Discretionary spending is a small portion

“Non-military discretionary spending increased 24 percent,” a Republican congressman said on the news tonight.

Most of us think of discretionary spending as money our kids spend on candy, movies and other such unnecessary extravagances. Mandatory spending puts gas in the tank so we can get to work. It buys food, and medical care, and pays the rent or mortgage.

To the federal government, “mandatory spending,” refers to entitlement programs, such as Social Security and Medicare, veterans’ benefits, food stamps, education and health programs.

“Discretionary spending” includes “defense” (not necessarily “all” all military-related spending), security, agricultural subsidies, education, health programs, highway construction and housing assistance.

What is interesting is within the discretionary category, defense spending is the greater part. In Fiscal Year 2010, which ended Sept. 30, 2010, defense spending accounted for $689 billion, while all those other things cost $677 billion. That put the portion of defense spending that actually appears on the books at just over 50 percent of the discretionary budget.

The CBO has estimated that portion will increase to 58 percent in FY2011 — maybe more if Congress is successful at cutting more than the $61 billion the House already has cut from from food to poor people, family planning and the new health care plan.

It turns out non-military discretionary spending, in spite of the alleged 24 percent increase touted by Republicans and the Tea Party, actually is a relatively small portion of the federal fiscal pie.

Changing sides

I’m pretty easily amazed, I guess, about political shenanigans.

Republicans usually portray themselves as supporters of Small Business. They often and loudly proclaim Small Business as the Engine of the Economy. But propping up Big Business often is OK, on the premise that if Big Business has money to work with, it will expand and hire more workers. Small Business benefits because so many SB companies provide services and part for BB.

Then came the 2007 Recession. Democrats said money would be well spent to prevent bankrupting businesses which were “too big to fail” — business such as CitiBank and General Motors. Republicans screamed in excruciating pain. Too much money was being handed out to the rich, to the detriment of the national deficit.

Then came the Dems with an idea to extend a tax break to the middle class (low income citizens don’t pay taxes because they don’t earn enough money). Suddenly Republicans have a different view of handout for the rich, and made granting it a condition of offering a helping hand to their out-of-work lower-income constituents.

The way this works is unemployed job-seekers get money from the government, which they use to pay their mortgage, put food into their children’s bellies, and, if there’s any left, buy Christmas presents for the aforementioned kids.

That money trickles up to the landlords, mortgage companies, grocery chain owners and Walmart.

Who, because of the way the deal went down, will continue not paying as much taxes as they were a decade ago while many of those who were employed and paying taxes a decade ago are spending money from coffers those who have the money are refusing to replenish.

A helping hand, it seems, only helps the helper. For everyone else, it’s government waste.

Just a thought

Republican leaders say The American People want tax cuts. Alcoholics want booze, and diabetics want candy, too. Children would eat cake and skip breakfast.

Outgo without income

It looks like tax cuts for the folks with all the money to get unemployment assistance for the folks who have lost the jobs the folks with the money have eliminated.

“Many of the jobs that are created are created by people who have money,” Senate Minority Whip Jon Kyl, R-Ariz. told Bob Schieffer Sunday morning.

“Nobody’s talking about tax cuts,” he said. “We’re talking about extending those rates that have been in effect for the last decade.”

He said “the recipe would include at least an extension of unemployment benefits for those who are unemployed and an extension of all of the tax rates for all Americans for some period of time.”

Senate Majority Whip Dick Durbin, D-Ill. pointed out “the Bush economic policies,” which include the tax cuts Republicans want to extend, have “cost us 15 million jobs (and) utterly failed.”

But he agreed the tax cuts likely will be extended in order to get the unemployment assistance before Christmas..

“We’re moving in that direction,” he said.

Jobs “produce wealth, the government taxes that wealth,” Kyl said, repeatedly defining as a tax increase what Democrats refer to as expiration of temporary tax cuts.

Government taxes wealth, it seems, but not if it is held by the wealthy.

Compromise is a wonderful thing. It’s what negotiating is all about, but a major Obama campaign tenet was removing the tax break on those earning more than $250,000.

The Republican line about the health care bill keeps echoing, when the GOP repeatedly accused the Democrat majority of “shoving it down our throats.”

The only shoving being done is by Republicans, and Democrats are willingly holding their mouths wide open.

For want of $700B

Both sides agree: allowing the Bush-era temporary tax cuts to expire on schedule for folks raking in more than $250,000 a year would be worth, over the next decade, about $3.7 trillion to the government.

To the folks with the money, that’s taking $3.7T out of private hands and giving it to the government.

To the folks without the money, it’s extending unemployment benefits for the people laid off from the jobs they had working for the folks making more than $250,000 a year.

Just what can be purchased with the money? It’s a little tricky digging up realistic comparison.

$700 billion is a pretty well-used number. It is less than two years worth of the $3.7T “tax increase.”

$700 billion is how much We the People gave the banks that were “too big to fail.”

$700 billion is about how much current estimates say extending unemployment benefits would cost.

$700 billion is the value of civil rights for gays and lesbians who are risking their lives in a war while the rest of us prepare for Christmas gift giving, which those with the money say they will not consider until we promise to let them keep the cash.

$700 billion is the ransom placed on the START (STrategic Arms Reduction Treaty), a piece of paper signed by the U.S. and the Russian Federation in April whereby both sides agree to cut back their nuclear arsenal, and each side agrees to allow the other side to verify the other side is living up to the agreement.

Give us our $700 billion, those who have it say, and we will discuss DADT and START and the national economy and jobs and all those other subjects which are of lesser importance than us keeping out money.

And maybe that is the point of those seemingly astronomical numbers.

If those whose income exceeds $250,000 a year – which includes most, if not all 535 members of the House and Senate – are not allowed to lock in their “temporary” tax break, they will essentially shut down government until they officially take control in January.

 

The $700B deficit

It’s interesting logic that says because a tax cut has been in effect 10 years, it has became not a temporary break but the new basis for entitlement, for which its expiration constitutes a tax increase.

It is also interesting listening to Democrats say that extending the tax cut for wealthy Americans (which the Democrats want) would add $700 billion to the national deficit, and Republicans say that extending unemployment (which the Democrats want) would add $700 billion to the national deficit.

Clearly, then, unemployment benefits for those at the bottom of the food chain could be paid for by returning the tax rate on those at the top.

Those at the top claim that to expire their tax break would hurt job creation, but the truth is jobs only are created when consumers — many of whom are currently out of work and out of unemployment benefits — have money to purchase products and services businesses have to sell.

Which means, if we extend unemployment benefits to those at the bottom of the food chain, the money they then have to spend will filter to those sellers at the top of the food chain, who then demand to be allowed to avoid paying taxes on their profits.