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What's the local impact of federal spending and revenue decisions?
Spotlight on Military Spendingand Massachusetts
Federal Budget Priorities:
What's at Stake?
“I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”
Grover Norquist
February
Early Spring
LateSpring
Historically, the first Monday of every February, the President sends a proposed budget plan to Congress.
The FY2012 budget was released on February 14, 2011.
Congress carries out a series of evaluations ultimately passing a budget resolution.
Congressional Subcommittees ‘Markup’ Appropriation Bills.
Budget Process
LateSpring
Early Fall
Sept. 30th
The House & Senate vote onAppropriation Bills andreconcile differences.
President signs the bill approvedby Congress and the Senate, and
the budget is enacted.
Budget Process
What does this really mean?What does this really mean?
CongressionalBudget
Resolution
12Appropriators:
House &Senate
AgricultureCommerce,Justice &Science
DefenseEnergy &
WaterFinancialServices
HomelandSecurity
Interior &Environment
Labor, HHS &EducationFY 2012
HHS = $885.8B
LegislativeBranch
MilitaryConstruction &
Veterans'Affairs
State &Foreign
Operations
Transportation& Housing
& Urban Dev.
Head Start = $8.1B
MA = $124.7 M
LIHEAP = $1.98B
MA = $81.7M
TANF = $17.7B
MA = $459.4M
Flow of most federal funds and cuts
Federal Agency / Department
State Agency / Department
County, City, Town
Individual Taxpayer
What does this have to dowith you?
FY2012The Whole $3.7 Trillion Pie
Mandatory59%
Discretionary34%
Interest 6%
Mandatory Spending
Includes: Social Security, Medicaid, Medicare, Food Stamps, CHIP
Funding is need-based & non-negotiable
Discretionary Spending
Includes: Energy, Environment, Science,
Transportation, Education
Funding determined on an annual basis
FY2012Projected Revenues by Source
Borrowing 29%
Individual 31%Corporate 9%
Social Insurance 25%
FY2012The Mandatory Budget
SocialSecurity
31%
Unemployment 4%
$2.44 Trillion
Other45%
Medicare20%
The ProposedDiscretionary Budget
MilitarySpending
58%
Environment, Energy & Science 6%
Transportation 2%
Income Security & Labor 2%
International Affairs 4%
Health 5%
Housing and Community 5%
Government 6%
Food 1%
Education 6%5% Veterans' Benefits
$1.24 Trillion
www.NationalPriorities.org
Key Aspects of2012 “Security” Spending
$553 billion for Pentagon base budget
$118 billion for war
$19.3 billion for nuclear weapons
$7.8 billion for “misc.”
$6.6 billion in military aid to “foreign” nations
What about veterans and homeland security?
How Much Since 9/11?$7,600,000,000,000,000
Pentagon: $5.6 trillion
Wars: $1.36 trillion
Homeland Security: $636 billion
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Impact: The DiscretionaryBudget Crossroads
Domestic
Military
Budget of the U.S. Gov't, FY 2011
Recovery Act
Billions of $2010
International Affairs
Where Federal programsSchools Head Start, Title ICity Hall Infrastructure (water, transit, roads, bridges)Housing Authority Housing assistanceCommunity/Antipoverty Early childhood, economic development,
social services block grant, weatherization,LIHEAP, youth programs,food and hunger programs
State Agencies Medicare, Medicaid, TANF, SNAP, CHIP,Jobs programs
Employment agencies Unemployment benefits, job training, jobsColleges Pell grants, student loans, grants to schools
Impact: Where Federal Funds Land in Our Communities
The Budget's Story: deficits are about spending and revenue
The Budget's Story Paul Ryan's Plan
$6.2 trillion in cuts over 10 years
Cuts corporate and individual tax rates
No cuts to Pentagon
Adds $5.1 trillion to the debt through FY2021
Largely restructures entitlements
The Budget's StoryThe CPC Plan
Budget surplus of $30 billion by FY2021 v. Ryan which projects a deficit of $400 billion
Revenue increases (corporate and wealthy)
Cuts security spending; raises non-security spending
Maintains entitlement spending
The Budget's StoryThe Budget Control Act
“Security”Defense
Old Paradigm New Paradigm
Part One: $917 billion
The Budget's StoryThe Budget Control Act
Part Two
Raises debt ceiling by $900 billion instantly ($2.1 trillion total)
Creates “Super Committee”
A mandate of an additional $1.2 to $1.5 trillion in deficit reduction
Anything less than $1.2 trillion = Sequestration
The Budget's StoryThe Budget Control Act
Sequestration
If Super Committee recommends anything less than $1.2 trillion
Cuts split 50/50 between Defense and Non-Defense
Sequestration is only cuts; no revenues, no entitlement reforms
The Budget's StoryThe American Jobs Act
Obama's $4 trillion vision:
$1.2 trillion in discretionary cuts (already in process)
$1.1 trillion from draw down in Afghanistan and Iraq
$580 billion from mandatory cuts
$430 billion from saved interest payments
The Budget's StoryThe American Jobs Act
Obama's $4 trillion vision:
$1.5 trillion from increased revenue
Upper income tax cuts (2001 and 2003) expire:$866 billion
Limited deductions and exclusions for those making more than $250,000/yr.: $410 billion
Closing loopholes and eliminating special interest tax breaks: $300 billion
Military Clean Energy Healthcare Education0
10,000
20,000
30,000
The Budget's StoryMillions of Jobs at Stake
Political Economy Research Institute, 2009
Impact of $1 billion on potential job creation in select sectors
Direct JobsIndirect JobsInduced Jobs
11,600
17,100
19,600
29,100
