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A Budget Cut Mirage

by Elaine Schwartz    •    Feb 12, 2011

Reacting to concern about the federal deficit, the Republican leadership seems to be targeting $100 billion in discretionary spending cuts. Similarly, for his fiscal 2012 budget, President Obama recommends a 5-year freeze on non-security discretionary spending. Both proposals sound like a lot.

But…

According to NY Times columnist David Brooks it is a “mirage.” Defined as an imaginary vision, a mirage is a fantasy. Targeting non-security discretionary spending creates a fantasy because, as Brooks says, it is a mere sliver of federal spending. A discretionary spending goal enables the Congress and the President to focus on small crucial programs such as Teach for America, R & D, and foreign aid. And even then, they will not have dented a projected $1.5 trillion deficit.

This Pew survey is one reason why.

The Economic Lesson

Imagine a pie. Take out 5 slices.  One slice for Health (primarily Medicare and Medicaid), one for Defense, and 3 more for Social Security, Income Security, and Interest on the existing debt. Having consumed more than 3/4 of the pie, we have not even touched the discretionary slices. And, it is those discretionary slivers of the pie that are being targeted for cuts rather than the five big slices.

Here is a great interactive visual displaying the 2012 budget proposal.

 

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