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Kimberly Amadeo

Shutdown Averted - What Was and Wasn't Cut

By April 11, 2011

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The Republican-led House and President Obama agreed to $80 billion in cuts over in the next five months from the Fiscal Year 2011 Budget, which works out to $38 billion cut from current spending levels. The agreement averted a government shutdown that might have withheld paychecks from military troops overseas, closed national parks and idled thousands of federal workers. Keeping the government running is a good thing. What's being cut? Not much.

Republicans compromised, giving up an earlier proposal of $61 billion in cuts in the non-defense discretionary budget. These cuts would have resulted in a loss of 800,000 jobs, while preserving the Bush tax cuts. Other "riders" were also not passed, including cuts to Planned Parenthood, and blocks to health care reform and the Dodd-Frank bank reform legislation.

Most of the cuts were earmarks or programs that couldn't spend the funds, anyway. These so-called cuts were really legislative sleights-of-hand that probably would have happened regardless. (Source: AP, Obama Prevent Cuts to Favorite Programs, April 11, 2011)

Republicans are resisting a Democratic proposal to cut $1.7 billion from defense. Security spending, which was $891 billion in the FY 2011 budget, is than either Social Security ($730 billion) or Medicare/Medicaid ($788 billion).

Furthermore, $38 billion in cuts isn't much compared to the FY 2011 $1.3 trillion deficit. Congress next has to tackle Obama's recently submitted $3.7 trillion budget for Fiscal Year 2012, which will create an unnecessary $1 trillion deficit.These deficits will get added to the $14 trillion Federal debt, taking it well over the $14.8 trillion U.S. GDP, or total economic output of the United States last year.

Want to know more about the Federal budget for each Fiscal Year?

Track the progress with each of the articles described here:

  • Fiscal Year 2012 - The Obama administration expected to take in $2.6 trillion in revenue (through taxes) and spend $3.7 trillion, creating a deficit of $1.07 trillion.
  • Fiscal Year 2011 - The deficit for FY 2011 was $1.3 trillion, the third largest in U.S. history.
  • Fiscal Year 2010 - President Obama's first budget created a record $1.6 trillion deficit.
  • Fiscal Year 2009 - President Obama's added the Economic Stimulus Act to President Bush's FY 2009 budget to fight the recession.
  • Fiscal Year 2008 - This pre-recession budget focused on the War on Terror.

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(Photo Credit:Michal Czerwonka/Getty Images)

Comments

April 19, 2011 at 2:27 pm
(1) Barry W. Shook says:

The US Government DID NOT CUT THE BUDGET by 38 billion dollars–they cut the budget by a mere $356 million dollars. The rest of the $37.4 billion dollars “cut” is money that would have never been spent to begin with! You been hiding under a rock, and not reading the news lately?

April 19, 2011 at 4:54 pm
(2) Kimberly Amadeo says:

Hi Barry,

Thanks for your comment. I actually agree with you, as I mentioned in the blog that ”

Most of the cuts were earmarks or programs that couldn’t spend the funds, anyway. These so-called cuts were really legislative sleights-of-hand that probably would have happened regardless.”

The point is, these politicians are holding up government process and grandstanding, but are deathly afraid of retribution (from voters or lobbyists, I’m not sure) if they actually cut someone’s favorite program substantially.

As I said in October in Demand a Balanced Budget When You Vote, voters need to tell their elected representative they will put them back in office if they cut the budget.

Let your voice be heard!

Kimberly

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