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Something's got to give to trim deficit
From left, Senate Budget Committee Chairman Kent Conrad (D-N.D.) and House Budget Committee Chairman John Spratt (D-S.C.) hold the president's Fiscal Year 2010 Budget in front of the U.S. Capitol Building in Washington, D.C.
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KAI RYSSDAL: Let's do this, just to be different. Let's not concentrate on how much the government's going to spend. There'll be time enough to do that later. And we will -- because it's a whole boatload of money.
Instead, let's have a look at what is arguably the harder part of what President Obama promised to do today: Trim the nation's budget by $2 trillion over the next ten years even as he tries to get the economy going again. So clearly, something's going to have to give, right?
From Washington, Ronni Radbill reports on what that might be.
RONNI RADBILL: So, how does President Obama cut the deficit by $2 trillion?
PRESIDENT OBAMA: We're gonna go through our books page by page, line by line, to eliminate waste and inefficiency.
But the question is: What waste and inefficiency?
Much of the savings is expected to come from closing tax loopholes, rolling back tax cuts for the rich, and huge cuts in defense spending. The president wants to withdraw troops from Iraq and re-think expensive weapons systems.
OBAMA: We will end no-bid contracts that have wasted billions in Iraq, and end tax breaks for corporations that ship jobs overseas.
Tax journalist David Kay Johnston says choking off loopholes will save a bit of cash.
DAVID KAY JOHNSTON: We have entire industries now in the United States that earn all of their profits from hidden subsidies from the government.
More money is expected to come from slashing some education programs and some government farm subsidies.
But the biggest savings, roughly $300 billion over 10 years, will come from drastically overhauling Medicare, Medicaid and other entitlement programs.
Stan Collender, partner at Qorvis Communications, says that's Washington's biggest challenge.
STAN COLLENDER: The compromises are going to have to be pretty intense. We'll see how much political capital the president really has to make that happen. But I would bet that's going to be the toughest of all the things he's trying to do.
And Collender says much of getting this budget through will also depend on Lady Luck. No sudden crisis at home or abroad. And Congressional approval on the whole blueprint, which isn't going to come easy.
In Washington, I'm Ronni Radbill for Marketplace.
Okay guys. Quit mixing up trimming the budget and reducing the deficit. It's two different things. The budget is how much you expect to spend. The deficit is the difference between that and how much you are going to get in. So if the economy expands, more money comes in and you can have a bigger budget and still trim the deficit.
Any questions?
