Obama's new budget saves $24 billion

[Puppycow]

I just want to point out something about the projected deficits going forward.

The projected deficits for 2009 and 2010 were much higher than they turned out to be. Here's a story from 2 years ago:
Deficit Projected To Swell Beyond Earlier Estimates

The White House's economic assumptions have come under fire for being too optimistic: Over the next decade, the administration projects that the economy will grow at an average annual rate of 2.8 percent, rosier than forecasts by the CBO (2.5 percent) and the Blue Chip economic consensus (2.3 percent).
. . .
The CBO is the official scorekeeper for budgeting on Capitol Hill, and the new report could complicate efforts to win congressional approval for Obama's $3.6 trillion request for the fiscal year that begins Oct. 1. While Obama had predicted a deficit of nearly $1.2 trillion for 2010, the CBO puts next year's budget gap at nearly $1.4 trillion. And this year's deficit is now projected to soar past $1.8 trillion, or 13 percent of the economy -- the deepest well of red ink since the end of World War II.

In point of fact however, the deficits for both years were less than the Obama administration estimate that was criticized for being too optimistic. The deficit for 2009 was $1.4 trillion, $450 billion less than the CBO estimate and $350 billion less than the Obama administration estimate. That for 2010 is currently estimated at $1.171 trillion, more than $200 billion less than the CBO estimate.

So it's by no means a given that the proposed budget would actually increase the debt by $7 trillion over the next decade.

 

[Travis]

You know what, the more I think about it, the more I agree that high-speed rail shouldn't be a priority when the budget deficit is this big.

It should probably be one of the sacrificial lambs.

I did a little checking on the numbers, and it seems doubtful that the benefit will be worth the cost (in the US).
http://economix.blogs.nytimes.com/tag/high-speed-rail/

However, it seems to work pretty well here:
http://en.wikipedia.org/wiki/Shinkansen


Note of caution though. What makes sense between Tokyo and Osaka, makes less sense between other cities.


So it works in Japan between Tokyo and Osaka (with Nagoya in the middle), but it is not so cost-effective elsewhere, and private companies are not willing to pay what the government paid for the tracks.

High speed rail has been successful every single place it has been built. Including countries like Spain which has the same population size and density as California.

Japan just offered California a $20 billion loan to get our system off the ground. All it needs now is $8 billion from the Feds.

I think high-speed trains are a great idea, when the nation has a surplus.

i'd rather just spend money rebuilding dieing infrastructure. lots of construction jobs there.

Now is absolutely when we should be investing in high speed rail. Building it will never be cheaper than right now and using it will allow for greater economic mobility when the price of oil skyrockets.

 

[Puppycow]

High speed rail has been successful every single place it has been built. Including countries like Spain which has the same population size and density as California.

Successful by what definition though?

Successful for the people who benefit? Sure.

But the people who pay for it and the people who benefit from it are not necessarily the same people. I don't doubt that this would benefit California and Japan. But I notice that if Californians had to pay for it themselves, they might not think it was worth it.

It's kind of like a new baseball stadium. The owners say it would great for the city, so the city should help pay for it, but not everyone who is paying for it is a baseball fan. Or like how Alaskans want a bridge to nowhere if the Feds are paying for it, but they don't want it if they have to pay for it themselves.

 

[Vorticity]

These are not times of ordinary priorities.

There are a lot of things that don't normally make sense, but which have to be done when you're facing severe consequences.

We're over $14T in debt, and running nearly $1T/yr projected deficits for the next 10 years even after Obama's proposed cuts. If we do that, we risk our debt becoming junk, which would crash the economy.

Where would NASA be then?

Time to make hamburger of a few sacred cows.

Or perhaps we should cut heating subsidies for the poor even further?

Look at this pie chart of the federal budget.

NASA's budget (in constant dollars) is currently about half of its peak level in the middle sixties. NASA takes up 0.53% of the budget. Cutting NASA will do nothing.

Social Security, Defense, Unemployment, Welfare, Medicare, and Medicaid together make up more than 75% of the budget. If we are not willing to make big cuts in these, then the whole thing is a non-starter.

As for NASA, I consider it by far the best bargain in the entire budget. To me, it represents a very meager investment in the future of our species in terms of having some meaning for our existence beyond mere survival.

 

[WildCat]

High speed rail has been successful every single place it has been built. Including countries like Spain which has the same population size and density as California.

Japan just offered California a $20 billion loan to get our system off the ground. All it needs now is $8 billion from the Feds.

If it's such a sure-fire success why does California need anyone else to give it the money? Let California pay for their high-speed rail, I'm sure you'll be laughing all the way to the bank at the raging success it will be.

The fact that California won't pay for it themselves is pretty clear evidence to me that they don't actually have the confidence you do that it will be successful.

 

[Puppycow]

Alternative F-35 engine program cut

This is despite Boehner's efforts to keep it in the budget, BTW.

 

[BeAChooser]

http://www.foxnews.com/politics/2011/02/16/obama-issues-government-shutdown-threat/

Obama Issues Government Shutdown Threat

February 16, 2011

LOL! I like Governor Christie's response to those democrats threatening a shut down in New Jersey in the video below (it starts about 2:15 in the video):

http://www.youtube.com/watch?v=oOTvhfOk6vc&feature=player_embedded

 

[eeyore1954]

Many of the new budget tax increases are from a variety of sources that have been rejected before.
http://www.bnasoftware.com/News/Tax...Proposals_Previously_Rejected_by_Congress.asp

President Obama's $3.7 trillion budget proposal for fiscal year 2012 relies on dozens of ideas that have been previously rejected by a Democrat-led Congress and will face an even tougher road ahead under a new, larger Republican presence in the Capitol, lawmakers said Feb. 14.

Bush tax rates for high income taxpayers, they would also have itemized deductions limited including mortgage interest, contributions and state and local taxes. The estate tax will come back to 2009 levels. These things were rejected before but the deficit reduction is dependent upon them.
Do you think he expects them to pass?

In all, the budget proposal would impose about $730 billion in new taxes on businesses and wealthy individuals over the next decade, while cutting about $400 billion in taxes on middle-income families, the working poor and other businesses, for a net tax increase of about $330 billion.
Those numbers, however, don't include additional tax revenue from letting Bush era tax cuts for the wealthy expire at the end of 2012. Letting those tax cuts expire would generate an additional $709 billion over the next decade

In my opinion if he was serious about balancing the budget he would try to have all of the Bush tax cuts expire (maybe leave the lowest rates unchanged but at least the middle class should help). This will never happen. Is it because he is pandering to voting base? I don't know if I am correct in assuming the lower income votes go more to President Obama.

 

[Piggy]

You have a point. Some hard choices will have to be made eventually. But I don't think that disaster is as immanent as you see it. The bond markets and the rating agencies don't see it in nearly as dire the terms as you do, because America has a AAA rating, and the yields on treasurys are modest. There's a case to be made for waiting for the economy to pick up some more momentum and the unemployment rate to come down some more before trying too hard to balance the budget.

Oh, I'm not saying it's going to happen tomorrow. But adding another $7T over the next 10 years is not going to help, and will bring us much closer to the tipping point.

 

[Piggy]

Look at this pie chart of the federal budget.

NASA's budget (in constant dollars) is currently about half of its peak level in the middle sixties. NASA takes up 0.53% of the budget. Cutting NASA will do nothing.

Social Security, Defense, Unemployment, Welfare, Medicare, and Medicaid together make up more than 75% of the budget. If we are not willing to make big cuts in these, then the whole thing is a non-starter.

As for NASA, I consider it by far the best bargain in the entire budget. To me, it represents a very meager investment in the future of our species in terms of having some meaning for our existence beyond mere survival.

To be clear, I'm not saying that NASA's budget should be cut.

In fact, the only things we really must tackle are Social Security, Medicaid, military spending, and taxes. Those cannot be avoided.

But that said, ain't nothing sacred at this point.

 

[Piggy]

Didn't feel like responding to something when the point I was making that while we do need to do cuts (and raise taxes) I don't feel it's worthy of DRASTIC AUSTERITY MEASURES

I see. Yes, those are dangerous. We are not (yet) Greece, after all.