Trump’s budget

6629080867_016b010de5_zPresident Trump released his proposed budget.  It boosts defense spending, Veterans’ benefits, school choice, and homeland security.  But it dramatically slashes the State Department and the Environmental Protection Agency.

It cuts most agency’s appropriations and eliminates some of them completely.  See the list of agencies and programs that Trump’s budget would eliminate entirely.

Among the entities that would be zeroed out are the Corporation for Public Broadcasting, the National Endowment for the Humanities, and the National Endowment for the Arts.

You can read the entire budget proposal here.

Congress, including its Republican members, are criticizing the “draconian” cuts.

Those Republicans have been talking for years about the need to cut the budget and to pare back all of the things our government has become involved with, at great expense.  And yet this is the first Republican budget I can recall that actually made those changes.

Let me comment on one sacred cow that is being sacrificed:  the National Endowment for the Arts.  Some are saying, if the NEA ceases to exist, the arts will be doomed!  But the arts thrived before the NBA got started under the Johnson administration.  In fact, the arts were surely more interesting and even more experimental and controversial back then–think of surrealism, abstract expressionism, pop art, and you name the movement–when artists were competing for audiences rather than federal grants. [Read more…]

Budget deal gives White House everything it wanted

The House of Representatives, which controls the nation’s purse strings, is dominated by Republicans.  But they just agreed to a budget deal that includes $680 billion in new spending and special-interest tax cuts.  The White House is claiming total victory.  The deal gives the Obama administration what it wanted on Obamacare, immigration, and the environment.  Planned Parenthood will keep its government funding.  Pretty much the only thing Republicans got in return was an end to the ban on oil exports.  Rush Limbaugh is calling for the Republican Party to be disbanded. See this for details.

UPDATE:  The House adopted the budget.

UPDATE:  So has the Senate, and the President has signed it.  Look, this budget does some good things, like give more money to the military, including giving troops a raise.  But it’s a return to the old deficit spending, reversing the budget reforms (for example, the agreement to balance new spending by making cuts elsewhere) of a few years ago.

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Where your tax dollars go

The Heritage Foundation has an interesting report entitled  The Breakdown of Where Your Tax Dollars Go.  After the jump, an informative graphic. [Read more…]

Republicans are now playing nice on the budget

Republicans in Congress tried to cut the deficit by letting the government shut down, being willing to dive over the fiscal cliff, and sequestering expenditures, but those measures didn’t go over very well politically.  So now Congressional Republicans are going along with the Democrats, and they are close to an agreement on a budget deal.   Is that good news or bad news? [Read more…]

Leaks in the federal budget

Feds spend at least $890,000 on fees for empty accounts – The Washington Post.  (Every time the federal government sets up a grant, it opens an account.  When the grant money is spent, the account can’t be closed, according to government rules, until a full accounting of the program has been made.  That takes time and money.  So some 13,712 accounts with no money in them still exist, at the cost of $65 per year.)

The IRS paid $11 billion in faulty Earned Income Tax Credits last year.  (Not because taxpayers did anything wrong but because the rules for the EITC are so complicated that IRS officials calculated them incorrectly.)

In $75 billion program to prevent mortgage defaults, 46% of participants are defaulting.

Maxed out

As of yesterday, the federal government is officially maxed out on the  great national credit card.  We reached our credit limit of $14.294 trillion.   Government accountants think they can keep the bills paid using accounting tricks until August 2.   In the meantime, Congress needs to raise the debt ceiling.  Otherwise, the government could go into default.

Usually, raising the debt ceiling was more or less automatic, like passing resolutions celebrating Flag Day, but this time fiscal conservatives in Congress are threatening to keep that from happening unless the current administration agrees to major expenditure cuts.

Should Congress up the limit?  If it doesn’t, a default would surely be devastating for the economy, sending the dollar, government bonds, and foreign investment into a nosedive.  Would it be worth that to make a statement about out-of-control budget deficits?