Tag: budget

 

President-elect Barack Obama’s adminstration will inherit a $1.2 trillion budget deficit for 2009 according to the forecast by the Congressional Budget Office.

Unfortunately for the United States, despite owning more than $1 trillion of American debt, China has hinted that enough is enough. Rather than continuing to spend “as much as one-seventh of its entire economic output buying foreign debt”, Beijing now plans to pay for its own $600 billion economic stimulus plan.

China’s timing is unfortunate for the American economy, since the federal budget deficit is likely to swell past $2 trillion in 2009 when Congress passes a further economic stimulus measure. The CBO forecast also does not include the ongoing spending for the occupations of Iraq and Afghanistan.

Where is Obama going to find the money to restart the U.S. economy?

Original article, by Bill Van Auken, via World Socialist Web Site:

As the Bush administration and Congress continued negotiations Monday on a trillion-dollar bailout package for Wall Street, Democratic presidential candidate Senator Barack Obama delivered a speech in Green Bay, Wisconsin in which he promised to carry out sweeping cuts in government spending and impose strict fiscal discipline on the US government.

“The nation is on an unsustainable fiscal course.”

That is the prognosis of Peter Orszag, the director of the nonpartisan Congressional Budget Office, which he gave in a press briefing coinciding with the release of a CBO report today on The Budget and Economic Outlook: An Update.

The Congressional Budget Office (CBO) estimates that the deficit for 2008 will be substantially higher than it was in 2007, rising from $161 billion last year to $407 billion this year.

The CBO’s report was written before the government announcd the takeover of Fannie Mae and Freddie Mac, so the impact of the cost of their bailout — a cost of up to $100 billion each — was not factored into the report.

The budget deficit projection gets worse.  

Note: This essay is crossposted from BlueRage and was first published before the actual presentation of the budget to Congress.  We’ve had some time to see what it contains and we’ve already heard that it is pretty much DOA.  It’s a lame-duck’s final quack with nothing for anyone.  The issue, “guns or butter,” is not going away and will only heat up as crunch time for the budget approaches this summer.  So..The Post:

It’s time to show our “support for the troops.”  The guns or butter debate will heat up in Congress over the budget for next year.  It seems that in order to support our 600 BILLION dollar defense budget, we face cuts in so-called “entitlements.”  The choice will become clear that we at home, through cuts in the social services that support US, will be asked to sacrifice so that our military will continue to be the biggest, baddest, and most expensive in the world. American Progress reports:

Since that surge is working so well, I guess we’re just going to have to keep surging. Forever. According to The Hill:

This year’s battle over Iraq war funding officially kicked off Wednesday as Defense Secretary Robert Gates reluctantly offered a price tag for the first time: $170 billion for fiscal 2009.

Speaking at a Senate Armed Services Committee hearing, Gates only gave the number after Chairman Carl Levin (D-Mich.) pressed him, but rejected his own estimate right off the bat, calling it a number that “will inevitably be wrong, and perhaps significantly so.”

“I will be giving you precision without accuracy,” warned Gates.

Levin insisted that he give his best estimate for next year’s war-funding needs.

“Well, a straight-line projection, Mr. Chairman, of our current expenditures would probably put the full-year cost, in a strictly arithmetic approach, at about $170 billion,” Gates responded.

Of course, Gates made clear that the number could be wrong; and I’m guessing he didn’t mean wrong as in an overestimate. But the Administration is very conscious of the drain on our federal budget. Not the drain from the war, mind you, the other drain. On Monday, the Washington Post reported that Bush wants to do something about it. Like slash and burn. You know- the low priority stuff.

President Bush plans to unveil a $2.5 trillion budget today eliminating dozens of politically sensitive domestic programs, including funding for education, environmental protection and business development, while proposing significant increases for the military and international spending, according to White House documents.

Overall, discretionary spending other than defense and homeland security would fall by nearly 1 percent, the first time in many years that funding for the major part of the budget controlled by Congress would actually go down in real terms, according to officials with access to the budget. The cuts are scattered across a wide swath of the government, affecting a cross-section of constituents, from migrant workers to train passengers to local police departments, according to officials who read portions of the documents to The Washington Post.

And one very important person is already on board.

Sen. John McCain (R-Ariz.) said on ABC’s “This Week.” “I hope we in Congress will have the courage to support it.”

When you hear “we need to increase military spending to support the troops” what do you think of?

Money going for body armor, armored vehicles, assault rifles and sidearms, helicopters, uniforms, various forms of advanced training?

All of us want to make sure our men and women in uniform have the tools they need to protect themselves and succeed in the missions they’re sent on. But what about when hundreds of billions of our hard-earned tax dollars go to something like Future Combat Systems?:

The Army’s mammoth Future Combat Systems push is “arguably the most complex” modernization project the Defense Department has ever pursued, according to the Government Accountability Office’s Paul Francis.  

So complex, in fact, that the Army figured it couldn’t pull off FCS by itself.  The service just didn’t have the know-how to manage something as big, as ambitious as remaking just about everything in its inventory — tanks, artillery, drones, you name it — and then building a brand new, absolutely titanic operating system and set of wireless networks, to tie it all together.  Forget a traditional defense contract; the Army needed an industrial partner, instead — some company that could watch over the zillions of moving parts needed to make FCS work. Eventually, the service settled on Boeing as that partner, or “Lead Systems Integrator,” in Pentagonese.

At first, it sounded like a good idea.  But the result was that the contractor basically wound up policing itself, and the military wound up spending lots of its time playing nice with its new partner – rather than cracking the whip.

The outcome has been less than impressive.  In 2003, when the LSI contract officially kicked off, Future Combat was meant to be a $92 billion effort; today, that figures stands at $200 billion, minimum — and maybe more than $230..

The idea was to modernize the Army – to create a new, faster, lighter, more high-tech fighting force for the 21st century. But that’s not how it’s turned out: