Budget News Feb. 7 - 11

---

News
FRIDAY
House GOP Leaders Bow to Call for More Cuts
House Appropriations Committee Chairman Hal Rogers of Kentucky said that he would rewrite a government-wide spending bill to cut an additional $26 billion. The bill had already been drafted to roll back this year's spending by $35 billion below 2010 levels.
Obama's cuts: Real deal or dud?
What's unclear is how far his fiscal plan will go in taming U.S. debt.
Obama's Pentagon cuts not what they seem
In fact, Obama's expected 2012 request of $553 billion would be 5% higher than what the Defense Department plans to spend this year. In inflation-adjusted dollars, this figure is higher than at any time during the Bush years or during the Cold War.
Gulf Between House, Senate on CR Continues to Grow
The GOP-controlled House and Democratic-controlled Senate were already far apart when House appropriators last week proposed a plan to cut $73.6 billion compared to Obama’s fiscal 2011 request, including a $58 billion drop from Obama’s nonsecurity spending request and a $15.6 billion reduction in security spending.
States Plan for Decline in Federal Assistance
Both President Barack Obama and House Republicans are moving to rein in federal spending by reducing aid to states and cities, which would deepen their fiscal woes just as economic-stimulus funds from Washington are drying up.

THURSDAY
Pentagon Seeks to Reduce Number of Contractors, Doesn't Know How Many It Has
Former Sen. Alan Simpson, co-chairman of President Obama's deficit reduction commission, said over the weekend that the Pentagon should be able to cut 250,000 contractors based on estimates that the Pentagon employs between 250,000 and 1 million contractors.
GOP leaders propose billions in cuts to Obama's budget request
Programs traditionally favored by Republicans would not escape unscathed. The list includes significant reductions in agriculture programs, which benefit many GOP districts.
EXCLUSIVE: White House to Cut Energy Assistance for the Poor
It's the biggest domestic spending cut disclosed so far, and one that will likely generate the most heat from the president's traditional political allies.
Obama Budget Will Include $10.7 Billion for Emergency Networks, Internet
President Barack Obama’s budget will include $10.7 billion to build a nationwide wireless network for emergency workers and $5 billion to help Americans get mobile access to high-speed Internet service.
Budget Becomes a Front Line in Fight Over Policy
The biggest and most immediate battle will be over funding for the Environmental Protection Agency’s new program to control the greenhouse gases that cause climate change.

WEDNESDAY
National debt: A pop quiz
It's the interest on the national debt, according to the Congressional Budget Office.
House GOP Proposes Cuts to Scores of Sacred Cows
...the partial list details 70 proposed cuts as part of a House GOP proposal to fund the federal government through the rest of the fiscal year.
Texas Governor Offers Optimism on Budget Shortfall
To be sure, Texas fared better than many other states during the recent recession, but sales tax revenues were badly hurt as people curbed spending.
Congress May Resurrect ‘Tough Medicine’ Deficit Plan
Just how willing Congress and the administration are to slash spending during a halting economic recovery will become apparent in the next few months.
Obama budget promises cuts, more spending
He also has promised to review the corporate tax structure with an eye toward reducing the current rates, and is expected to ask for an additional $8 billion to expand the nation's high-speed rail service.

TUESDAY
The federal budget's tortured path
Obama's proposal, however, is only the first step in a convoluted process that involves no less than 40 congressional committees, 24 subcommittees, countless hearings and a number of floor votes in the House and Senate.
Fla. governor proposes $5 billion in spending cuts
Plan would cut taxes while overhauling the state's Medicaid program and pension system.

MONDAY
House Republicans slash agencies, nick themselves
A new GOP proposal would reduce domestic agencies' spending by 9 percent on average through September, when the current budget year ends.
Governors Chop Spending
Politicians in Both Parties Aim to Balance State Budgets Through Cuts, Not Taxes.
For Bernanke, there's no escaping politics now
Comments on debt ceiling have now thrust central bank into the debate.
Capital Crunch
The capital city [of Pennsylvania] owes $288 million on a troubled municipal incinerator that was supposed to pay for itself but became a sinkhole of patronage and cost overruns instead.
Scores' of cuts in Obama budget
Obama is set to submit his fiscal 2012 budget proposal to Congress a week from Monday, kicking off a months-long debate and negotiation with Congress over how to tame federal deficits.
Entitlement Programs Eyed in Deficit-Reduction Effort
Alarmed by the prospect of a long-term government debt crisis, members of both parties are weighing the political risks of joining a new Senate-led deficit reduction effort that could involve changing entitlement programs.
Simpson: Leaving Entitlements on Auto Pilot Will Crush the U.S. Economy
Simpson has been a rare -- if not, distinctive -- voice in the effort to include entitlements and defense spending in talks on reducing the size of the annual budget and decreasing the nation's $14 trillion-plus debt.
House conservatives ready to cut
Republicans are planning a freewheeling, open-ended debate that promises to test the party’s limits on how far it’s willing to go on spending cuts, and it may divide Democrats between those who want to embrace modest cuts and those who want to protect domestic programs from the GOP ax.

Economist Comments
FRIDAY
Cutting Spending to Revive Federalism
The GOP needs a larger vision to guide their reforms. Republicans need to communicate to the public how a smaller government would benefit America and what federal agencies and activities are damaging and counterproductive.
The Time for Spending Cuts Is Now
The White House argues that 'draconian' cuts will derail the economy. In fact, cuts are necessary to preserve tax rates that are compatible with economic growth.

THURSDAY
Put the Federal Reserve on a budget
For a real-world example of reform, we can look to New Zealand, which in 1989 put its central bank on a fixed annual budget for five years.
MILLOY: Defund the EPA
Economic recovery depends on stopping greenhouse regs.
Jerry Brown, a Modern Sisyphus
So in truth, the state’s problems involve a larger “California philosophy” that is relatively new in its history, one that now curbs production but not consumption, and worries more about passing laws than about how to pay for them.
$382 Billion for a Slightly Better Fighter Plane?
The combined Air Force, Navy and Marine Joint Strike Fighter program, which is at least three years behind schedule and significantly over its original budget, is currently slated to cost $382 billion for 2,456 aircraft by 2035.

WEDNESDAY
No Real Opposition to $26M Pension Program
The figure comes from Congressional Research Service data that tracked payments to 455 former members as of October 2009.
Republicans vs. Republicans: When are federal budget cuts too deep?
House Republican leadership wants to rein in the federal budget by $32 billion from current spending levels. But some of the rank-and-file want $100 billion in cuts – or more.
Rhode Island: A Fiscal Mess Few Care About
It has the third highest level of public employee unionization in the country, 64 percent, behind New York and Connecticut.
Republicans Are Weak on Farm Subsidies
Farm income for 2010 exceeded $92.5 billion. That's a 34 percent increase from 2009, and — even if you subtract payments from the government — 28.8 percent above the previous ten-year average.

TUESDAY
How to Balance the Budget Without Raising Taxes or Cutting Essential Services
There's a 19 percent solution to our debt and deficit problems.
Obama’s Spending Cuts Use Scalpel Where Ax Is Needed
The debt monster will not be slain by pruning a fingernail here and an eyelash there but by aiming straight at its heart: excessive, immoral, unconstitutional spending.
Paying the Price for Government Spending
It's bad enough no one in Washington can seem to get on the same page about spending— Democrat or Republican—but the fact that they are hampering bold efforts of governors to make the tough choices with this Obamacare mandate is just unfair.
The First $58 Billion
Returning to 2008 can be “draconian” only if the past two years were extravagant.

MONDAY
A Modest $500 Billion Proposal
My spending cuts would keep 85% of government funding and not touch Social Security or Medicare.
LAMBRO: Budget attention deficit disorder
President’s overspending portends permanent red ink.
The $100 Billion Question
For some Republicans, even Paul Ryan's cuts aren't enough.

Blogs
FRIDAY
Timeline of Tardiness
INFOGRAPHIC: Washington’s budget process revealed
The Backdoor Bailouts
...it seems to me that the press secretary is glossing over the fact that the first part of the plan—suspension of interest payments—is a bailout.
Federal Budget Cheat Sheet
Here’s a budget cheat sheet, to put things in context and aggregate what we already know.
Dilma Announces Spending Cuts in Brazil
Despite good intentions, that is still a very timid effort in curbing the size of government in Brazil: Total government spending (including state and local levels) runs at almost 40% of GDP.
New Jersey’s debt downgraded – some thoughts
There is no disagreement in NJ as to whether there’s a problem. The disagreements are over size and approach.
Slashing Popular Programs Contest
Coming down the pike are dozens of stories about how policymakers are planning deep, vicious, and inhumane cuts that will undermine the foundations of the republic. A 5 percent cut to a program that has risen 50 percent in recent years will not be a simple “trim,” but a brutal, gouging “slash.”

THURSDAY
Obama's "tough budget cuts" in pictures
Finally, the president has proposed "tough budget cuts" that total $775 million. No, that's not a joke.
State and Municipal Debt: The Coming Crisis?
The main area of agreement: Medicaid and health care costs are big costs drivers in budgets.
Q&A: Ken Rogoff Says Crises Are Like Heart Attacks, Predicting Timing Is Tough
The U.S., of course, is on an unsustainable path of its own. We have only, perhaps, five to ten years to make a significant correction in our fiscal policies. But the timing of crises is very difficult to call.
Entitlement Politics, Again
Whether entitlements stay on cruise control is not really the question in dispute, since they are going to do so regardless of what the House budget resolution says.

WEDNESDAY
OMB Director Lew on the New Budget
Considering that the president proposed total spending of $3.8 trillion last year, $20 billion in gross cuts was an insignificant gesture to say the least.

TUESDAY
Pro-Growth Rules That Won’t Grow The Deficit
...tax consumption rather than income. Consumption taxes lead to more favorable treatment of capital accumulation, they are more supportive of innovation, and unlike income taxation, they do not punish saving.
Spotlight on the States: New York
...Cuomo (D) recently proposed a budget meant to close much of that gap. His budget proposal – $132.9 billion in total – eliminates the 2011-2012 $10 billion deficit and reduces the 4 year budget gap from $64.6 billion to $9.2 billion.

MONDAY
The Debt Limit Debate
Notice Geithner's mixing of debt obligations and other expenditures. On car payments and student loan and credit card payments, Geithner is right. But on insurance premiums and utility payments, he's wrong.
If Debt Hits the Ceiling, Make Interest Top Priority
Very simply, once the debt limit is reached, spending is limited by revenues and would be guided by prioritization of the government’s obligations.

Reports
THURSDAY
Setting Priorities for Transportation Spending in FY 2011 and FY 2012
Both programs will be reduced by 17 percent compared to FY 2010 levels, and to an average of 9 percent for all discretionary programs.
Debt reduction without default?
This paper proposes a two-step, market-based approach to debt reduction…

TUESDAY
Responsible Approaches to Increasing the Debt Limit
The federal debt is currently $14.100 trillion, only $194 billion away from the current debt ceiling of $14.294 trillion.

MONDAY
Stimulus Facts
Data for First Quarter of Fiscal Year 2011.