Pelosi's $1.12 Trillion "Fake Budget" Passed

Spain 1-Paraguay 0.

Oh and just so you know, the House passed a $1.12 trillion fake budget for 2011 before they went off to their Fourth of July merriment. It was attached to the war funding bill that they passed on Thursday.

Well, it's not really a "fake" and it is not really a "budget". It is called the "budget enforcement resolution" (H.RES.1493), a 6-page document that only says:

New discretionary budget authority, $1,121 trillion.
Discretionary outlays, $1,314 trillion.
New mandatory budget authority, $765,584 million.
Mandatory outlays, $755,502 million.

Just so you know, the total size of the 2010 budget is $3.552 trillion, with $1.171 trillion deficit spending:

Receipts, $2.381 trillion
Mandatory outlays, $2.184 trillion
Discretionary outlays, $1.368 trillion

This "fake budget" has the "sense", which is nothing but the opinion expressed with no law-making power. But first, the House tells us of the 5 "findings" (in rough translation, my comments in [italic]):

1. Legislations were passed that will reduce deficits (Pay As You Go, defence acquisition system reform, health care);

2. Strengthening the economy and creating jobs are critical to reducing the long-term deficit;

3. A stronger economy will come from investing in education, including retaining quality teachers [so, put 2 and 3 together, we strengthen our economy by creating and retaining positions for teachers, in public schools most likely - i.e. public union workers];

4. Discretionary budget authority is lower than what President requested, so it is deficit reduction;

5. We have to spend on our military so that we can defend our country. We need upgraded weaponry for the 21st century. [No intention of reducing anything here. I wonder whatever happened to "anti-war" democrats.]

Then the 5 "sense" (i.e. just the thought of Democrats except for 38 who voted against it):

1. Federal budget to balance in 2015 [no they are not kidding], except for the interest payment on the debt [$164 billion in 2010 or 4.6% of budget outlays, but it is only the interest payment on the debt held by the public. Interest expense on intergovernmental debt holdings is NOT included, and is larger.];

2. The debt-to-GDP ratio should be stabilized at an acceptable level once the economy recovers [Of course no mention of what constitutes an "acceptable" level. For Pelosi, the ratio stabilizing at 110% may be totally acceptable];

3. Committee chairs to submit findings by September 15 for reducing the government waste and mismanagement [just about everything, isn't it?];

4. Before the current Congress adjourns, any recommendation by the National Commission on Fiscal Responsibility and Reform [a commission created by Obama's executive order made up of select member of Congress and industry executives - more on this curious commission in later post] should be voted for;

5. Deficit reduction achieved by enactment of deficit reduction legislation should not be used to offset the cost of future legislation.

Mind you, it is just the opinion, nothing binding. They can say whatever they want without any consequence, and they sure do. They are not going to have a budget until this presidential commission submit the recommendations in December.

Even as a mere opinion, the "sense" #1 is just hilarious. To balance the budget, they would somehow find $1 trillion in new receipts or cuts in outlays or both. I can't imagine either Dems or Republicans actually cutting the discretionary spending (money spent by the Executive Branch). The cuts would most likely come from the mandatory spending - Medicare/Medicaid ($695 billion), Social Security ($743 billion). I'm sure they would want to work on the new receipts - increasing income tax, introducing VAT.

All they know how to is to squeeze taxpaying 'small people' with no political clout.

The fiscal 2011 starts in October, the mid-term election in November.

Here's the article by Jane Hamsher at Firedoglake.com (progressive blog site) titled "22 Things You Probably Didn’t Know About Nancy Pelosi’s Fake Budget ‘n Bombs Bill". (I can't say they are thrilled with the Democratic leadership.)

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