Budget Breakdown: Ask the expert

Apr 13, 2011

President Obama's speech on debt reduction is on Wednesday. Budget expert Stan Collender answered your questions about what the federal budget looks like far and what areas are likely to take cut.

Hi, everyone.  This should be fun.  All questions are welcome, especially if, instead of spending, taxes, and the deficit you want to talk about why the Red Sox are 2-9.  And, yes, I'm a Yankees fan.

What does the Defense Department proposed budget look like right now, and what areas are potentially most vulnerable should Congress insist in making cuts to the Defense Departmet?

The president supposedly will announce some additional reductions in military spending when he speaks at 130 today.  I've heard $150 billion over the next 10 years.  The fastest savings come from reductions in personnel, but that's unlikely given the overall unemployment rate.  Operations and maintenance is where the savings are likely to come from.

Does the President understand the gravity of the deficit?

Certainly.  You should ask that question about the others involved in the debate as well.

I have to laugh that the GOP thinks that introducing the Balanced Budget Amendment is a great idea. Please guys, if the enabling legislation doesn't say "if the budget is out of balance, here's the tax hikes that will be made along with double the spending cuts" don't even bother.

I have two mock movie posters on my wall in my office that make fun of the last two times the BBA was considered.  It's almost always a symbolic effort designed to score political points rather than make a serious change in the budget outlook.  Even if it was passed by Congress...which is extremely doubtful...it would have to be adopted by the states and that would take years.  In the meantime, nothing would happen on the deficit in Washington.  And that's just the tip of the story about why it's a bad idea.

I'm looking for a super simple explanation of the budget breakdown--What's been cut? What's not? What about the contentious issues like abortion and the environment?

The Washington Post published a good breakdown yesterday that you shoudl check.

It appears that the administration actually negotiated a better deal than its supporters want to admit.

Why can't our politicians and we the American people take a look at our social security statements and realize that we (the working force) are NOT being taxed enough (or contributing enough) towards the cost of medicare? I encourage all readers to take a look at your own SSN statements.

Medicare is one of the toughest budget issues of all, on a par with taxes for the intensity of feelings.  All polls...including those of just tea party people, show that close to 60 to 70 percent of Americans feel that Medicare should be left alone or increased rather than decreased.

This actually points out something that has gotten lost in all the harsh words over the past few months.  While the GOP keeps saying that Americans want smaller government, the polls show that what they really want is the same or more government that costs less.  I wrote about this on my blog, capitalgainsandgames.com.  Take a look.

Why do we even have a debt ceiling? If a law increases spending, the debt goes up. If a law decreases revenues, the debt goes up. The debt ceiling just acknowledges that fact.

You're being rational.  Cut it out.

How much influence will the Tea Party caucus have on budget issues during the months ahead?

The answer is "a lot" but perhaps not as much as many people assumed.  The tea party clear pushed the debate over the past few weeks to the right.  But when they voted against the 3-week extension of the CR a month or so ago (and now apparently will be voting against this deal) they forced Speaker Boehner to work with the Democrats to get the required votes.  That pushed the deal back to the center and gave the Dems influence they would not have otherwise had.  If the tea part would take half a loaf, they'd change the world.

I don't care about government debt. I care about people needing help right now, about roads, about libraries, about soaring and out of control health care costs....clean water, parks, etc. Why is the whole debt thing important?

Apparently, neither do financial markets.  Demand for Treasuries remains high and, other than rhetoric, there's no sign that will change any time soon.  There's obviously got to be a balance between borrowing to deal with current problems and avoiding future problems by reducing borrowing when you can.

Given this country's current political environment, couldn't the President pull the proverbial rabbit from a bipartisan hat by adopting all DRC's recommendations?

The Bowles-Simpson plan was VERY controversial.  It was easy to get bi-partisan support when it was clear that the plan would not get the required 14 votes to move the proposal along.  The fact that both House Budget Committee Chairman Paul Ryan and House Ways and Means Committee Chairman Dave Camp were against the plan in the commission makes me think that partisan issues would doom it to fail like most other big budget initiatives.

Can you please give a breakdown of the $14 trillion debt? Is there a list of creditors and statement of how much they are owed?

There are lots of breakdowns available.  Try the Bureau of the Public Debt's website for specifics.

Which Capitol Hill politicos understand best the gravity of the deficit?

Just a few names...and remember that understanding the gravity doesn't mean that they are free in the current political environment to do much about it.

Five of the most understanding are:

Senate Budget Committee Chairman Kent Conrad

House Budget Committee Chairman Paul Ryan

Rep. Bobby Scott

Rep. David Price

House Budget Committee Ranking Democrat Chris Van Hollen

Don't take it personally if I didn't mention someone you think highly of.  There are others.

Good morning. Due to the budget debates, I've been caught in the hiring freeze and have been waiting for 6 months to start a job I was offered. Any ideas or theories on how long it will take from the budget passing (hopefully) on Thursday to when the agencies have the go-ahead to bring people on? Will they even bring people one knowing that a bigger fight is coming up for 2012? Thanks.

I understand your frustration and wish I had good news for you.  Each agency will handle the situation differently do there's no way to know how fast your particular situation will resolve itself.

You shoudl know that this same situation is being played out in lots of other ways.  Many procurements are being delayed or cancelled because of the uncertainty.

Unfortunately, this is not going away any time soon.  My prediction is that we'll be facing another shutdown possibility in September.

How did concerns about increased debt affect the Yankees' inability to land Roy Halladay?

My guess is that it wasn't much of a concern at all.  Thanks for asking.

I wish we had lots more time.

One final commercial: For daily information on what's happening on the budget, please check out my blog.

Talk to you all soon.  Please pray for Derek Jeter.

In This Chat
Stan Collender
Stan Collender, a partner in the Washington, D.C. office of Qorvis Communications, is one of the leading experts on the federal budget and congressional budget process. He writes the very popular column, “Fiscal Fitness,” which is published weekly by the Capital Hill newspaper Roll Call. Between 1997 and 2007 Stan wrote a weekly column “Budget Battles for nationaljournal.com. He is also the author of The Guide to the Federal Budget, which was one of the most assigned texts on the subject during the 19 years when an annual edition was published. In 2009, The Wall Street Journal named Stan’s blog, “Capital Gains and Games,” as one of the top 25 economic blogs in the United States.
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