Wednesday, November 10, 2010

Obama's Debt Commission Proposes $4 Trillion Cuts

A presidential commission filled with politicians, multi-millionaires and a labor union president (SEIU) proposes $4 trillion deficit reduction over 10 years, on the eve of G20 Summit in Seoul, Korea, where just about everyone is pissed about Ben Bernanke's QE2. So, as if to appease them, the commission, on prodding from what's left of the White House economic team (actually only Tim Geithner remains) I'm sure, proudly pre-announced its plan.

And it's not what you think.

The commission proposes $4 trillion (well, actually $3.8 trillion) deficit reduction over 10 years as follows:

Discretionary spending: $1,464 billion
Mandatory spending: $733 billion
Tax reform: $751 billion
Other revenue: $210 billion
Net interest savings: $673 billion

Let's take a look at the discretionary spending reduction. The commission does suggest spending cuts in both defense and other discretionary (i.e. other government departments), $100 billion each. However, these cuts are to be phased in slowly, and it reaches $200 billion in 2015 as the total budget practically remain flat to slightly negative. After that, the budget for discretionary spending actually grows, and the so-called savings is calculated by subtracting the commission's budget from President Obama's budget request.

It is not the budget cut in a true sense. It's a spending cap. $3.8 trillion deficit reduction is not really a reduction, but simply spending less than what has been projected already, and call it a "reduction".

The "real" cuts seem to come from, hold your breath, "the small people" in increased taxes (the commission says it would be in combination with tax reform that would save money) and decreased benefits in health care and social security. Retirement age would be raised to 68. (Hear that, France?)

It's the modus operandi of the parasi... uh....ruling class: Take it from the least organized, least aware, easiest target who doesn't even know it is targeted, and may even welcome being targeted.

As the commission members are tasked with the important task of coming up with a debt reduction plan, you would think they volunteer their time for the good of the country paying for their own limos and gourmet lunches. Well, it has $500,000 budget, which by now may be totally depleted. (They were running out of money in early June.) Members receive transportation allowance and per diem.

Who's paying them? Us.

BTW, just so you remember, the federal government DOES NOT HAVE A BUDGET for this fiscal year. All it has is Nancy Pelosi's "fake budget". No one in the government seem to have any problem spending, starting at the top who's somewhere in Asia now.

And in case you missed, the first month of the fiscal year had a deficit of $140 billion. Less than October 2009, thanks to increased tax receipts from individuals, while corporate tax receipts were negative.


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