The President's budget proposal will not be released until February 14, 2011, yet the leaks and politics are spewing into the Internet beltway.
The budget proposal will recommend ending Bush-era tax cuts for the highest earners when they are set to expire at the end of 2012, though the White House didn't include the projected revenue from this in its budget forecasts. The budget projections are based on the administration's economic forecast which shows a recovering economy, but it was made before the December tax-cut compromise which, most private forecasters say, has boosted the near-term growth outlook. Faster growth could mean higher government tax revenues and a smaller deficit.
Many of the spending cuts or reductions in the budget are already known. It would, for example, freeze levels of domestic non-defense spending for five years, something the White House believes will save $400 billion.
The White House will also propose reductions to a number of federal programs, from the U.S. Forest Service to a program that provides heating assistance for low-income families. It will adopt previously recommended reductions in military spending that would reduce costs by $78 billion over several years. The budget proposal will also recommend targeted spending increases, particularly in education and infrastructure programs.
We have a cut off for heat to the poor, charging interest on student loans while that person is still in school, a comment that maybe we should tax the rich, after just giving the rich a massive tax break.
Supposedly the White House proposal gives $1.1 trillion in budget reductions, primarily through spending cuts, over the next 10 years, with a ratio of two-thirds spending cuts to one-third tax increases.
Strange stuff like not allowing Pell grants to be used during the Summer is being reported. Now this makes no sense, the best way to make it through school are co-ops and internships. Co-ops require one take summer classes, so why the bust on the summer to save what? Reports claim this will save $100 billion, but precisely how is unclear. Additional leaked details give $78 billion in defense cuts and a freeze on Federal workers pay,
The good news is the White House is trying to separate out social security to take it off the incorrect, political rhetoric and agenda table.
The president’s budget director also tried to separate Social Security from the roster of issues that need to be tackled in the budget.
“Let’s be clear that Social Security is not contributing to the short-term debt,” he said. “Social Security is a separate issue. It’s something where we have an obligation to the American people to make sure Social Security is sound for this generation and the next generation. And the president says he wants to work on a bipartisan basis to deal with Social Security.”
The president plans to unveil his 2012 spending plan Monday, a $3.5 trillion-plus budget which, according to officials, will outline $1.1 trillion in deficit reduction over the next decade. At the same time, Republicans are still trying to cut back this year's spending. They want to bring a bill to the floor Tuesday that they claim would cut $100 billion out of the budget for the seven months remaining in the 2011 fiscal year.
How precarious this game of chicken becomes is unclear. Aside from the possibility of a debt-limit freeze, which could result in default, one freshman GOP lawmaker suggested last week that a 1995-style government shutdown could still be in the cards. Rep. Tim Scott, R-S.C., told Fox News that "nothing's off the table."
But House Speaker John Boehner downplayed the likelihood of such an outcome Sunday on NBC's "Meet the Press."
"Our goal is to reduce spending," he said. "It is not to shut down the government."
When the actual budget details are revealed, we'll have an update. This is the pre-show game. Regardless, this never ending budget cut agenda with a jobs crisis unseen since the Great Depression invites a welcome to 1937.