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Federal budget deal is $38.5 billion

House Speaker John Boehner (R-OH) announces that a deal has been reached on the federal budget in the U.S. Capitol on April 8, 2011 in Washington D.C.

Kai Ryssdal: One can imagine a scene in the United State Capitol building late last Friday night that goes something like this: Everybody's tired. They're hungry. They're sick of looking at each other. They just want to go home. And they've got a budget deal in principle. So they say to each other, 'Listen, whaddya think -- let's just announce there won't be a government shutdown and figure out the details later.'

Funny thing is, that's pretty much the way it played out. The deal was cut, everybody went home, and now the government's running on yet another temporary extension -- this one good until Thursday night, when the House and Senate are supposed to finalize this year's budget. So staffers are working overtime on the details of that 'figure out the details later' part.

Our Washington bureau chief John Dimsdale has more on where that $38.5 billion worth of cuts is likely to come from.


John Dimsdale: Big cuts are coming this year -- $13 billion worth -- in labor, education and health care. The health reform program to set up state insurance cooperatives will be cut in half. Foreign aid takes a hit; so will highway construction projects.

Although, Steve Ellis at Taxpayers for Common Sense says most of those projects are "orphan earmarks" and are easy to get rid of.

Steve Ellis: Things that were earmarked for projects even sometimes more than a decade ago, that they can't spend the money. Either the sponsor doesn't want it anymore because it's too expensive or the underlying facts have changed and so that's about $685 million they're able to rescind right off the top.

It's also fairly easy to slash $1.5 billion worth of high-speed rail grants since some states didn't want them anyway. Farm crop insurance is also on the chopping block. Andy Laperriere, who follows the budget for the International Strategy and Investment Group, says negotiators are trying to spread the pain.

Andy Laperriere: It looks like there's a wide variety of programs that are taking small hits rather than a few programs bearing the brunt of it.

Military spending increases will be slowed by the budget compromise. The whole deal could fall through when it comes to the House and Senate floors later this week. But, in the end, Laperriere expects rank-and-file lawmakers to back up their leaders.

Laperriere: It's also a pretty high threshold for one side to be seen as walking away from the deal at this point. That's going to be a very difficult thing to explain. 'We have this deal, why are you trying to get out of it?'

In Washington, I'm John Dimsdale for Marketplace.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.

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