Where US spending cuts will hurt most
At least 37 federal programs will lose $500 million or more. If enacted all at once, 9 years of reductions would lower the current debt by just 7.5%.
There's a paradox about government spending. A lot of taxpayers think there's too much of it, but when it comes to cutting specific programs, they want to leave everything the way it is. It turns out that we like what our government buys more than we realize.
The big spending cuts due to kick in at the start of 2013 present the same conundrum. Under the Budget Control Act signed into law in summer 2011, Congress is supposed to start cutting about $110 billion per year in spending, with half coming from defense and half coming from other programs.
It sounds reasonable. The cuts represent less than 3 percent of all government spending, and we have to start somewhere if we're going to begin paying down a national debt that now tops $16 trillion.
But once the ax hits specific programs, the cuts seem scarier. The Obama administration, no doubt, was well aware of that when it drafted a recent report detailing where, exactly, that $110 billion is going to come from every year. The Budget Control Act stipulated that some programs would be exempt from cuts, including Social Security, Medicaid, food stamps, veterans' benefits, and a few other things. Taking those off the table means the remaining programs will need to be cut by proportions generally ranging from 7.6 percent to 9.4 percent.
Cuts of that magnitude would be painful. In its report, the White House argued that such cuts "would be deeply destructive to national security, domestic investments, and core government functions." Instead of immediate, across-the-board spending cuts, President Obama would prefer to address the problem with a mix of smaller spending cuts, higher taxes on the wealthy, and other reforms that include a higher eligibility age for Medicare and Social Security.
The scheduled cuts are now law, and they'll go into effect unless Congress changes the law. I scoured the White House report to get a feel for where the money will come from: At least 37 federal programs will lose $500 million or more, which will account for about $81 billion of cuts. The remaining $29 billion will come from an array of smaller programs.
Here's where some of the biggest cuts will occur:
- Operations and maintenance for the Army, Navy, Air Force, Marines and National Guard: $20.4 billion in cuts
- Military procurement: $11.5 billion
- Medicare: $10.6 billion. (The new law limits cuts in Medicare to 2 percent of total spending.)
- Military research: $6.5 billion
- Defense health programs: $3.3 billion
- National Institutes of Health: $2.5 billion
- Special ed and education funding for the disadvantaged: $2.3 billion
- Rent subsidies for low-income tenants: $1.5 billion
- Afghan security forces funding: $1.4 billion
- Federal unemployment insurance: $1.4 billion
- Diplomatic and consular funding: $1.1 billion
- NASA: $1.1 billion
Though the numbers may sound large, the economy can probably handle such cuts. There might be layoffs at defense contractors and some government agencies, along with lower spending by people getting smaller government subsidies. Still, the cuts represent less than 1 percent of the nation's total economic output. On their own, the scheduled cuts would slow the economy but probably not induce a recession.
The problem is that they wouldn't cut the national debt by all that much either. The Budget Control Act cuts amount to just $1.2 trillion over nine years (the numbers don't add up precisely because part of the savings includes interest expenses that won't have to be paid). If enacted all at once, those nine years of cuts would lower today's debt by just 7.5 percent. For all the pain that scheduled cuts would cause, a lot more is coming.
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What I would do
No government sponsored aid to foreign countries.
No prohibiting individual aid to a foreign country unless the country is an enemy.
No tax on wages. No tax on investments. Tax on sales only.
No aid to anyone who is not a citizen.
To be a citizen in full standing you must be born of two citizens or be born of one citizen on United States land. Being born of one citizen in a foreign country or being born in this country of two non citizens would give you the right of dual citizenship on your 18th birthday; you would not be entitled to any benefits you had not earned.
No elected or hired employee of the government would be exempt from any law.
No government employee would be allowed to belong to a union.
All embassies in hostile countries to have marine security.
The military budget definitely needs to be slashed. I'm a proud patriotic vet. But one thing I witnessed in the service that bugged the **** out of me was LARGE amounts of BRAND NEW supplies being buried EVERY YEAR just so budgets can be maintained and increased. WHY? ????
There in lies the problem Mr. Rick Newman - you don't view a 7.5% decrease as substantial. We need to make the cuts, and we need to do it in increments. It would be moronic to think we were going to balance the budget next year - we could't possibly tax enough, nor would it be wise to cut that much. You yourself say in the article the economy could sustain it - sounds to me like a good balance then - sustainable cuts that MUST BE DONE, we can't go on borrowed money forever. We need to initiate cuts, and as the economy adjusts, more cuts, slow and incrementally until we get our financial house in order.
I have made my living in agriculture all my life. There is absolutely no need for price supports, government loan programs, subsides, etc. they should have been gutted in 1945. We do not need house and senate agriculture committees, a United State department of agriculture. Give agriculture a fresh fruit and vegetables commodities market. Put agriculture on the world wide free market. Agriculture will produce what we want to consume, not what government subsidizes. Government is the greatest contributor of obesity, it subsidizes fats and oils, sugar, corn sugar and the like. Productivity will increase in agriculture by 20% a year as poor management is forced to leave agriculture and resources are redistributed among growers who produce what the consumer want.
If we didn't blow 4.5 TRILLION dollars ( and still counting) on wars in the Middle East.
You were misled. Why should the innocent suffer?
Sign a petition for the Re-investigation of 911 and put the blame where it belongs.
Or continue to suffer unnecessarily.
Keep it simple, make straight across the board cuts in all government agencies. TFB if your favorite program takes a hit, let everyone take the hit. Isn't that what being "fair" is all about?
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