cut. Republicans promised to cut to 2008 spending levels, yet their proposal is less than 1/6 of that amount.

The hard truth is that we are not going to make real progress on having a responsible budget unless we look at some of the sacred cows which legislators have so far refused to touch. Senator Rand Paul (R-KY) has a promising bill which would cut $500 billion, but even that is still inadequate. It suggests excellent cuts and the elimination of some departments, but doesn’t go far enough.

For example, one of the sacred cows we need to go after is military spending. Paul suggests $84 billion in cuts. That’s based on continuing the current wars and deployments at close to the same level. I’d suggest going much farther. Get the troops our of Afghanistan and Iraq. These are wars which no longer have a purpose and cannot possibly pay off in proportion to the cost. There’s nothing to be gained there. Cut the military budget back to year 2000 levels, adjusted for inflation. That would be a cut of about $330 billion. It would allow the military to continue to operate and maintain all of its existing obligations but it would cut out the specific costs associated with current deployments and some new projects.

Next cut. Federal spending on unemployment has almost tripled in the last decade. It is utterly unjustifiable. Extending benefits to 2 years or more cannot be supported in the long term. Cutting it back to year 2000 levels adjusted for inflation would cut another $400 billion from the budget. It’s an entitlement which we can afford to go after and absolutely must. The extension of unemployment is irrational and undermines the business employment environment. People need to be pressured to go back to work at lower salaries if necessary and do their part in bringing wages down to strengthen the economy.

Another obvious cut is Social Security. We have to push back the retirement age. It should be immediately pushed back to 70 from the current level of 67 and pushed back 1 year every 3 years until it reaches 75. The system was originally designed for a population which had an average life expectancy of around 62. People weren’t expected to live to collect Social Security for more than a couple of years. They are living more than 20 years longer today and the retirement age must be adjusted to address that. The immediate yearly savings would be only about $150 billion, but the long term effect would be much more substantial.

So there, starting with Rand Paul’s modest $500 billion in cuts and adding just three more cuts, two in areas which he doesn’t even touch, we could cut the budget by a total of $1.3 Trillion, and we haven’t even gone after Medicaid yet. That would eliminate the deficit and potentially leave us with a small surplus to apply to the debt. It would only take us back to a year 2005 level of spending overall, but that leaves us with a target for 2013 of cutting $600 billion to get us back to a year 2000 level adjusted for inflation.

The independent Debt Commission has declared both the House Republican plan and the President’s budget contain far too few cuts, saying that “neither plan goes at all far enough to deal with our medium- or long-term fiscal challenges.” You have to wonder why we have this commission of experienced elder statesman if neither party is going to listen to them.

As Rand Paul has demonstrated this is not rocket science. It just requires the guts and perhaps the ruthlessness to do what needs to be done. He’s given us a starting point. Let’s take out the red pen and start cutting in a serious way.

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About Dave Nalle

  • http://ruvysroost.blogspot.com Ruvy

    Mind you, Dave, I think a government should spend within its means. I don’t have to be sold on a balanced budget. It would be great for the world economy – BUT the only thing that has stopped a violent revolution in your country so far has been the continuation of unemployment bennies. There are a lot of folks out there with no work, and these continuations are welfare with another name. It lets folks eat, get around and watch American Idol. The alternative is millions of Americans demanding Justice because they are broke. You could discover that in a demand for Justice, your head gets lopped off.

    Not a pleasant thought, but visions of France in 1789 do come to mind when folks do not have what to eat.

  • http://ruvysroost.blogspot.com Ruvy

    Can you spell C-A-I-R-O?

  • troll

    …shut it down (permanently) – that’s a 100% cut

    hell of a savings

  • http://www.RoseDigitalMarketing.com Christopher Rose

    Agreed that slashing the military budget would be a good move, but the drug wars and the security agency excesses of organisations and budgets ought to get tossed too. Taxing churches would be a nice bonus too.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    Nice to see that you don’t want to go after social programs, Dave, unlike a lot of your fellow Republicans. Put in perspective, they’re peanuts compared to some other government outlays, yet a lot of conservatives talk as if axeing them is some kind of panacea.

    We’re bracing for a trainwreck in the low-income housing business as it is. But petty cuts like that serve only to make politicians feel like they’ve accomplished something while in reality just pushing the problem onto another sector. Loss of housing benefits just means more pressure on the welfare system, more homelessness, more crime, more kids out of school and all the attendant expenditures those things cause.

    What’s needed is a fresh look at how the entirety of public spending is structured.

  • John Lake

    Not everyone will be able to work until the age of seventy. Hell, in downtown Chicago, it is unusual to see anyone much over 55.
    There are some obvious gorillas in the room. Defense spending is the cause of our problems. I have mentioned repeatedly that when Libya became a threat, we sent a rattlesnake missile through a bedroom window and that was that. We took another course in Irag, killed hundreds of thousands, and when we pull back, they still favor the old ways.
    The remainder of the “gorilla” is in National Science Foundation and National Aeronautics and Space Administration spending. This spending for the most part is pointless.

  • http://blogcritics.org/writers/joseph-cotto/ Joseph Cotto

    Dave,

    As I am sure that you very well know, politics is the art of compromise. America is not going to make any progress on her financial crisis with partisan zealots screaming for radical spending cuts, all the while ignoring ideas put forth from their fellow statesmen. Perhaps it would be best if the finer points of Durbin’s, Graham’s, and Paul’s proposals could each be incorporated into a piece of legislation which might have a realistic shot of attaining widespread support in the Senate.

    When a politician, or a group of politicians, attempts to ram their bills of choice through the halls of Congress with reckless abandon, the entire country loses. It would be most unfortunate to see a matter as volatile as our national budget deficit handled in such an appalling manner.

  • Glenn Contrarian

    Dave –

    This may come as a bit of a surprise, but I don’t really have much of a beef with the proposals other than (IIRC) Social Security is NOT part of the federal budget and any ‘adjustment’ thereof would NOT be reflected in our budget deficit.

    That, and when someone can’t get a job, and there’s no unemployment assistance, how would he feed his family? If you were faced with that situation – little education, no money, no hope of a job, and no help to be had from the government – what would you do? Maybe you’d be able to make something happen, but many, many people cannot. This results in higher crime in every state, in every county. So…in the long run, which costs less, not only in terms of taxpayer dollars, but also in terms of our social fabric?

    But you and I both know that no matter how well-intentioned Paul’s proposals were, they stand zero chance of coming to fruition. That, and he made the all-too-common error of making sweeping budget-cutting proposals but did not propose anything to help the problems that always accompany a sudden slashing of funds.

  • http://www.republicofdave.com Dave Nalle

    Glenn, if you follow the link to the White House Budget Office you will find that SS is currently included in the budget (some on budget, some off) and in the total for the deficit. I applaud the honesty that represents, because it was never really off the budget anyway.

    As for the unemployment issue, the truth is that at the same time we have many unemployed there are jobs which cannot get filled at somewhat lower wages. Extended unemployment gives people an excuse to not prioritize getting employed highly enough to make some sacrifices, like moving or taking a lower salary.

    Hell, if your job gets outsourced, move to India to keep it. The cost of living is nice and low.

    As for Paul’s proposed budget, the point of mine is to show that his $500 billion is actually a pretty reasonable compromise level for cuts. Republicans ought to be pushing for a number like mine and then compromise somewhere around what he proposed.

    Dave

  • troll

    SS?

    why not simply eliminate the program for private sector workers and allow employers who generate profit to take care of their own workforces without gov’t meddling?

    hell of a savings

  • troll

    eliminate all benefits for being unemployed…they are malinvestments that mess up our economy

    hell of a savings

  • troll

    fully privatize the military (no more of these haliburton half-measures)

    hell of a savings

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    eliminate the government; have the country run instead by the board of directors of Goldman Sachs

    hell of a profit

  • troll

    …and that’s only a few programs that would bring us back into the black

  • http://www.republicofdave.com Dave Nalle

    Roger, we already tried that one.

    Dave

  • Glenn Contrarian

    Dave –

    Tell you what – count the help-wanted ads in a city newspaper of your choice. Start with DFW if you want. Then compare the number of vacancies advertised to the number of unemployed in that same city…

    …and you will find the number of unemployed is much, much higher. Dallas County has something like 2.4 million people, with a 7.9% unemployment rate. That, sir, is tens of thousands of unemployed people, and if you take all the help-wanted ads from all the newspapers, and if you drive around the city and count all the help-wanted signs, you will NOT even approach the total of unemployed people…

    …especially since the 7.9% probably (like the federal government) reflects only those who have been unemployed for less than two years.

    The implication that “They just need to get off their butts and go get a job” is a simplistic and frankly naive answer…

    …and your suggestion that they could ‘go to India’ is a crock! I strongly doubt you know what it takes to uproot an American family and move to a foreign country, particularly if one or more of the family is of a different race and cannot speak the local language. It’s not so bad for a single man, but for a whole family…that’s not easy. And I can honestly say I know whereof I speak on this particular issue!

  • troll

    …given wiki and google school is no longer needed – eliminate the DoE

    hell of a savings

  • Doug Hunter

    #17

    It maybe in jest, but I like you’re thinking. Anyone interested in learning can hear lectures from Harvard, etc. online the best of the best teachers have put together online programs absolutely free that anyone can work with you just have to seek them out. Learning and education IS becoming free to anyone who wants it and that will only accelerate.

    The education system serves many needs beyond access to education and learning that can’t be replicated by the internet, but major change is coming…

  • troll

    …jest?

    moi?

  • Clavos

    Jes, jest you…

  • Boeke

    Arguing that there are some jobs in the want-ads and people should seek those commits two errors: first is inappropriate generalisation, arguing from the particular to the general.

    Second, large companies ALWAYS advertise for the jobs they are currently laying off! Why? They know they’ll have to fill those jobs again eventually, and they figure to do it at lower wages, too!

    Pointing at want-ads is a stupid argument. Stop using it, lest you make yourself look even more naive.

  • Clavos

    Stop using it, lest you make yourself look even more naive.

    I was wondering who today’s hall monitor is…

  • http://handyfilm.blogspot.com handyguy

    There are still 4 or 5 unemployed Americans for every job opening. Dave’s blithe suggestion that there are plenty of jobs is, well, bull puckey.

    And unemployment checks are almost always spent, and quickly — not saved — immediately stimulating the economy.

    The extended benefits of the last two years are intended as emergency measures, not permanent increases in spending.

    And if you’re going to suggest that people can’t retire until 75, can you please suggest how they can remain employed? There are plenty of laid-off folks over 50 who simply cannot get hired in the current market. Some of them may never work at a full-time job again — and not because they don’t want to.

    Unbelievably heartless and ignorant article.

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    Good post. You’re starting to realize that the job recovery is nowhere near what has been projected or expected.

  • http://handyfilm.blogspot.com handyguy

    We were in a very very deep hole, and the recovery was never going to be swift. But Dave’s article basically claims that the desperately needed [and always intended to be temporary] emergency lifelines for unemployed people are just money flushed down the toilet. This is counterfactual as well as morally repugnant.

    The radical budget-slashing endorsed by extremists is not supported by a very large part of the public. It may well lead to electoral disaster for the GOP next year.

    And this article is several steps beyond what even most conservative GOP House members will support. It’s primarily intended to be provocative, though Dave pretends his numbers are real and his proposals are logical and necessary. He writes this nonsense even as his home state of Texas is going broke, its social structures falling to pieces, not due to over-spending, but because the disgusting ideologue of a governor would rather lay off teachers than raise taxes.

  • Clavos

    would rather lay off teachers than raise taxes.

    Well, since their unions protect them from being fired…

  • http://handyfilm.blogspot.com handyguy

    Perhaps you genuinely believe that was a clever riposte [if so, my sympathies]. But no one has suggested that Texas teachers should be fired if they could be.

    It’s just that Texas had used Obama’s stimulus funds to fill their budget holes until now. And they’d rather do anything else — even make the schools and other government services more disastrous and threadbare than they already are — than raise taxes now that there is no money left.

    This pseudo-religious belief about tax revenues always being a bad idea is ridiculous and will be the end of the GOP eventually. They think the public is with them on it, and they are dead wrong.

  • Arch Conservative

    The world is getting uglier every day.

    Maybe all we have left to look forward to is Charlton Heston on a beach screaming god damn you all to hell.

    Seriously though…Nova was just begging for a good rogering, what the hell was he doing riding around on a horse with her?

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    a good rogering, you say? Well, here’s Roger to the rescue.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    Roger, it sounds like you need a crash course in classic British comedydoubles entendres elevated to a pitch of perfection.

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    Well, you guys invented music hall.

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    Since we’re on the subject, sort of, you might want to take a look at Peter Ackroyd’s English Music, an excellent account of English culture from the ridiculous to the sublime.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    Thanks, Roger. I may have to check that one out, although I prefer Ackroyd’s non-fiction.

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    You won’t be disappointed in spite of its occasional melancholy, almost fatalistic tone. I suspect is partly autobiographical.

  • http://www.republicofdave.com Dave Nalle

    Texas is hardly going broke. You’ve been listening to propaganda from the public employee and teachers unions. We have a reasonable budget imbalance which will be addressed by sensible means and we’ll move on.

    Dave

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    Why should the teachers and public employees spread such rumors even if they were true? It’d be against their interests, it seems.

  • Clavos

    Because they are public employees, Roger…

  • Clavos

    Perhaps you genuinely believe that was a clever riposte…

    Not at all. Just what I perceive…

  • Clavos

    no one has suggested that Texas teachers should be fired if they could be.

    Betcha there are a bunch of ‘em the school boards would fire in a heartbeat if they could.

    Just sayin’

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    @37

    Doesn’t compute.

  • Boeke

    Maybe the best thing to do is just back out all the Bush extravagances: Iraq, Afghanistan, generous tax gifts to the rich, generous gift plan to Pharmas, etc. Restore the 2000 budget.

  • http://handyfilm.blogspot.com handyguy

    Texas’s two year budget deficit is projected at $27 billion, or 13.5 billion per year — more than 30% of the size of the budget.

    Texas has had conservative GOP government for years and the budget is already austere. Since Gov. Perry refuses to even consider raising taxes, the cuts will be extremely unpleasant.

    The federal budget deficit is about 1.6 trillion out of 3.5 trillion total spending in the current fiscal year, 1.1 in FY12, below 800 million in FY13 and below 700 million in FY14. [If the stupid Bush tax cuts for the wealthy are allowed to lapse as they should.] Still big but steadily smaller.

  • http://www.republicofdave.com Dave Nalle

    no one has suggested that Texas teachers should be fired if they could be.

    Actually, as soon as cuts to state budget funds for edcuation were suggested the teachers unions began screaming that this would lead to tens of thousands of teachers being fired and basically the end of the universe.

    Handy raises an interesting point. Look how lean the Texas budget is compared to the federal budget. IMO the conclusion we should draw from this is that the federal budget is hugely bloated compared to the more fiscally responsible budgets produced by successive Republican administrations in Texas.

    Dave

  • Boeke

    Only one trillion dollars Dave? That’s easy:

    -revoke the Rich Peoples Tax Break for $500 billion

    -revoke the Medicare Plan D drug benefit which was designed to deliver $500billion into the pockets of the Pharmaceuticals. It can be replaced by a cheaper simpler system that is designed to benefit Medicare beneficiaries (Lordy Lordy!) instead of Pharmas.