Warning: people on blood pressure medication are urged not to read this.
Yesterday the media had a field day when it was uncovered that the hard fought $38 billion in budget "cuts" which almost caused America to shut down were in reality $14 billion. We, thus, can't wait to find out what the response will be when it is uncovered that the actual cuts were... $353 million. Yes: the ongoing functioning of the government was a pawn in a soap opera whose benefit to the US debt is $353 million, or about what Goldman's trading desk makes in less than one day.
From Washington Post:
A new budget estimate released Wednesday says that the spending bill negotiated between President Barack Obama and House Speaker John Boehner would produce less than 1 percent of the $38 billion in claimed savings by the end of this budget year.
The Congressional Budget Office estimate shows that the spending bill due for a House vote Thursday would pare just $352 million from the deficit through Sept. 30. About $8 billion in cuts to domestic programs and foreign aid are offset by nearly equal increases in defense spending.
The House began debate on the measure Wednesday with a test vote slated for the early afternoon. The measure appears on track to pass the House and Senate this week before a stopgap spending measure expires Friday at midnight despite opposition from some of the GOP’s most ardent budget cutters.
The budget deficit is projected at $1.6 trillion this year.
The CBO study confirms that the measure trims $38 billion in new spending authority, but says many of the cuts come in slow-spending accounts like water-and-sewer grants that don’t have an immediate deficit impact.
Republicans say they wish the measure would cut more but that the cuts negotiated by Boehner are about as good as can be expected giver that Democrats hold the Senate and the White House. In his February budget, Obama pressed a freeze on domestic agency accounts.
“We continue to push this president to places he never said he would go,” said House GOP Whip Kevin McCarthy of California. “The president said he would freeze spending. Our Speaker negotiated, outnumbered 3-1. We have cut spending.”
Speechless yet? You should be. And for those confused how B.H.O. picked the arbitrary number of $4 trillion in "cuts", John Lohman summarizes it best.
How Washington Cuts $38 Billion in 5 Simple Steps:
1. Announce spending bill that claims $38 billion in cuts
2. Wait for CBO to announce it only cuts $353 million1
3. Realize you only do 0.0093% of what you say2
4. Divide $38 billion by 0.0093% to get necessary target3
5. Round to the nearest trillion and announce result
1 : Source: Washington Post, April 13, 2011
2 : $353 million divided by $38 billion
3 : $38 billion divided by 0.0093 = 4.1 trillion