No Runny Eggs

Way back in August, Jim Geraghty predicted that the day total public debt added by President Barack Obama would equal the total public debt added by President George W. Bush would be the Ides of March 2012:

When the debt increases another $877,587,378,565.23 ($877.58 billion), the debt accumulated under Obama’s presidency will equal the debt accumulated under Bush’s two terms.

Obviously, this can change, but barring some sudden shift in the federal government’s borrowing and spending habits, this milestone will be reached in 206 days from August 23, 2011. That would be March 15, 2012.

Beware the Ides of March.

Guess what? He nailed it. The Treasury Department’s Debt to the Penny web app lists the debt as of the Ides of March as:

• Debt Held by the Public: $10,114,556,380.32
• Intragovernmental Holdings: $4,744,695,335,387.67
• Total Public Debt Outstanding: $15,564,809,891,767.99

The $4,937,931,842,854.91 in new total debt added under Obama’s watch, in a mere 1,150 days, is more than the $4,899,100,310,608.44 in new total debt added under Bush’s watch in 2,922 days.

If you prefer to just look at publicly-held debt, Obama broke the Bush record of $2.889 trillion in new publicly-held debt…back on the Ides of November 2010, and barely slowed down since. That total is now $4.512 trillion.

So, how did Obama celebrate? It probably would have been better had he gone to Disney World, but instead, he set another personal record of six fundraisers in a day, ignoring a whole host of indicators of hard times to gather cash for himself.

Revisions/extensions (10:15 pm 3/16/2012) – Doug Powers caught a gem from Vice President Joe Biden.

(H/T – Tina Korbe)

I had resisted the conservative push to mark the 1,000+ days since the Senate last passed a budget, mostly because the budget they passed on April 29, 2009 was for FY2010, which ended on September 30, 2010, and they weren’t legally required to pass any succeeding budget until April 15, 2010. However, The Only Member of Congress That Matters, Sen. Dingy Harry Reid (Dingy-Nevada), just uttered that the Senate will not take up a FY2013 budget either. From The Hill:

Senate Democratic leaders said they don’t expect a fiscal 2013 budget to reach the floor this year because spending levels were set last summer under the debt-ceiling agreement.

“We do not need to bring a budget to the floor this year — it’s done, we don’t need to do it,” Senate Majority Leader Harry Reid (D-Nev.) told reporters on Friday, echoing previous statements from his office.

I could have swore I predicted when the debt deal was passed last year, this would happen. Thanks to The Dingy One and his sidekick Charles “Don’t call me Chuck” Schumer (Dunce-New York), that prediction came true:

Reid and Sen. Charles Schumer (D-N.Y.) argued that the debt-limit agreement in August directs spending for the next year and that Senate Appropriations Chairman Daniel Inouye (D-Hawaii) has already asked the heads of the subcommittees to write their appropriations bills for fiscal 2013.

Let’s do some math:

• The next Congress will be seated on (or about) January 3, 2013. Even if the Senate passes a budget that day, it will be 1,345 days after they passed the prior budget, and 994 days after they were required to pass the FY2011 budget on April 15, 2010.
• Unless said budget covers the remainder of FY2013, the Senate will have gone 1,096 days between the expiration of the last passed budget (for FY2010) and the start of the next adopted budget (for FY2014).

By the way, the Congressional Budget Office estimates that the federal debt will have increased by $3,252,000,000,000 in the three full fiscal years Congress has operated without a budget. It took over 200 years to reach the first $3,252,000,000,000.

Yesterday (yes, yesterday, even though the announcement was today), the gross public debt outstanding crossed the $15 trillion mark. Congressman Paul Ryan (R-WI, and my Congresscritter), marked the occassion with a video…

[youtube]http://www.youtube.com/watch?v=X-yVjQzq7W0[/youtube]

From the ABC News story on this (H/T – Allahpundit):

The debt has expanded at an alarming pace, from $7.5 trillion in 2004 and $5.6 trillion in 2000. At the current rate, Debtclock.org reckons that the debt will top $23 trillion in 2015, though the nonpartisan Congressional Budget Office puts the estimate at $17.6 trillion.

Back in August after a protracted fight, Congress voted to raised the national-debt ceiling by $2.7 trillion to $17 trillion, while requiring $2.7 trillion in deficit reduction by 2021.

It also represents an increase from $10.7 trillion at the end of 2008 and $10.9 trillion from the point Obama signed the FY2009 appropriations back in March 2009.

Point of order; there never was $2.7 trillion in deficit reduction demanded by, or even suggested by, Congress’ passing of the Budget “Control” Act. The Congressional Budget Office scored an initial $895 billion (or if you prefer, $0.895 trillion) of “deficit reduction” (versus a “modified” baseline that assumed a $1 trillion reduction in the spending on the Global War on Terror that everybody else assumed), with an additional $1.2 trillion of “guaranteed” “cuts”. Even if one includes the SuperDuperÜber Committee’s goal of $1.5 trillion of “deficit reduction”, that only brings the total to just under $2.4 trillion. I will note, however, that the CBO assumed a lower interest rate in their August review than they did in March, which combined with other “tecnhical” changes resulted in a $0.329 trillion chop in the projected 10-year deficit.

Speaking of the Budget “Control” Act, here’s the real reason why the “clean” (i.e. no spending limits/no supermajority to raise taxes) “Balanced” Budget Amendment is getting consideration – as long as the amendment is titled “Joint resolution proposing a balanced budget amendment to the Constitution of the United States”, the debt ceiling can go up by another $1.5 trillion regardless of what the SuperDuperÜber Committee does (or more-likely, doesn’t do).

There’s been a lot of numbers and rhetoric tossed about on what the debt deal (shortened to The Deal, not because I like it, but because it makes the phrase stand out) does and doesn’t do. However, I don’t believe anybody has done an exploration of the absolute effect is. It’s high time to do so.

Baselines matter

First, the base from which the reductions are to be needs to be established. While that base has been established to be a “modified” version of the March 2011 Congressional Budget Office extended-baseline scenario, a quick review of which is part of the CBO’s review of the President’s FY2012 budget proposal.

The extended-baseline scenario assumes the CBO’s estimates, based on current law and not necessarily current policy, of direct spending (which, among other things, ends the Medicare “doc fix”) and revenues (which, among other things, assumes that all of the Bush tax rates expire at the end of 2012 and the Alternate Minimum Tax is no longer “indexed” to keep middle- and lower-income Americans from being caught in that trap), and that every top-line category of discretionary spending that does not explicitly end in FY2010 is increased at the rate of inflation.

The bottom line on that is that, on $39.03 trillion in revenue and $45.77 trillion in outlays, there would be $6.74 trillion in deficit spending. However, there are a couple of “wrinkles” that were added to that in the baseline used.

Normally, that would include spending on what used to be known as (and is still called by the Republicans on the House Budget Committee) the Global War on Terror. However, every entity, from the White House to the House of Representatives to the Senate Democrat leadership, agrees that, instead of spending $1,589 billion over the next 10 years as the extended-baseline scenario calls for, $545 billion will be spent. While the CBO excluded the entirety of that at the request of Congress as it is not part of this bill, I will add the $545 billion back in, using the House budget spending by year, as there is no difference year-to-year between the President’s and the House of Representatives’ budgets.

Also, the CBO, at the request of Congress, has figured in the effects of the final FY2011 continuing resolution. That is another $122 billion reduction in spending.

Taking the full effect of those modifications into consideration, the federal government would take in $39.03 trillion in revenue, spend $44.60 trillion, and run a 10-year deficit of $5.57 trillion.

There are a couple of other “baselines” that one could choose. The President’s budget, according to the CBO, would take in $36.70 trillion in revenue, spend $46.17 trillion, and run a 10-year deficit of $9.47 trillion. That budget already includes all of the modifications above.

An “Alternate Fiscal Scenario” from the CBO, which assumes various spending and revenue options, including those outlined above, are affirmatively extended rather than allowed to expire or otherwise not happen and last outlined in percentage-of-GDP form in June, would also need to be adjusted by the above adjustments. Once that is done, it would presume $35.05 trillion in revenues, $46.81 trillion in spending, and $11.76 trillion in deficits.

Meanwhile, the House budget, which keeps all of the Bush tax rates, indexes the AMT, and does some further tax cuts, envisions $34.87 trillion of revenues, $39.96 trilion of spending, and $5.09 trillion of deficit spending. Like the President’s budget, it already includes all the modifications above.

The first 2 years – $63 billion in scorable deficit reduction versus the “adjusted” CBO baseline

Like the CBO, I cannot and will not attempt to score the effects of a potential $1.2 trillion in “trigger” cuts, $1.5 trillion in “commission” cuts, or adoption of a Balanced Budget Amendment. However, I have actually read the bill, and the discretionary spending caps are, unlike the $1.2 trillion-$1.5 trillion in “additional cuts”, actual hard numbers, not nebulous percentages or “reduction” numbers”. Therefore, actual bottom-line spending comparisons can be made against any base. As the CBO used an adjusted version of their March 2011 baseline, I added the (all-but-)agreed-to spending levels on the GWOT to do so.

Using the adjusted CBO baseline, there would be, between FY2012 and FY2013, $5.65 trillion in revenue, $7.34 trillion in spending, and $1.69 trillion in deficit spending. Adopting The Deal l would knock the spending down to $7.28 trillion and deficits down to $1.63 trillion.

By way of comparison, the President’s budget would have $5.44 trillion in revenue, $7.51 trillion in spending, and $2.07 trillion in deficits. That’s an additional $233 billion in spending and $438 billion in deficits versus The Deal.

The House budget would have $5.39 trillion in revenue, $7.09 trillion in spending, and $1.69 trilllion in deficits. While spending in the House budget would be $190 billion less than The Deal and $253 billion less than the adjusted CBO baseline, the deficit would be slightly higher than The Deal and insignifiantly less than the adjusted baseline as, instead of the Bush tax rates expiring at the end of 2012 (1/4th the way through 2013) and the AMT “indexing” not happening, both would continue as they have the past 8 years.

The “out” years – $855 billion in “scorable” deficit reduction – if The Deal holds

I will preface this that there is a significant amount of debt service savings from the reductions in spending on the GWOT that were scored in the two budgets that were not scored separately in even the CBO analysis of the Senate proposals. Judging by the CBO scoring of the Senate proposal versus the House proposals and The Deal, that is roughly $220 billion in reduced spending over the 10 years not reflected in either the adjusted CBO baseline or The Deal.

Also, the bulk of the $1.2 trillion-$1.5 trillion in additional deficit reduction, or any adoption of a Balanced Budget Amendment, will happen in this time frame. As noted above, that cannot be properly scored as yet.

With that said, the adjusted CBO baseline anticipates $33.39 trillion in revenues, $37.26 trillion in spending, and $3.87 trillion in deficits between FY2014 and FY2021. The Deal changes the spending to $36.41 trillion and the 8-year deficit to $3.02 trillion.

The President’s budget is a veritable blowout of spending, especially deficit spending. On $31.26 trillion of revenue, there would be $38.67 trillion of spending and $7.40 trillion of deficits.

While the House budget would continue to spend less at $29.48 trillion, its reduced expectation of revenue of $32.87 trillion would result in $3.39 trillion in deficits.

What about tax hikes?

While The Deal does not explicitly address taxes, I’ve got bad news for everybody (or at least everybody who thinks a non-WWII record level of revenues as a percentage of GDP in 2021 is a bad idea) on that front. Any attempt to either extend any part of the Bush tax rates beyond 2012 or keep “indexing” the AMT will be scored as a deficit increase. The back-of-the-envelope numbers on the various proposals are that the “scored” increase would be about $2.5 trillion for the Obama “hold those under $200K/$250K harmless” plan, $3.5 trillion for full extension of the Bush tax rates, and $4.2 trillion to continue the entirety of the current tax structure.

What about S&P and Moody’s?

Again, baselines matter. Unfortunately, neither S&P nor Moody’s appear to have mentioned from which baseline they wanted the “$4 trillion in deficit reduction”. It has been said that Cut, Cap and Balance, even before adoption of the Balanced Budget Amendment, would have met that. However, I have not seen any CBO score on that.

Moreover, up until the Congressional leadership decided to start talking to each other instead of with President Obama, it was widely assumed the $4 trillion that was being talked about was against the President’s budget and its $9.47 trillion 10-year deficit spending. The House budget, and the Cut, Cap and Balance bill that, after higher spending in FY2012 compared to that, used percentage-of-GDP spending levels based on that budget, would easily have cleared that hurdle.

Going against the President’s budget, The Deal, with $4.65 trillion in 10-year deficit spending, also would very easily clear that hurdle, even before the “trigger”/commission/BBA. Moody’s has already said they would maintain a negative outlook on the US soverign debt, while S&P is making noises that they will downgrade the debt. I have to wonder what more those credit rating agencies want.

Revisions/extensions (4:27 pm 8/1/2011) – I really need to proofread these opii. I corrected a typo.

I decided to revisit my conceptions on the inevitable DOOM! scheduled to arrive next Wednesday, and I’ve got bones to pick with, and promptly bat about the heads of, everybody. This is a bit longer than a typical Captain Tenneal monologue at the start of “MXC”, so if your ox hasn’t been gored, keep reading and it will be.

First things first, I’m still of the opinion that House Speaker John Boehner royally misplayed things. He really should have walked away once “Cut”, Cap and Balance (there’s a reason why one of those words is in scare quotes; more in a bit) got tabled in the Senate. However, had he felt the need to put a Plan B out there before either Senate Democrat Leader Harry Reid or President Barack Obama put a Plan A up in legislative form, here’s what he should have said (in more-diplomatic terms, of course):

You don’t want a Balanced Budget Amendment? Fine; we plan on getting enough conservatives here and across the Routunda to send it out to the states in 2013. You don’t want to deal with this again until 2013? Here’s how that’s going to happen. You pass our budget and the appropriations based on it, and we’ll pass a $2.0 trillion debt increase to get this into 2013. If you don’t like that, lots of luck, gentlemen. By the way, that means instead of spending $29 billion more than the CBO baseline adjusted for the effects of the current continuing resolution and beginning the wind-down of the Global War on Terror, we’ll be spending $98 billion less.

I suppose it’s time to do the lengthy side note on why HR 2560 is “Cut”, Cap and Balance, with “Cut” in scare quotes. Nobody actually asked the CBO to score CCB, so that devolves to me. We start with the $1,225 billion limit on outlays for discretionary spending other than that on the Global War on Terror. The outlays on the GWOT, based on the $127 billion in budget authority for the same in both the President’s budget and the House budget, would be $118 billion. The “uncapped” portion of direct spending (what is often misleadingly-labelled “mandatory spending”), which consist of the majority of Social Security, Medicare, veterans benefits, and net interest, would come to $1,632 billion. The “capped” portion of direct spending is $681 billion. Add all that up, and it comes to $3,656 billion in total spending. Unfortunately, once the effects of the final FY2011 continuing resolution and the agreed-to-by-everybody GWOT spending are put into the March 2011 CBO baseline (or a net -$12 billion), the CBO baseline comes to $3,627 billion. That’s neither exactly Hertz nor exactly a cut.

On the other hand, the Cap part adopts as the spending ceiling the percentage of GDP the House budget would spend that year beginning with FY2013, that would a significant and immediate reduction of debt compared to the adjusted CBO baseline. In fact, the “short-term” FY2012-FY2013 deficit reduction would be somewhere north of $125 billion versus Boehner 1.0.2’s $63 billion, and be almost indisguishable to the House budget total 10-year deficit of $5.1 trillion, or a solid $1.5 trillion less than the $6.6 trillion in deficit spending indicated by said adjusted CBO baseline.

You may have noticed that is nowhere near the “$4 trillion in deficit reduction” the credit rating agencies want from an unspecified baseline, or even $2.5 trillion-$2.8 trillion in deficit reduction that a 1-to-1 ratio of debt-ceiling hikes to spending cuts call for. If you think that it’s possible to get the 10-year deficit from $6.6 trillion to $2.6 trillion, I wish you the best of luck, and then point you over to Wisconsin, Greece, France, and Portugal, where a whole lot of the populace (and in the case of the foreign countries, a majority of said populace) has been in a non-stop temper tantrum over far less cutting measures of austerity. It is, however, well over $4 trillion less in deficit spending than Obama’s budget, which envisions $9.5 trillion in deficit spending.

Back to the here-and-now beatings. I will, for the point of this post, ignore the fact that Boehner and McConnell were all-too-willing to return to permanent minority status before Obama decided he wanted it all, and go to Boehner 1.0.x. The first version was an unqualified disaster; even Reid’s all-defense-cuts plan, which won’t even be voted on until Boehner 1.0.3 receives the same cement burial that the House budget and CCB received, managed to create more scoreable cuts, and the scored cuts were less than the first phase in debt-ceiling increase. The second version was a minimum effort to beat Reid on the spending score, and it barely did both that and hit the 1-to-1 hikes-to-cuts ratio (against the toughest scorecard the CBO has in its files, no less) at the cost of the caucus and any semblance of bipartisanship, which “C”CB had. Of course, since it doesn’t automatically absolve Obama and Reid of having to deal with the debt ceiling again next year, it’s been declared dead-on-arrival, with Reid promising a tabling in 30 minutes (or the next one’s free). It also represented, even though it wasn’t voted on, the “ceiling” the House Republicans can possibly get.

At that point, Boehner had a choice of either bringing back the “Cap” or bringing back the “Balance”. He chose poorly from the negotiating standpoint – the BBA is a singular take-it-or-leave-it item, while the additional $1.4 trillion in identifiable deficit reduction in “Cap” is far more negotiable. At least Boehner managed to raise the ceiling a little bit, and probably more important, get the caucus back together.

One more thing – if we had a rational actor in charge of deciding which bills get paid once 8/3 rolls around without additional borrowing authority, I would be marginally less worried about the expansion of the default situation. That’s right; once Treasury Secretary Timothy Geithner had to start juggling accounts around and stop fully-funding the federal employees retirement system, we were in a default situation. The saving grace is that since there is enough cash available to pay all the actual bills, there was no real pain felt.

That will change soon, and can change at the drop of the hat (or in this case, the utterance of an order). Once that shell game is insufficient to keep the cash flowing, there is going to no longer be enough money to pay all the actual bills. While technically Geithner could likely keep up the shell game for a week or so beyond August 2, for political reasons, that is the drop-dead date.

The bad news is this is not a lack-of-appropriation shutdown, so beyond the Constitutionally-mandated servicing of the public debt, the entirety of the payments on federal obligations is up to the sole discretion of the executive branch. Yes, this includes the servicing of intragovernmental debt, which, if not fully-serviced, would be a technical default.

The ugly news is that the decision of whether or not to escalate the default situation is no longer in the hands of anybody in Congress. Once the calendar flipped over to 7/22, Obama gained the ability to bury any bill sent to him by Congress until after the 8/2 DOOM! date. The fact that he walked away from a deal that he and all four leaders of Congress had that would have given him almost every economic, and every political, element he could possibly want on that date tells me just about everything I didn’t want to know about how next week will play out.

As Monty over at Ace of Spades HQ is fond of saying, we’re boned.

Warning; there will be f-bombs. I am that fucking pissed off.

If you missed The Morning Jolt from Jim Geraghty this morning, you missed your humbled correspondent being featured in the Addendum. I guess it’s time to expand on the tweet that put the closing charge in things:

(W)ait until 8/3 to introduce the Boehner plan – NOTHING will get signed by Obama before then. NOTHING!

It should have become crystal-clear when the White House-led debt ceiling talks broke off abruptly last Friday, after President Obama altered the terms of a deal that would have both cemented his re-election and permanently buried the GOP as the minority “half” of the bipartisan Party-In-Government, that he wants a default and what Monty over at Ace of Spades HQ succinctly calls DOOM!. It did become crystal-clear when Obama kept on blaming everybody but himself for the collapse while offering, to date, no plan. We could argue the “why”, but that would be a tinfoil-hat-swapping party (hint; the one-word explanation starts and ends with a “S”).

At that point, the Republicans had a rather strong opening position called Cut, Cap and Balance, one that already was voted out of the House. I’ll state right here and now that, even though I like it, it had no chance of actually becoming law. However, it, along with the equally-stalled House budget (which, while it did not address the debt ceiling and indeed would need about a $2.0 trillion increase in the debt ceiling to make it work through early 2013, addressed the larger issue of size and cost of government), stood as the only things that actually had any demonstrable support.

The first two fuck-ups actually predated the collapsed White House talks, one by a large margin. The continuing resolution to fund government through September 30 did absolutely, positively nothing to alter either the timing of the debt-ceiling crisis or the amount perceived to be necessary to get the next credit-card application date into early 2013. In fact, those of us who bitched about it not exactly cutting spending were told to shut up and wait for the debt ceiling battle. As I noted above, the House budget did change the latter slightly, but then again, that is as stalled and dead as Cut, Cap and Balance.

Senate Repulican “Leader” Mitch McConnell leaked the first Plan “B” (for Blame) – let Obama raise the debt ceiling on his own unless 2/3rds of Congress objects. It would have been, had it truly been a Plan “B” rather than Plan “Good, Solid B+”, an elegant trap for Obama. However, it was released weeks before the DOOM! date.

The third fuck-up was offering up $800 billion in tax hikes in those ultimately failed talks, presumably versus what the CBO calls the alternative fiscal scenario, which continues all current tax rates through 2021 rather than current tax law. News flash – by 2018, the taxes under that scenario already would be more than the 50-year (1951-2000) average of 18.06% of GDP, and then it would permanently be stuck at the even-higher 18.4% of GDP it reaches by 2021. That tax-pledge break would, had only Obama been savvy enough to accept it, have been strike three on fiscal matters for the GOP in the last 21 years, and functionally the same as the broken “No New Taxes” pledge from former President George H.W. Bush that was strike one.

The fourth fuck-up was McConnell and House Speaker John Boehner getting a “broad” agreement with Senate Democrat Leader Harry Reid that had only a nebulous $2.8 trillion “deficit reduction” number and no tax increases with with absolutely, positively no common baseline. Reid, who unlike either McConnell or Boehner, is at least someone who has a half-assed fucking clue on how to lead, played the Stupid Party “leaders” like a pair of bongo drums by claiming the $1 trillion in “savings” from reductions in expenditures in the Global War on Terror everybody else already agreed to as, ultimately, the major part of his “deficit reduction”.

The fifth fuck-up was Boehner going first on the basis of that agreement. Actually, I’ll call it two fuck-ups to make it an even half-dozen; going first, and going before Obama forces a default. Going first allowed Reid to put in just enough non-GWOT “deficit reduction” to beat Boehner in that category, at least with version 1.0.0. Boehner did put in a minimal amount of effort to beat Reid with version 1.0.1 (note to self; update the previous post with that minimal effort).

As I stated above, there is NOTHING, and I mean NOTHING, Obama will sign before he forces a default and DOOM!. It actually has been too late to avoid DOOM! since July 21st as Obama can sit on a bill for 10 days (plus Sundays) before he has to do something with it. Proof of that is that Reid, who has served his role as Obama’s roadblock well, declared Boehner’s version 1.0.0 plan dead-on-arrival.

All Boehner has done is make the “ceiling” the GOP can reach the Ohio Two-Step instead of Cut, Cap and Balance. By releasing it before anything the Democrats put forward either get to a vote or get to a head, he lost any chance of getting even that modest concession.

You’re going to see a whole lot of bloviation on how the Congressional Budget Office scored the Harry Reid plan as reducing the growth of the debt far more than the already-scrapped-for-retooling John Boehner plan. What you won’t see nearly as much of is how Reid and the LeftSteamMedia are able to get away with it.

Before I give you the tale of the tape in table form, I’ll explain that it has almost everything to do with the spending on the Global War on Terror (or whatever it’s being called nowadays at the White House). The CBO, in its baseline, assumes that spending on the GWOT will continue to increase at the rate of inflation through the end of FY2021, the end of its 10-year estimation period. That, between FY2012 and FY2021, would be (give or take rounding) $1,590 billion. Both the White House and the House of Representatives, in their budgets, reduced the amount of that spending to $547 billion over that same period, or a $1,043 billion reduction from the CBO baseline. Since the House already passed those cuts in budget form, Boehner told the CBO to not consider that spending in the baseline.

Meanwhile, the Senate has not passed a budget for either FY2011 or FY2012. Harry Reid is using this as the opportunity to effectively sign on to that GWOT spending plan, with a $1,044 billion reduction in GWOT spending relative to the CBO baseline (effectively a rounding error compared to the White House/House of Representatives plan). Because this is also not a true budget, Reid did not specify which year or years those cuts would need to be made, which is something both the White House and the House of Representatives did. Even though the CBO separated the raw effect of the cuts in spending on the GWOT from the “cuts” elsewhere in the discretionary budget, they did so in a clumsy way. Therefore, I decided to redo the first and third tables from each CBO summary to put the two plans back on the same playing field.

There is one more thing to keep in mind while looking at the charts – there is supposed to be another $1.8 trillion in “cuts” from a bipartisan commission in the Boehner plan that is, due to the lack of ANY detail, not scored by the CBO. Likewise, there’s a bipartisan commission in the Reid plan that is supposed to keep the deficit at or below 3% of GDP, which is, in the quick take, a bunch of Bravo Sierra. I’ll get back to that after the charts.

Note: There was a rather big error on the first chart I had up. As I did not save it in Excel, I decided to pull it entirely rather than spend time reworking something where a third of the data has been rendered moot.

Next, the net effect of the duelling pieces of legislation on the deficit (which includes Reid’s further cuts on farm subsidies and additional revenues from “re-auctioning” of various radio frequencies). I had to re-estimate the effect of the reduced debt service because that was not broken down by GWOT versus non-GWOT spending/revenue changes on the Reid proposal, and that re-estimation, bumped back up against the CBO’s estimate from House proposal, was low by $5 billion (again, click for the full-sized table):

Boehner managed to back-load things rather badly the first time around, and he got schooled by Reid even once the spending on the Global War On Terror gets discounted, at least when the “scored” items are counted. However, that does not quite tell the whole story.

Remember what I said about the Reid commission to bring deficits down to 3% of GDP? If the extended-baseline from the CBO can be believed, the only two years of the next 10 that the deficit would be above 3% of GDP are FY2012 and FY2013. Since Congress is dealing with, or at least is supposed to be dealing with, the FY2012 appropriations process right now, I’ll assume the commission won’t be able to affect that massive deficit. FY2013’s deficit under the Reid plan would be scored at $592 billion, or a mere $100 billion less than the $492 billion that is 3% of the estimated $16,400 billion GDP.

Meanwhile, Boehner’s commission would have a hard $1,800 billion in additional deficit reductions to come up with. Even if one applied the usual Boehner-to-reality conversion rate, that would result in a much larger reduction in deficit than the Reid plan, at least assuming that the adjusted CBO extended-baseline scenario of $5,807 billion in deficits or the House budget scenario of $5,088 billion in deficits is anything near reality.

Revisions/extensions (1:23 pm 7/27/2011) – There’s more from Ed Morrissey, who somehow forgot that one plan raises the debt ceiling by about $0.9 trillion to get us barely into 2012 while the other raises it the $2.5 trillion Obama needs to get past November 2012.

R&E part 2 (6:56 pm 7/27/2011) – After what can only be described as a “minimum effort” (namely, a revision of FY2012 and FY2013 caps), Boehner Verison 1.0.1 does barely beat Reid 1.0. I won’t redo the graphics, but the bottom line is:

• FY2012 discretionary spending change is -$25 billion from the adjusted baseline, $2 billion better than Reid’s plan
• FY2012 net deficit change from the adjusted baseline is -$21 billion, $4 billion better than Reid’s plan
• FY2013 discretionary spending change is -$47 billion, $1 billion better than Reid’s plan
• FY2013 net deficit change (excluding debt service, which is a somewhat-shaky estimation) from the adjusted baseline is -$41 billion, $3 billion better than Reid’s plan
• The subtotal net deficit change (again excluding debt service) is -$758 billion, $3 billion better than Reid’s plan

R&E part 3 – 8:46 am 7/29/2011) – I screwed up the math on the Memorandum portion of Table 1, affecting the CBO assumption for GWOT funding. I have pulled the chart.

I briefly touched on this as part of my third revision/extension to yesterday’s post that found that the federal government, under the “Grand Deal of 2011”, will be spending $18 billion more in discretionary funds in FY2011 than it did in FY2010 using the bottom-line outlays. I decided it needed its own post.

The CBO explained today that the reduction in non-emergency FY2011 budget authority will, assuming it gets adhered to in future budget years, eventually result in between $20 billion and $25 billion of reduced spending through FY2021 compared to leaving the budget authority at FY2010 levels. Of course, that assumes that Wimpy Congress actually remembers when it’s Tuesday that the budget authority was cut. It also is in current dollars, which means that once inflation is figured in, it’s likely that the $18 billion in new spending today won’t be fully-covered by the potential $25 billion in reduced spending over the succeeding 10 years.

It’s actually two situations. The future savings, that may or (more likely) may not come, is based on the Wimpy principle of saying, “I’ll gladly pay you Tuesday for a hamburger today.” The old “Popeye” cartoons never did resolve that, but you can bet your bottom grain of smokeless gunpowder that the Congressional equivalent, especially as long as either half of the bipartisan Party-In-Government has control of so much as one House of Congress, will simply declare Tuesday as not existing.

The present situation is sort of like the carpenter example that Jeff Dunetz outlined:

The difference in the numbers are the difference between outlay and spending authority. Look at it this way. Say you are a carpenter and have been given $100,000 to redo someones kitchen. After one week’s worth of work you have allocated $75,000 to specific items but you haven’t purchased anything as of yet. The home owner comes to you and says you can only spend $70,000. You have cut the budget (or spending authority) by $30,000 but cut outlays by only $5,000.

The problem is that the outlays are actually the cost overruns, which, because Congress is the opposite of progress, will be fully-funded. With that in mind, let’s restate the example:

Say you are a carpenter and have been given $100,000 to redo someone’s kitchen. You’ve been asked by the homeowner and his wife to keep the spending to a maximum of $75,000 (i.e. budget authority) because that’s what the two agreed it would cost, but he agreed to cover any and all cost overruns out of a “separate” account his wife knows nothing about (hence the $100,000 in outlays). After a week, you discover that it’s actually going to cost $105,000 and take an extra week. Because there’s a penalty in the contract negotiated by the wife, the requested maximum has been cut to $70,000, but because the the homeowner also signed a provision putting him on the hook for the entirety of the cost overruns, it’s still going to cost $105,000.

When running for the 2010 elections, Republicans attempting to harness the Tea Party enthusiasm promised that they would cut $100 B from the budget.  Barely had they gotten elected and the Republicans backed off their $100 B promise and said they could only get something in the $60 B range.  When it came to actually getting an agreement, they managed to hold on to a cut that was advertised as $38 B, but quickly identified as only $14 B.

Now that folks have had a chance to read the actual legislation, it turns out that none of the previously touted numbers are the real reduction that Boehner was able to negotiate.  According to numerous sources, the actual amount of deficit reductions that Speaker, “We are going to cut $100 billion in discretionary spending next week” Boehner managed to get was only $353 Million…MILLION!

When it became apparent last year that the Republicans would retake the house I had conversations with several people who are much more knowledgeable of Republican leadership than I.  I told them my reservations about Boehner becoming speaker and how everything I had seen from him lead me to believe that he was another Washington lifer who would say or do what he needed to to keep his position.  I was told by several of them that Boehner was the “real deal.”  While now living in Kentucky, I agreed to be from Missouri and be shown that Boehner was a conservative.

No more!

I am now on record as saying that Boehner is the embodiment of everything that is wrong with the Republican party.  Boehner is either a charlatan or ignorant.  Regardless of which, he is not worthy of leading a party’s effort that is overwhelmingly made up of a base that desires, no, DEMANDS reductions in government spending.

This continuing resolution needs to be voted down.  Boehner needs to be personally repudiated by any true House conservative for putting them in a position of having to support this sham of an agreement.

I hate Nancy Pelosi.  I despise everything about the woman.  Even with my level of disdain for her I give her props for one thing; she has a set of balls as big as two moons hung side by side.  Nancy has balls and Boehner is a eunuch!

(H/Ts – Allahpundit and Ace)

The Associated Press (as carried by the Washington Post) reported on a Congressional Budget Office report of the purported $38 billion cut deal reached by House Republicans, Senate Democrats and Barack Obama last weekend, and found that not only is the actual outlays authorized only a (wrongly-estimated) $15 billion cut, but that the impact to the deficit is…wait for it…

…Wait for it…

$352 million (this on a roughly-$1,600,000 million FY2011 deficit).

But wait, it gets worse. While I haven’t been able to find the CBO report referenced by the AP, I did find a 1-page estimate of the FY2011 discretionary spending amounts in the deal. Take a good look at the number at the lower-right corner – $1,364,714 million (or if you prefer, $1,365 billion after rounding to the nearest billion). That is the total amount of outlays that will take place in FY2011, including $76 billion for “emergencies”. In FY2010, the federal government had $1,347 billion in discretionary outlays.

Fucking brilliant, Boehner. I hope this deal fails and the government shuts down, then I hope somebody primaries Boehner right out of his district.

Revisions/extensions (6:34 pm 4/13/2011) – Somehow forgot the link to the article. Fixed.

R&E part 2 (9:25 pm 4/13/2011) – National Journal dug up (H/T – Dad29) a further document from the CBO comparing the total discretionary spending outlays in the “deal” to those called for in all the previous continuing resolutions for this year. Roll tape of the bottom-line projected full-year outlays of the continuing resolutions that had ending dates in 2011:

• The CR through 3/4/2011 – $1,361 billion
• The CR through 3/18/2011 – $1,360 billion
• The CR through 4/8/2011 – $1,359 billion
• The CR through 4/15/2011 – $1,368 billion (fucking brilliant – a $9 billion increase just to “save” the federal government for a week)

Oh, did I forget to mention that even HR1, the supposed $100 billion $61 billion non-security discretionary-spending cut, had a total projected discretionary outlay of $1,356 billion (once again, higher than FY2010’s $1,347 billion)?

R&E part 3 (3:30 pm 4/14/2011) – (H/T – Jeff Dunetz) The CBO explains how, assuming Congress doesn’t simply add all the spending back in, there MIGHT be a cumulative $20 billion-$25 billion in actual spending reduction over the next decade versus doing nothing. Of course, once one figures inflation into that, even the $25 billion in savings down the road won’t match the $18 billion in new spending today.

At the federal and state levels, from the east coast to the west coast, in traditionally conservative and even traditionally liberal jurisdictions, the 2010 elections had one message: fix the fiscal problems!  It seems that jurisdictions that saw the biggest shifts in political ideology have taken their mandate on acted on it. 

The State of Wisconsin which ousted long time liberal Senator Russ Feingold and equally liberal Governor Jim Doyle, wasted little time in responding to voter expectations.  Governor Scott Walker and the Republican led Assembly and Senate have delivered budget changes that will benefit taxpayers not only today but into the future.

Michigan, under the new leadership of Governor Rick Snyder, is also taking steps to restore fiscal sanity to a state long led by Democrats who thought that Washington would fund them in perpetuity regardless of the outcome.  If you thought the screaming and ballyhooing in Wisconsin was entertaining, Governor Snyder has a plan that allows the State to take over failing counties and municipalities under emergency decrees.

Yes, there are signs across the country that adults are finally in charge of the checkbook.  Across the country but not in Washington, D.C.

The same “fix the fiscal mess” message that changed leadership in Wisconsin, Michigan and other states elected 6 incremental Senate seats and 63 incremental House seats.  These increases came with an expectation that a host of fiscal issues including defunding Obamacare, reducing the deficit, reigning in government mandates, fixing entitlements etc., etc., etc., would be fixed.

To date, the newly elected Congress, especially the House, has been nothing but a disappointment.  They have provided a show legislation for reversing the Obamacare mandate.  However, they have tacitly or purposely avoided all opportunities to date of defunding the mandate.  This in spite of finding a surprise $105 B implementation mandate in the Obamacare legislation!  With all that we know now, it is hard to understand why every effort and every method is not being used to starve Obamacare of every dollar it needs for implementation and management.

There seems to be no recognition by this Congress of the need to shrink the size of government.  Even though the GAO has issued a report showing massive duplication of authority of government agencies, the elimination of which has been estimated to save $100B annually, the current budget proposals show no desire to address this low hanging fruit of spending reduction.

Perhaps the most disappointing action of the short life of this Congress is their action, or rather, inaction of dealing with a budget. 

As part of their campaign promises, the House Republican leadership comitted to a $100 B spending reduction for the current fiscal year.  However, each time they go to the microphone, that number seems to slip.  At this point, the House budget has $60 B in cuts with concerns being raised that this amount is “draconian.”

Draconian?  Really?  We had a deficit of $222 B in February ALONE and someone has the audacity to think $60 B is a problem?

The House is expected to pass ANOTHER continuing resolution on Tuesday.  The Senate is expected to agree to that resoltution to keep the government running past Thursday.  WHY?

With a $222 B shortfall in February (that’s one single month if you went to Wisconsin public schools) and the House budget fighting to get a reduction of $60 B for the rest of the year, what’s the point?  Even if they got the House plan adopted, should we really be congratulating them and doing high fives?  NO and HELL NO!

Wisconsin, Michigan and other states finally got some adults to deal with their fiscal situations.  Where are the adults we thought we elected to the House and the Senate?  McConnell has been a known RINO and inside the beltway guy.  Second only to Obama, he decides his principals by what he believes the personal political impact to be.  While it’s only been a few months, I’m ready to throw the towel in on Boehner as well.  Rather than force the issue of really addressing a spending reduction, Boenher is allowing Congress to continue to kick the can down the road.  For what?

We have a spending problem in Washington.  We elected men and women to address this spending problem.  Every day we allow the current administration to continue to function without forcing the issue is a day that the American people say “see, you’re no different than the Democrats” and another day that spending continues without abatement.

Like Governors Scott Walker and Rick Snyder, it’s time to address the spending problem head on.  We should have no more continuing resolutions.  Let the government “shut down.” Let’s see who notices.  Let’s have the debate.

The following statement from the House leadership and Rep. Paul Ryan sure makes it sound like at least elements of Ryan’s Roadmap for America’s Future will be part of the FY2012 budget process:

The American people are ready to get serious about tackling our fiscal challenges, but President Obama’s budget fails to lead. The President’s budget punts on entitlement reform and actually makes matters worse by spending too much, taxing too much, and borrowing too much – stifling job growth today and threatening our economic future.

The President says that he wants to win the future, but we can’t win the future by repeating the mistakes of the past or putting off our responsibilities in the present. Our budget will lead where the President has failed, and it will include real entitlement reforms so that we can have a conversation with the American people about the challenges we face and the need to chart a new path to prosperity. Our reforms will focus both on saving these programs for current and future generations of Americans and on getting our debt under control and our economy growing. By taking critical steps forward now, we can fulfill the mission of health and retirement security for all Americans without making changes for those in or near retirement. We hope the President and Democratic leaders in Congress will demonstrate leadership and join us in working toward responsible solutions to confront the fiscal and economic challenges before us.

Stephen Hayes notes that this inclusion in the FY2012 budget, due out of Ryan’s committee near the end of March, is a victory for Ryan and the freshmen. Even better, there’s rumors that the Senate Republicans will follow suit. Of course, Senate Democrat/Majority leader Harry Reid won’t let that see the light of day, but that will just show the difference between the off-the-cliff Democrats and the stop-the-madness Republicans.

As for the timing, need I remind people that, at least on a combined basis, Social Security will never run a cash surplus on its current trajectory again, or that the only reason the remainder of Medicare isn’t following the Hospital Insurance (Part A) into the black hole is that their funding mechanisms automatically increase the taxes, fees, and draws from the Treasury?

Byron York reports NPR has thanked Obama for increasing the FY2014 advance appropriation for the Corporation for Public Broadcasting. That’s right; not only does public broadcasting, a major arm of which has shown it is nothing more than a bought-and-paid-for subsidary of $oro$ Inc., get an increase, but it gets guaranteed funding two years in advance.

Rep. Ryan, appropriators; if you’re looking for a cheap 3-year/$1 billion-plus cut, here it is.

…a whole heap of the editorial board members on a wide cross-section of newspapers nationwide, both right-leaning and left-leaning. House Budget Committee communications director Conor Sweeney sent over the list this morning, and some of the commentary is extremely surprising:

• The Washington Post editorial board – They noted that the Office of Budget and Management assumes a far-rosier rate of growth in the economy in the middle years than the Congressional Budget Office just a month ago, with a warning that if it’s closer to the 3.4% the CBO is assuming than the 3.9% the OMB assumes, that will blow a rather large hole in the revenue projections, much like the recession did for 2008 through the present. They also note the OMB used PlaceboCare math, assuming 10 years of revenues to offset 2 years of the Medicare “doc fix” and 3 years of the AMT fix. Their most-devastating words, however, are reserved for the end, when they call Obama out for punting on the lions’ share of the budget hole.
• The USA Today editorial board – They pointed out that the $1.1 billion in “deficit savings” (note; that’s not exactly happening versus the CBO baseline) over the next decade is wiped out by just the $1.1 billion FY2012 budget deficit. The money quote – “It’s becoming hard not to conclude that Obama doesn’t much care about the debt threat or has decided to wait until after the 2012 elections. Either would be a shame, and economically risky.”
• The Detroit News editorial board – They point out that not only does Obama have an open-ended committment on “high-speed” rail and a notion that he can socialize the private-sector economy, but that the third of his “deficit reduction” that is dependent on new taxes isn’t exactly going to bring in the full $1.6 billion in new taxes he thinks it will. The money quote – “Something more along the order of gastric bypass surgery is called for if the United States is to stabilize its fiscal health.”
• The Chicago Tribune editorial board – They really hit on the complete lack of entitlement reform. The close, addressed to Congress:
  

  Here’s what they really need to do. They need to grab each other’s arms, hold each other up, tell the American people what it will really take to return the federal government to fiscal balance.

  And do it. Then they can — all together now — make a grand bipartisan shudder as the public screams. But they have to do it. They have to.

• The Los Angeles Times editorial board – Even though they think that $1.5-$1.65 trillion of deficit spending is appropriate for FY2011, they think $1.1 trillion is far too high for 2012. Their close – “White House officials have said that the budget is just a down payment on more significant, bipartisan deficit-reduction efforts to come. But as the housing crisis showed, a down payment that’s too small can leave borrowers with a debt they cannot afford.”
• The New York Times editorial board – Even though they like the budget, they slammed the lack of a long-term vision – “What Mr. Obama’s budget is most definitely not is a blueprint for dealing with the real long-term problems that feed the budget deficit: rising health care costs, an aging population and a refusal by lawmakers to face the inescapable need to raise taxes at some point.”
• The Investor’s Business Daily editorial board – They were bright enough to use the scare quotes around “deficit cuts” (which, as I’ll point out again and again, are not cuts at all against “doing nothing”), and point out why Obama was “gutless” – he wants to blame the Republicans for the pain from the necessary hard work.
• The Wall Street Journal editorial board – They point out that the White House-claimed “deficit reduction” happens only in the “out” years, with 95% happening after Obama’s first term is over and nearly 2/3rds happening after a potential second term. Like their upstart West Coast competitors, they see the real reason for the punting – to ambush the Republicans who will (hopefully) do the heavy lifting.

During the bloggers’ call held with House Budget Chair Paul Ryan (WI-01, and my Congressman) and House Republican Conference Vice Chair Cathy McMorris Rodgers (WA-05), it was briefly mentioned, and noted by Ed Morrissey, that the latest Obama budget was worse than doing nothing. Unfortunately, that wasn’t explored in the limited time available in the call. Allow me to rectify that.

Last month, the Congressional Budget Office released their Budget and Economic Outlook for FY2011-FY2021. That pretty much assumes things continue on auto-pilot, with no new laws being passed, taxes and “mandatory” spending increasing (or in some cases, decreasing) as specified while laws affecting them are allowed to expire on schedule, and “discretionary” spending increasing at the rate of inflation. Hence, one can fairly use it as the “do nothing” case.

First, let’s take a look at the top-line numbers for FY2012…

The “do-nothing” case assumes $3,655 billion of spending on $2,555 billion of revenues, for a deficit of $1,100 billion. For reference, the FY2010 numbers were $3,456 billion of spending on $2,162 billion of revenues and a deficit of $1,294 billion. It also assumes the debt held by the public at $11,598 billion (73.91% of GDP) and gross debt of $16,389 billlion (104.44% of GDP). Obama’s budget would jack up spending to $3,729 billion, while revenues would only increase to $2,627 billion, for a deficit of $1,102 billion. Meanwhile, the debt held by the public would increase to $11,881 billion (75.13% of a higher GDP estimate) and gross debt would increase to $16,654 billion (105.32% of GDP).

Next, let’s take things out to FY2016 (click for the full-size chart)…

By the end of FY2016, Obama’s budget would spend $18 billion more than leaving things on “auto-pilot”, while reducing revenues by $205 billion and resulting in a 5-year deficit of $3,770 billion ($223 billion more than “doing nothing”).

On the debt end, while the gross debt would be just slighly less at the end of 2016 in terms of GDP than it would be at the end of FY2012 (105.22% of GDP), it would still be significantly higher than at the end of FY2012 ($20,825 billion). Worse, the publicly-held debt would increase to $15,064 billion, or 76.12% of GDP. All of those are higher than the “do-nothing” scenario.

You might have noticed the deficit for FY2016 in the Obama budget would be $10 billion less than the “do-nothing” scenario. With that in mind, let’s take a look at the second half-decade, from FY2017-FY2021 to see whether that continues to hold true (once again, click for the full-sized chart)…

There isn’t exactly austerity in the second half of the decade either. While spending over the full decade would decrease somewhat over the “do-nothing” scenario ($102 billion, to a “mere” $45,953 billion), a larger drop in revenue ($338 billion) would leave a 10-year deficit of $7,207 billion, $236 billion more than “doing nothing”). Specifically for FY2017-FY2021, the 5-year deficit would increase by $13 billion versus “doing nothing” to $3,437 billion.

On the debt end, things aren’t rosy either. Debt held by the public would increase to $18,967 billion ($714 billion more than “doing nothing”), while gross debt would increase to $26,346 billion ($1,290 billion more than “doing nothing”). Once again, the projected increase in GDP doesn’t cover the increased debt, as debt held by the public would increase from 76.66% of GDP to 77.00% of GDP, and gross debt would increase from 105.23% of GDP to 106.95% of GDP.

In short, that wasn’t a chainsaw, an axe, or even a dull, rusted butter knife Obama used on the budget. It was a heaping of lard.

Revisions/extensions (11:48 am 2/15/2011) – Thanks to Bruce McQuain, Memeorandum, Ed Morrissey for the links. Hopefully my host won’t kill me because you fine folks are swamping the server so much I couldn’t get this update up.

Related (H/T – Mitch Berg) – I’m not the only one to catch the sham. The Heritage Foundation’s J.D. Foster has a longer explanation of why the numbers above don’t match up to the claimed “cuts”. To wit, for this year, Pell grants and some surface transportation spending are reclassified as “mandatory” spending, while the Iraq/Afghanistan operations (freshly re-classified to “regular discretionary” spending), get cut. Meanwhile, the 10-year increase in total spending is 30% above inflation (49% total).

ABC News reports that the Senate Democrats, specifically a staffer for Senate Appropriations Labor, Health and Human Services, and Education subcommittee chair Tom Harkin (D-IA), arranged for a 1/24 rally of lobbyists and interest groups to call for even more federal tax dollars to be spent on things the federal government has no business spending mone…er, labor, health and human services, and education (wait a minute; I was on the right track). The staffer even misapproprated a Reaganomics quote by saying a rising tide raises all boats. Point of order – that’s a rising tide in the private sector; one focused on raising the public sector tide necessarily swamps the private sector and ultimately sinks all boats.

A side note; thanks in no small part to No Child Left Behind, that particular item on the budget trails only defense in discretionary federal spending.

Yesterday, House Budget Committee chair Paul Ryan (R-WI) set the overall FY2011 House discretionary budget authority level at $1,054.7 billion (or if you prefer, $1.05 trillion), with “non-security” at a claimed “FY2008-for-the-rest-of-the-year” $419.8 billion. Meanwhile, House Appropriations Committee chair Hal Rogers (R-KY) set the levels of the 12 individual components of said authority. I do have good news, bad news, and ugly news, which I’ll summarize after the revealing chart (side note; it was a beast to actually find the FY2008 budget authority amounts). Portions of the chart should look familiar – the FY2010, the Obama proposed numbers, and the House FY2011 numbers were included in Rep. Rogers’ release. I cobbled together the FY2008 numbers from the final House Reports on the 2008 Defense appropriations bill and the 2008 omnibus bill, then crunched together a final column which I’ll explain in a bit.

Click for the full-sized graphic

The good news is, outside of the parts of government that are under the purview of the Defense subcommittee, those are actual cuts from what was spent last year. Specifically on the “non-security” end, that’s a $42.6 billion cut from FY2010 levels, and a $58.0 billion reduction from what Obama wanted to spend this year.

That’s where the good news ends. Despite it being, in some cases, quite significant in percentage terms, the overall cut is but a drop in the $1,480 billion ocean of deficit projected for FY2011 if nothing at all changes.

On a policy level, that isn’t exactly a full-on return to FY2008 levels for FY2011 to which the House Republican Conference sure seemed to pledge, and which a significant portion of the Republican Study Committee wants for the entire fiscal year. Depending on whether one measures from the FY2010 numbers as the RSC did or the Obama proposal as the HRC did, that would have been an $82.9 billion cut (an undersell by the RSC, which estimated an $80 billion cut) or a $98.3 billion reduction (an oversell by the HRC, which estimated a $100 billion reduction). It still wouldn’t move the deficit off of a new record, but it would be a second drop.

Now, for the ugly news. I also included a column showing what discretionary spending would be if one were to assume the first 5 months at pro-rated FY2010 levels (which the government is supposedly limited to under the various continuing resoultions) and the last 7 at pro-rated FY2008 levels. It looks like they missed the mark by $5.7 billion.

Revisions/extensions (2:01 am 2/4/2011) – With that said, it is important to note this is just for FY2011, and that comprises, depending on whether one counts from the day the Republicans retook the House or the last day of the current continuing resolution, 9 months or 7 months respectively. Neither President Obama nor Rep. Ryan have put together a FY2012 budget yet. I haven’t taken a look at what knocking spending down to FY2006 levels starting in FY2012 will do on a 12-month basis (it’s quite late), though I strongly suspect that it would bring a 12-month actual cut to over $100 billion.

If Paul Ryan’s and Michele Bachmann’s warning-klaxons’ responses weren’t enough to scare you, Tom Blumer took apart in his latest Pajamas Media column the 2010 Financial Report of the United States Government. I could focus on the after-TARP-tricks (explained in the column) cash deficit of $1.41 trillion in 2010 (with 2009’s adjusted downward by a like amount to $1.30 trillion), or the $2.08 trillion (after a $0.13 trillion worsening adjustment in changes of assumptions related to long-term assumptions on federal employee retirement benefits) net operating cost (GAAP) deficit, or the fact that, for each of the 14 years the report was to be produced to GAAP standards, the Government Accountability Office could not sign off on it. However, since I’ve somehow become a SocSecurity “watcher”, I’ll focus on that:

How about Social Security and Medicare? Well, there’s bad news and, as is often the case with this bunch, pretend good news. The bad news, as seen here, is that the government’s actuarial liability for Social Security jumped by $270 billion in fiscal 2010 to almost $8 trillion. The program now runs at a deficit during most months. Without changes, Social Security will hemorrhage cash at an ever-increasing rate in the coming years.

But, but, but I thought the Trustees said SocSecurity’s position was “improved” relative to taxable payroll because PlaceboCare will force employers to offer more wages instead of health insurance. That leads me to the Medicare part…

As to Medicare, the government claims at that same link that its actuarial liability for that program decreased by $15.3 trillion, a stunning turnaround it attributes to the passage of ObamaCare. Here what the GAO had to say about that assertion:

Significant uncertainties […] primarily related to the achievement of projected reductions in Medicare cost growth reflected in the 2010 Statement of Social Insurance, prevented us from expressing an opinion on that statement.

That’s polite accounting-speak for: “Though we can’t prove it, we think it’s a load of rubbish.”

Which raises the question of whether the 75-year actuarial deficit in Social Security should only have gone up by $270 billion. I should note that the GAO actuarial deficit does not include any “trust fund” operations as the money does not exist (yet).

As for the cash deficits, the latest CBO “The Budget and Economic Outlook” (released today) now projects that the combined OASDI funds will not return to anything approaching cash surpluses, though the OASI fund will have a very-minimal (under $10 billion) cash surplus between 2012 (or perhaps 2013; the chart is unclear) and 2015.

I’m still digesting the larger report, but there’s two more things to note right now – if current laws, levels of taxation and levels of spending continue/increase/decrease/end as scheduled, the FY2009-FY2012 deficits will be $5.3 trillion (with $1.5 trillion projected for this fiscal year and $1.1 trillion projected for FY2012), and total debt will eclipse the Gross Domestic Product no later than 2017.