Paul Ryan

The Only Budget Numbers Worth Talking About are 3.5, 3.6, and 3.9

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Mercatus.org

The GOP House has released its budget plan. Go here to read and download the latest version of The Path to Prosperity, authored by Rep. Paul Ryan's crew.

The most important number in any given federal budget document is the amount it proposes to spend in the coming fiscal year (typically this is done in Summary Table 1 in a budget document). The government can't control revenue (collected taxes) and it certainly can't control the ultimate size of the economy (GDP) or predict how much the government will be spending 10 years down the road (it typically undercounts that amount). The one thing it can actually lay on the table is a single number on the spending side for the coming year.

The GOP budget for fiscal year 2014, which starts on October 1, 2013, proposes spending a total of $3.5 trillion, which is roughly what we're on track to spend this year. The latest Congressional Budget Office Budget and Economic Outlook document, released in February, says the feds will spend $3.6 trillion in 2014 (the CBO is required to run numbers based on existing laws). President Obama's budget plan for last year assumed we'd spend $3.9 trillion in 2014. He will release his budget plan in early April and it is highly unlikely he will suggest spending more than $3.9 trillion. Indeed, the feds will end up spending about $200 billion less in 2013 than he suggested in last year's plan.

Febreze

The Senate Democrats, who have spent the better part of the last four years not even producing a budget much less passing one, are supposed to release their budget plan as early as tomorrow. It's likely that the proposal will be within the range set out by the three documents already in circulation. So we can anticipate a budget battle that will focus on whether we spend between $3.5 trillion and $3.9 trillion in 2014. That's not a small difference, by any stretch, but it's also far smaller than the varying amounts that the three plans project for 10 years out. The GOP plan says the feds will spend $5 trillion in 2023, the CBO figures $5.9 trillion, and Obama projects $5.8 trillion (for 2022; all figures are in current dollars).

The GOP plan assumes that Obamacare will not take place, which is highly unlikely (however desirable that might be). It is unclear about defense spending, the largest part of the discretionary budget, other than to say that defense—apparently including money for war on terror-related operations—will get $560 billion in 2014 and "over $6 trillion to defend our nation" over the coming decade. While it proposes reducing the top marginal income tax rate to 25 percent, it assumes no changes in tax revenue vis a vis current policy. The budget plan doesn't talk about changing Social Security (both Congress and the president are asked to submit reform plans for consideration) and its major proposed fix for Medicare—"premium-support" and the choice between competing private plans and traditional Medicare—only starts in 2024. If offering a choice makes sense in 2024, you've got to wonder why it doesn't make sense in 2014.

All of that sort of stuff is very interesting and certainly it's worth thinking about the differences in underlying philosophy that would create a variance of almost $1 trillion a year in 2023. But as we await the Senate's plan—the veritable Chinese Democracy or Detox of budget documents!—and the president's, the only real question is whether we're going to basically keep spending constant, as we've done for the past three years (see chart above). More than anything else, that would Barack Obama's presidential term as truly historic. Or are we going to goose it up by as much as $400 billion a year? And if the latter, what in the world could that possibly be spent on that would pass the least-demanding smell test?

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  1. Another reminder that Junior Bush uncorked a big ass bottle of fiscal insanity.

    1. Thank God Pelosi and Reid put the cork back in in 2007 and onward!

      1. The thought of those two “putting the cork in” makes me gag.

      2. Hands were tied, they were filibustered through those years. No super majority.

        1. Somehow, the juxtaposition of “hands were tied” with Pelosi and Reid “putting the cork in” doesn’t really help.

        2. Filibustered into passing large spending increases? By whom?

    2. Look at the graph again…and wonder why 2009 is blamed on Bush when it was Obama who signed 800 billion in stimulus.

  2. So they will all compromise and spend the shit out of every dollar they can grasp. No restructuring, no reform.

    1. Every dollar they can steal
      Every dollar they can borrow
      Every dollar they can print
      Every dollar they can mint

      It’s really depressing to read comments on sites such as Slate. They really do firmly believe that you can just print the money you need to fund whatever you want, and get the rest from “rich people”. Contradict them, and they insist that since we are fiscally soverign, we can never have too much debt! Worst case, we will just bring on hyper inflation and the debt will vanish! Even better, the wealth wiped out by this will all belong to rich people!

      We’ve raised a generation to believe that Government owes them a certain standard of living, and that the only thing keeping us all from having everything we want is the greed of those horrible, evil rich people.

      1. the irony is that by inflating the currency we kick the poor in the balls even harder, giving the liberals more excuse to revile on the wealthy and inflate even more. The system works.

        1. never mind that the mechanism of inflation is throwing wads of money at the wealthy and politically connected.

        2. the irony is that by inflating the currency we kick the poor in the balls even harder, giving the liberals more excuse to revile on the wealthy and inflate even more.

          The proverbial self licking ice cream cone.

  3. What the heck is wrong with President Obama? $3.9 trillion is chump change. How many hundreds of thousands of children are going to go hungry or go without pre-school or dental care? How many single mothers are going to have to work instead of taking care of their numerous kids? And old folks barely getting by on social security?
    And crumbling bridges and need for more public transportation?
    America’s needs are endless and these guys promised there is no consequence to deficit spending. No heart and in thrall to the evil corporations. Impeach Obama and let’s get a real redistributionist socialist in there!!

    1. Pre-dental care! Why should America’s children wait to have teeth before they see a dentist every week?

      1. Pre-natal pre-dental care!

        1. Why not just go jerk off at the Dentist’s office?

          1. Epi only stopped when Highlights got rid of their centerfold.

            1. Now I have to go to the pediatrician’s office.

            2. I’ll tell you what, this Goofus fella is a dumbass.

          2. Tim, you must have the same dental assistant who bends over me twice a year.

            1. Wait, what? Your dental hygenist is bending you over?

      2. Post-dental care! Why should only those who still have teeth get dental care? It’s cradle-to-GRAVE, not cradle to the retirement home!

        Damn greedy rich people, refusing to turn their money over to the government so that they can spend it on what I want!

      3. True story: I was required by the state to take a child with no teeth to see a dentist.

        1. So what you are admitting is that you knocked out all the teeth in some kid’s head?

        2. Do you live here?

  4. I’m sorry but assuming Obama is going to sign legislation that repeals Obamacare is fucking retarded.

    1. No one ever said Ryan was a smart guy. Well, I can think of a few, but you know…

    2. This isn’t about writing a bill that Obama will sign. It’s about laying out the GOP’s starting point for a negotiation that will go nowhere. (Or at least will go nowhere good.)

      1. It’s about laying out the GOP’s starting point for a negotiation that will go nowhere.

        That’s a bingo.

        I’m less than concerned over the specifics of the individual proposal / result than I am with seeing the GOP stick to their guns (not bloody likely, but still hoping) on one key thrust Ryan is making:

        Under our proposal, the government spends no more than it collects in revenue?or 19.1% of gross domestic product each year.

        Regardless of how they get there, in the current environment that would be the best possible outcome imo.

        1. If they mean that, then they should make a rule that says that each year’s budget must be less than the tax receipts of the previous year.

  5. So why was spending at $2.7 trillion in 2006 and in 2012 it was a trillion dollars more? Where did that extra trillion of spending come from?

    1. The poor. It all went to the poor. That is why there is no more poverty.

    2. 600m more.

      Anyways, I am sure health care costs from all the vets coming back home have a little part to play in it. They were warning about the expenses of the aftermath of these wars before they even begun.

      1. You mean foreseeable outcomes are foreseeable?

        1. The worse a foreseeable outcome is, the harder it is to look at.

    3. The reason we’re spending so much more than in 2007 is because the Continuing Resolutions (CRs) have locked in what should have been one-time-only stimulus spending. The reason we aren’t spending even more than that is that Congress has been unable to agree on a budget other than the CRs.

      It’s complicated. You wouldn’t understand. Just let the Top. Men. continue to serve you.

    4. Where did that extra trillion of spending come from?

      Everywhere.

      Wiki Numbers (apologies for poor formatting):

      2007 2012 Change % Change
      Social Security $586.10 $778.57 $192.47 32.84%
      Defense (excl Wars) $548.80 $716.30 $167.50 30.52%
      Wars $115.00 $115.00 $- 0.00%
      Medicare $394.50 $484.49 $89.99 22.81%
      Unemp & Welfare $294.00 $579.58 $285.58 97.14%
      Medicaid and other Health $276.40 $361.63 $85.23 30.84%
      Interest $243.70 $224.78 $(18.92) -7.76%
      Education $89.90 $139.21 $49.31 54.85%
      Transportation $76.90 $102.55 $25.65 33.36%
      Veterans’ Benefits $72.60 $129.61 $57.01 78.53%
      Justice $43.50 $62.02 $18.52 42.57%
      Environment $33.10 $42.83 $9.73 29.40%
      Foreign Affairs $32.50 $56.25 $23.75 73.08%
      Agriculture $27.00 $19.17 $(7.83) -29.00%
      Community Development $26.80 $31.69 $4.89 18.25%
      Science & Tech $25.00 $30.99 $5.99 23.96%
      Energy $20.50 $23.27 $2.77 13.51%
      General Administration $20.10 $31.76 $11.66 58.01%

    5. Yay, adding the stimulus to the baseline.

  6. “Senate Dem budget includes nearly $1 trillion in new taxes”

    “The $975 billion in spending cuts include $240 billion in savings from the end of the Afghanistan war and $242 billion in reduced interest payments, according to a source.”

    “The Murray budget will include $493 billion in other spending cuts, including $275 billion in health savings that do not cut entitlement benefits, a source said.”

    http://thehill.com/blogs/on-th…..z2NLi2ILoO
    Follow us: @thehill on Twitter | TheHill on Facebook

    1. Tis will be the entire narrative from the media for the next several days:

      “While Ryan’s budget would reduce the highest tax rate from 39.6 percent to 25 percent, providing a significant tax cut to the wealthiest households, Murray’s budget would raise $975 billion in tax revenue by closing corporate and individual tax loopholes.

    2. How exactly are interest payments going to be reduced? Rates can’t get much lower and we’re adding more and more debt

  7. The sad thing is, the leftist scum believe all the budget issues were caused by some tax cuts. The spending doesn’t seem to bother them.

  8. The one thing it can actually lay on the table is a single number on the spending side for the coming year.

    The GOP budget for fiscal year 2014, which starts on October 1, 2013, proposes spending a total of $3.5 trillion, which is roughly what we’re on track to spend this year.

    Which is why it has no acquaintance whatsoever with “austerity”, “fiscal responsibility”, or “balance.”

    And remember, that’s the lower bound for the negotiations. It can only get worse from there.

  9. The GOP budget for fiscal year 2014, which starts on October 1, 2013, proposes spending a total of $3.5 trillion, which is roughly what we’re on track to spend this year.

    DRACONIAN BUDGET CUTS!!!!!!11!!!

    /Harry Reid

  10. Obama was president in 2009 and he passed his 800 billion dollar stimulus in march of that year.

    Why doesn’t your graph reflect these facts?

    1. Umm, Booosh?

    2. Seriously, how hard would it be to make the bottom of the 2009 number (attributable to his budget) Booosh Red, and the top part (attributable to new spending signed by Obama) Barack Blue?

    3. Because Cosmotarians, that’s why.

  11. Maria. even though Carl`s article is something, last tuesday I bought themselves a Lotus Elise when I got my check for $6112 this – 4 weeks past and just over $10k last-month. with-out any question its my favourite-job Ive had. I began this nine months/ago and right away made more than $79 per hour. I went to this website,,
    http://jump30.com

  12. Sorry Nick, not that I think that the federal government doesn?t spend much, but the graphic in your article doesnt adjust for GDP size, which makes it of very limited value.
    Its not the same to spend a certain amount with a GDP of 1981 than in a GDP of 2012!

  13. Hyperinflation 2014! Everybody chant…

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