CBO Analysis: Budget Deal Cuts 2011 Spending by $352 Million, not $39 Billion

Boehner and Obama agree to pacify the proles with lies

This is hilarious. From the National Journal:

A Congressional Budget Office analysis of the fiscal 2011 spending deal that Congress will vote on Thursday concludes that it would cut spending this year by less than one-one hundredth of what both Republicans or Democrats have claimed.

A comparison prepared by the CBO shows that the omnibus spending bill, advertised as containing some $38.5 billion in cuts, will only reduce federal outlays by $352 million below 2010 spending rates. The nonpartisan budget agency also projects that total outlays are actually some $3.3 billion more than in 2010, if emergency spending is included in the total.

The astonishing result, according to CBO, is the result of several factors: increases in spending included in the deal, especially at the Defense Department; decisions to draw over half of the savings from recissions, cuts to reserve funds, and mandatory-spending programs; and writing off cuts from funding that might never have been spent.

According to Fox News, Congress is in a uproar about it.

Liberal Democrats remain opposed to the plan because of its trims and because of policy points, like its restriction of abortion subsidies, but a rebellion is spreading among conservative members of the House and Senate.

The problem is that in heralding the deal, Obama, Boehner and Reid played up $39 billion in cuts, which were assumed to be for the current fiscal year. But those cuts include some gimmicky accounting and the savings obtained from not tapping reserve funds for programs like Medicaid.

When the CBO crunched the numbers on how the deal would affect the projected $1.65 trillion deficit for this year, the result was a reduction of .02 percent.

So I guess we could still be headed for a shutdown? The House will vote on the bill today.

The real danger zone for the deal would be around 70 Republican defections. That would cast doubt on whether there are enough moderate Democrats [i.e., DINOs] to fill the gap and get to the requisite 217 votes. It would also be nearly a third of the Republican caucus in opposition, a weak showing for the GOP ahead of the even bigger battle over Obama’s request for an increase to the government’s $14.3 trillion borrowing limit.

Bond buyers will be watching for major fractures here. If the House GOP is in a riot, watch U.S. debt prices start to climb.

We are so f’d.

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15 Comments on “CBO Analysis: Budget Deal Cuts 2011 Spending by $352 Million, not $39 Billion”

  1. bostonboomer says:

    Lambert’s take on the President’s “Greatest Speech on Cat Food evah.”

  2. Pat Johnson says:

    Does it ever occur to anyone else that we are being led by a tiny handful of people when compared to the 350 million of us who reside in this country?

    Less than 600 in congress, a weaselly group on Wall Street, corporate controlled PACS, and the members of the Faith Based Initative probably don’t add up to more than 5,000 in all. A fraction of the population too small to accurately measure.

    It is like being held hostage under the whims of such a slight percentage of “the powers that be” that it is almost comical.

    Comical if it weren’t so drastic.

    • bostonboomer says:

      And all they care about is not taxing rich people.

      • dakinikat says:

        I have to say I agree with David Stockman. It’s a fetish. Everything they say is not the least bit connected to reality. If high taxes on the rich are so bad, we’d have never had good economies in the 1950s and 1960s. Even Ronald Reagan didn’t ignore joblessness and throw all tax revenues–not associated with hard work instead of inheritance or speculation–to the wind. They won’t be satisfied until all taxes on capital are gone. Why are they funding speculation and casino-type gambling on wall street? All the futures markets, swap markets, option markets, etc do not create jobs. They only create churning fees and bonuses for parasites.

  3. Pat Johnson says:

    Well I’m just thankful to have a president who stands up for the rights and needs of his citizens.

    Oh wait, I’m on the wrong planet!

    • dakinikat says:

      Or wrong country … even the traditional banana republics have more compassionate presidents than this … just think about Brazil and Chile.

  4. I agree about David Stockman. He was on Dylin Ratigan the other day and he laid it out in plain terms. The right wing republican on the show was trying to challenge him on tax increases. He looked straight at him and gave him several reasons why the persoh had no basis. One of them was the taxes we had under Clinton and we still had growth.

    I think part of the reason of slow growth is the inability of the government to uphold the laws we have. Several articles are comming out from several sectors on how nobody is being prosecuted. Like during the crisis when interbank loans dried up, no one trusts the government and will not invest. So – we will have the lost decade just like Japan had.

    • dakinikat says:

      Most of the slow growth comes from the fact that the majority of people are losing wealth and income. That’s stalled consumer spending and that stalls business investment. You can’t keep funneling wealth and income into a few people’s pockets that have the ability to take that money anywhere and a tendency to use an extraordinarily huge amount of it for casino-style speculation and expect job creation. The Republicans are completely delusional. They’ve created false narratives for everything from Ronald Reagan to economics to whatever it is they want to justify wealth and rights grabs.

      • Your points are valid. I would just add, if a small business owner was contemplating a capital purchas, or hiring people, they are investing into a very uncertain economy.

        Did you notice that Pelosi was kept out of the discussian. She is letting Boehner do his oun whip counting. The Democrats are not whipping their membership.

    • dakinikat says:

      Here’s another good fundamental reason:

      More Americans leaving workforce

      The share of the population that is working fell to its lowest level last year since women started entering the workforce in large numbers three decades ago, a USA TODAY analysis finds.
      Only 45.4% of Americans had jobs in 2010, the lowest rate since 1983 and down from a peak of 49.3% in 2000. Last year, just 66.8% of men had jobs, the lowest on record.

      The bad economy, an aging population and a plateau in women working are contributing to changes that pose serious challenges for financing the nation’s social programs.

  5. Dario says:

    My take of the budget shut down was from the beginning that it was kabuki theater. Now the numbers appear to support my view. Neither party wanted the shut down, and Boehner placated the Tea Party, all new people, with a budget proposal that didn’t do anything. The Bill Clinton government shut downs are rare events.

    Here is what I would do if I were Pelosi: I’d make sure that all the Democrats join the Tea Party and turn down the agreement. I’d send a message to Obama to make sure and always include me in negotiations. But she won’t because she’s not LBJ.

  6. CinSC says:

    Hooray for the CBO. Although if they keep raining on everyone’s delusional parade… they’ll probably see their budget on the congressional chopping block. Their website is remarkably informative and easy to navigate.

  7. dakinikat says:

    Jobless claims are up again and so are ‘core’ producer prices:

    New claims for unemployment benefits unexpectedly rose last week, bouncing back above the key 400,000 level, while core producer prices clumbed faster than expected in March, government reports showed on Thursday.

    Initial claims for state unemployment benefits rose 27,000 to a seasonally adjusted 412,000, the Labor Department said.

    dip … dip … dip double dip dip dip

    • madamab says:

      “Unexpectedly rose?” Who didn’t expect them to rise, I wonder? How stupid do you have to be to believe that the economy is recovering?

      BTW – great post, BB. I am lolsobbing! Actually, that $352 million is just about the same amount of money that was supposed to be stripped from Planned Parenthood, give or take $35 million.

      http://www.politico.com/news/stories/0211/49830.html