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Getting the Deficit to $0.00
www.fms.treas.gov ^ | 1/8/11 | vanity

Posted on 01/08/2011 12:59:34 AM PST by MontaniSemperLiberi

As part of an effort to figure out what the Republican House SHOULD be doing now, I’ve looked up our current budget (or at least the one that was proposed) and figured out what could be eliminated to get the deficit down to $0.

Here is our revenue

Budget

Estimates

Classification

Full Fiscal Year

Budget Receipts

1,031,926

Individual Income Taxes

Corporation Income Taxes

280,396

Social Insurance and Retirement Receipts:

Employment and General Retirement (Off-Budget)

661,919

Employment and General Retirement (On-Budget)

195,771

Unemployment Insurance

54,422

Other Retirement

4,276

Excise Taxes

75,799

Estate and Gift Taxes

25,076

Customs Duties

26,632

Miscellaneous Receipts

89,508

Allowances

-20,000

Total Receipts

2,425,725

(On-Budget)

1,763,806

(Off-Budget)

661,919

The budget goal / magic number is $2.425 Trillion ($2,425,725,000,000.00 for those of you in Rio Linda)

Here are our outlays.

Budget

Estimates

Classification

Full Fiscal Year

Budget Outlays

Legislative Branch

5,599

Judicial Branch

7,512

Department of Agriculture

144,490

Department of Commerce

11,768

Department of Defense-Military

723,703

Department of Education

101,692

Department of Energy

45,143

Department of Health and Human Services

926,236

Department of Homeland Security

56,366

Department of Housing and Urban Development

51,219

Department of the Interior

14,382

Department of Justice

32,381

Department of Labor

109,288

Department of State

29,309

Department of Transportation

86,280

Department of the Treasury:

Interest on Treasury Debt Securities (Gross)

464,706

Other

94,921

Department of Veterans Affairs

134,106

Corps of Engineers

11,540

Other Defense Civil Programs

54,862

Environmental Protection Agency

11,541

Executive Office of the President

500

General Services Administration

2,279

International Assistance Program

24,659

National Aeronautics and Space Administration

18,732

National Science Foundation

8,374

Office of Personnel Management

73,676

Small Business Administration

1,465

Social Security Administration

789,034

Other Independent Agencies

47,226

Allowances

37,483

Undistributed Offsetting Receipts:

Interest

-188,784

Other

-89,768

Total Outlays

3,841,920

(On-Budget)

3,259,207

(Off-Budget)

582,713

Surplus (+) or Deficit (-)

-1,416,195

(On-Budget)

-1,495,401

(Off-Budget)

79,206

The starting point is $3.841 Trillion (Again, 3,841,920,000,000.00 for those of you in Rio Linda)

( http://www.fms.treas.gov/mts/mts1110.pdf , table 4)

So the need is to cut the budget by (1 – 2.425 / 3.841 ) x 100% = 36.8%

First, there is only one item that can’t be cut, interest payments on the national debt. If anyone you know says "Hey, maybe we should default on our debt", get a real big stick and beat them into the ground. A judge will rule that self-defense. Interest gets funded 100%, which works out to $464.7 Billion. That means the rest of the budget has to be cut by 49.0%.

Tier 1 Programs and Funding Levels

These are constitutional level functions plus Social Security and Medicare/Medicaid. I couldn’t bring myself to zero those last two out as there are some seasoned citizens that really do need the money to live.

Budget

Montani's

Estimates

Funding

Full Fiscal Year

Level

Department of Justice

32,381

90%

Judicial Branch

7,512

80%

Department of Defense-Military

723,703

80%

Social Security Administration

789,034

80%

Department of Health and Human Services

926,236

70%

Department of Veterans Affairs

134,106

70%

Legislative Branch

5,599

50%

Executive Office of the President

500

50%

General Services Administration

2,279

50%

Office of Personnel Management

73,676

50%

Department of State

29,309

40%

One could find larger cuts in Defense, I suspect.

Teir 2 Programs and Funding Levels

These are programs/departments where we do need some funding, i.e. keeping DOE nuclear labs from going hot, etc.

Budget

Montani's

Estimates

Funding

Full Fiscal Year

Level

Other Independent Agencies

47,226

30%

Department of Energy

45,143

20%

Department of Homeland Security

56,366

20%

Department of the Interior

14,382

20%

Department of Transportation

86,280

20%

Corps of Engineers

11,540

20%

Other Defense Civil Programs

54,862

20%

Environmental Protection Agency

11,541

20%

International Assistance Program

24,659

20%

Department of Agriculture

144,490

10%

National Aeronautics and Space Administration

18,732

10%

National Science Foundation

8,374

10%

Some of these funding levels were bumped up from zero after I took a hard look at Tier 1, cut a bit more and added a few billion to the Tier 2 programs. Someone might ask "Why not zero out International Assistance" and I say that if I can bribe President Achmed to turn on Militia leader Moamed then that’s a lot of savings out of the Defense budget.

Tier 3 programs and Funding Levels

These departments are eliminated. At best, some can get rolled into other departments like NIST for instance (we really do need a weights and measures agency) but that comes at the expense of whatever funding is available in those departments.

Budget

Montani's

Estimates

Funding

Full Fiscal Year

Level

Department of Commerce

11,768

0%

Department of Education

101,692

0%

Department of Housing and Urban Development

51,219

0%

Department of Labor

109,288

0%

Small Business Administration

1,465

0%

That gets us down to a 12 billion surplus!

 

That’s it. That’s my best guess. Feel free to copy these numbers into your spreadsheet and come up with your own funding levels. You will be well armed to inform the next congressman who says, "We can cut $100 billion this year!" that that is a proverbial fart in the wind as far as Federal spending goes.


TOPICS: Chit/Chat; Miscellaneous
KEYWORDS: deficit; doa; doe; federalbudget
Take a shot. I thought it might be worth a vanity.
1 posted on 01/08/2011 12:59:34 AM PST by MontaniSemperLiberi
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To: MontaniSemperLiberi

Thanks.

On first read I don’t know the real end point, but at least some courageous soul has taken a first step to sift the govt. pubs and put out a framework that helps understanding.

Drilling down into the detail will give more clarity to the % reductions.


2 posted on 01/08/2011 2:10:06 AM PST by plangent
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To: plangent

The Republicans need to have a zero-deficit budget in their pocket.

Then they can negotiate on how to get from here to there.

One reason this is necessary is because claims that they will refuse to raise the debt ceiling unless a deal is struck on the budget will not be taken seriously by the administration unless the Republicans show they are ready to make the move if necessary.

This is standard negotiating tactics. You can’t beat something with nothing.


3 posted on 01/08/2011 3:39:05 AM PST by cgbg (No bailouts for New York and California. Let them eat debt.)
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To: plangent

The Republicans need to have a zero-deficit budget in their pocket.

Then they can negotiate on how to get from here to there.

One reason this is necessary is because claims that they will refuse to raise the debt ceiling unless a deal is struck on the budget will not be taken seriously by the administration unless the Republicans show they are ready to make the move if necessary.

This is standard negotiating tactics. You can’t beat something with nothing.


4 posted on 01/08/2011 3:40:52 AM PST by cgbg (No bailouts for New York and California. Let them eat debt.)
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To: cgbg

Sorry for the double post.

One approach would be to defer interest payments for a few years until the budget is under control.

That should be part of any serious budget cutting proposal.

While critics will howl that this will increase interest rates—that will encourage DC to cut faster and harder—a good thing.


5 posted on 01/08/2011 3:44:26 AM PST by cgbg (No bailouts for New York and California. Let them eat debt.)
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To: cgbg
One approach would be to defer interest payments for a few years until the budget is under control.

Dangerous move.
If interest rates spike before the deficits are brought to zero it all may collapse.
I read somewhere that if the interest rates go to 11% at the current debt level then it doesn't take all that long before all revenue will have to go to pay just the interest.
What's scary is that 11% isn't all that unimaginable.

Frankly, if the House doesn't do something much more aggressive than the 100B cut in the budget then it all will eventually collapse. 100B isn't a serious response to deficit spending in the Trillion range.

6 posted on 01/08/2011 4:19:32 AM PST by Politically Correct (A member of the rabble in good standing)
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To: MontaniSemperLiberi

up4later


7 posted on 01/08/2011 4:36:00 AM PST by harpu ( "...it's better to be hated for who you are than loved for someone you're not!")
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To: MontaniSemperLiberi

Good stuff, but you haven’t gone far enough. The $12 billion “surplus” would need to be applied to paying down our debt. We can’t just keep paying the interest, we actually need to pay down $14 trillion in debt and $12 billion is a drop in a huge bucket. Even if we could find $500 billion a year to pay off the debt it would take us over a quarter of a century to pay off the debt. What are the chances of staying on the kind of budget that cuts spending far more drastically than what you’re showing for 28 years? It is inevitable that we are going to collapse under this debt, default on the debt, or have blood in the streets over the severe austerity required to come up with $500 billion per year. Decades of criminally insane spending has brought us here and it will be our children and grandchildren who will suffer the catastrophic consequences of it. This makes me so sick about the future of our country that I want to throw up.


8 posted on 01/08/2011 5:15:38 AM PST by Spiff
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To: Politically Correct

FWIW, Greece is at 12.6

So yes, thanks to Obama, the door to bankruptcy has been opened.

They really need to get the inflation rate and the deficit under the year to year growth. With revenues around 3 and spending at 4.5, they would have to cut spending down to around 3.3 trillion. They need to cut about 1.2 trillion or so to get the deficit under control.


9 posted on 01/08/2011 6:09:39 AM PST by BenKenobi (Rush speaks! I hear, I obey)
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To: MontaniSemperLiberi
The GOP has a golden moment and window of opportunity to force government to living within its means. What's not being taken into consideration is the benefits to the economy of proof positive that we are determined to stop the madness of spending two and three times what we bring in.

Across the boards cuts sufficient to bring the budget into balance in a year or two would be hard, even disastrous, on many parts of our society and economy. But the total collapse of the house of cards that our budgeting process has become will be even worse.

An honest, good-faith, move toward ending the madness would result in a much stronger economy and therefore rising revenues.

10 posted on 01/08/2011 6:31:02 AM PST by jwparkerjr (It's the Constitution, Stupid!)
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To: cgbg

Exactly where I am.

We need to get down to $0.00. That’s our end goal.

My timeline to do so is very, very short, i.e. September 2011. Why? Because our Debt to GDP ratio is now 100% (14T in debt, 14T in GDP) and that’s the point most countries default and there ain’t no country that can save us like they saved Greece.

So that gets us into brinksmanship. I posted the Federal Cash Flow situation this weekend http://www.freerepublic.com/focus/f-chat/2653239/posts It ain’t pretty but it is what it is.

Baring a plan to get the deficit down to $0.00, I’m thinking of going Gault. I’ll pull all my cash out of my 401k, convert it to metal and wait for the end times.


11 posted on 01/08/2011 8:37:30 AM PST by MontaniSemperLiberi (Moutaineers are Always Free)
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To: cgbg

Let me get my big stick.

Our interest payments are estimated to be $464.7Billion with the interest rate at 2.5%. This is historically low. If interest rates go up to something on the high side, say 7.5%, that interest payment goes up by a factor of 3 to $1,394.1 Billion.

That difference means the end of our defense budget, Medicare/Medicaid or Social Security.

We have to pay off our interest payments.


12 posted on 01/08/2011 8:44:04 AM PST by MontaniSemperLiberi (Moutaineers are Always Free)
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To: Spiff

Agree 100%. Even to the sick to stomach point. It really is sad, isn’t it?

Frankly I doubt we have the will to do it. Paul Ryan’s statement that he will have trouble finding $100billion in cuts because we are already 1/2 way into the fiscal year is a joke. What a clown.


13 posted on 01/08/2011 8:49:41 AM PST by MontaniSemperLiberi (Moutaineers are Always Free)
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To: MontaniSemperLiberi

I don’t think it’s quite that bad yet. There are plenty of other jurisdictions that are in worse shape than America, so there are plenty of investment dollars that are going to get dumped into the dollar as a flight towards safety.


14 posted on 01/08/2011 8:51:07 AM PST by BenKenobi (Rush speaks! I hear, I obey)
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To: BenKenobi

You’re arguing based on transients rather than fundamentals. Yes there is a certain amount of pull to the US. Note however that the foundation has been laid to get off of US currency. Sure it’s small now but the WB has just issued it’s first bond in yuan.

HONG KONG (AP) — The World Bank is issuing its first bonds denominated in China’s yuan in Hong Kong, joining a growing number of borrowers tapping the new debt market as Beijing gradually promotes its tightly controlled currency abroad.

They are setting up the mechanisms and getting over the initial learning curve. When confidence in the US is lost there will be a great sucking sound towards China.

It makes you wonder why we even have a Navy. If China can ruin us now, what good is a F-35B?


15 posted on 01/08/2011 9:18:50 AM PST by MontaniSemperLiberi (Moutaineers are Always Free)
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To: MontaniSemperLiberi

I’m watching the Euro and the Yen. When both start falling out against the dollar (as in EU being 80 cents on the dollar), then it will be time to worry about the US.

Fiscal problems will crop up there first, and spread to the US, not the other way around.


16 posted on 01/08/2011 12:41:25 PM PST by BenKenobi (Rush speaks! I hear, I obey)
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To: MontaniSemperLiberi

Good comment about Ryan.

Incremental thinking is what got us into this mess.

It will take radical thinking to get us out of it—if we can get out of it.

Waiting for other countries to fail first, waiting for somebody else to do something, that is incremental thinking.
It dosen’t work well when you have flown off the cliff and are halfway down.

You need to reach for the ledge even if it breaks some limbs if you are successful.

(Defaulting on the interest is reaching for the ledge—it is a binding commitment for a future balanced budget—with a 460B a year kick-start towards your goal.)


17 posted on 01/09/2011 7:01:17 AM PST by cgbg (No bailouts for New York and California. Let them eat debt.)
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