Saturday, May 15, 2010

Rounding errors

Eric Cantor (R-Va) who is the minority whip in the House of Representatives has announced a new budget cutting discussion (YouCut) being sponsored by the House Republicans. You can vote on one of the 5 programs to cut as offered by the House GOP; the winning cut will be introduced for an up or down floor vote in the House of Representatives if they take over the House (actually the web site seems to say they will introduce it now, but I am not sure about that). The budget deficit and the general unsustainability of our current fiscal state as a nation is the top priority as i see it. In one sense, you could say any discussion of priorities and what could be cut is good. However, the programs identified as the 5 choices are laughably small. They are:

*End Presidential Election fund, cut $260 Million
*tax preferences for Unions, cut $600 Million
*end HUD doctoral dissertation fellowships, cut $1 Million
*change TANF reforms, cut $2.5 Billion
*limit community block grants to high income areas, cut $2.6 Billion

The fiscal year 2009 federal budget was around $3 Trillion dollars. That is 3,000 Billion. In one year. The budget categories go like this:

*Social Security 22%
*Defense discretionary 20%
*Medicare and Medicaid 21% (14% medicare)
*Net interest on Debt 8%
*Non defense discretionary 16%
*Other 12%

They have proposed miniscule cuts to the non defense discretionary portion of the federal budget. Now, maybe they are just pacing themselves.....but these proposed cuts are laughable unless you get to the big boys: Social Security, Defense, Medicare and Medicaid.

Anyone telling you they have a plan to reduce the budget deficit but who does not mention reductions in at least one of: Defense, Social Security, Medicare/Medicaid and/or some increase in taxes either does not understand the situation or is dishonest. The long term structural budget deficit is almost completely driven by Social Security and Medicare and Medicaid.

You can also submit your own idea to the website: I submitted the following. Raise the eligibility of Medicare by 1 month per year starting in 2025 the Medicare eligibility age would then be 67, saving between $50-$60 billion over 10 years. The Medicare age would then be unified with the planned increases to the Social Security retirement age. The out year savings (years 11 to 50) would be in the Trillions.

Now if they want to really get the discussion about potential budget cuts started, lets have an up or down vote on that.

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