American Sauce: Spending and shutdown battle 101
March 28th, 2011
02:53 PM ET
11 years ago

American Sauce: Spending and shutdown battle 101

Capitol Hill (CNN) – Consider this a spending battle intervention. Congress has two weeks to come up with another spending bill or government will shut down, sending millions of federal workers home and delighting producers of Sunday talk shows.

Instead of focusing on the potential Smithsonian-closing drama, this week American Sauce offers a cut-to-the-chase map of the spending battle reality.

Congress may get its closest yet to a shutdown and we explain why, without adding exclamation marks about passport offices shuttering.

Want to cut through all the jibber jabber and get your hands around the spending battle that could shut down government? Listen to our podcast here.

Or keep reading for a few bullet points.

Gov. Shutdown and Spending Battle Truth

-The Basic Problem: Is the federal deficit and the national debt it feeds. Republicans, Democrats and economists almost universally agree it must be cut or the mounting debt will threaten fiscal stability.

-The Political Problems: There are two. 1. Democrats say it’s too soon to sling dramatic budget cuts, saying it could hurt the economy. President Obama and others want to wait until the next fiscal year (starting Oct. 1). But Republicans want deeper cuts, immediately. They argue tough measures are overdue. (See below for each party’s stance in dollars.) 2. Republicans and Democrats fundamentally disagree about what sorts of things should be cut.

-Shutdown Deadline: April 8.

That’s when the current spending bill expires.

-The Deficit Forecast Now

There are two estimates. The White-House-run Office of Management and Budget forecasts this year’s (fiscal 2011) deficit will be $1.65 Trillion. The Congressional Budget Office puts it at $1.4 Trillion.

Spending Cuts So Far: $10B.

These came in the two most recent temporary spending bills passed by Congress. Those cuts included some of the political low-hanging fruit: programs which President Obama had already put on the chopping block and billions in unspent earmarks.

Republican Stance: $61B in immediate spending cuts.

House Republicans passed a $61B cut from last year’s spending in February. That plan died in the Senate.

-Democratic Stance: Possibly $20B (NEW!)

Congressional Democrats initially pushed for $0 in immediate spending cuts (compared to last year’s spending). They most recently agreed to the $10B in cuts passed by Congress. But Monday, our @DanaBashCNN reported from a senior Democratic source, that they are prepared to offer $20B in cuts.

-Fuzzy Math Warning

Just being cautious here, because many of you already are aware of this nice bit of fun with statistics. Democrats and Republicans both have used (and still occasionally mention) larger estimates for their proposed cuts. Republicans say they are slashing $100B, Democrats point to $41B or $50B+ in cuts. In both cases, the parties are comparing their cuts to President Obama’s proposed budget, something which never went into effect and does not have direct bearing on current spending. Our advice: ignore those figures unless you, for some reason, want to compare current proposals with a White House proposal which is no longer on the table.

-Some Perspective, Please.

How much would these cuts do to melt the deficit? The GOP’s $61B in cuts would reduce the forecast deficit by 3.7 – 4.3 percent. A potential Democratic offer of $20B in cuts would chisel 1.2 to 1.4 percent off the deficit. We won’t bother with the effect on the national debt. It’s teeny. (Though comment below if you’d like the numbers and we’ll respond.)

SO, what are the odds of a shutdown?

We won’t pretend that anyone knows for sure, but to hear the current thinking and forecast, listen to this week’s podcast here.

Follow on Twitter: @LisaDCNN

You can also listen to American Sauce on iTunes, Stitcher or subscribe to the podcast via RSS.

Filed under: American Sauce
soundoff (9 Responses)
  1. Claudia, Houston, Tx

    Boehner and the GOP aren't worth squat and their so-call "Pledge to America" was no more than a "con game" to mislead and screw the American people.

    March 28, 2011 03:07 pm at 3:07 pm |
  2. Former Republican

    Instead of taking a break every other week Congress and the Senate need to work on the budget.

    March 28, 2011 03:18 pm at 3:18 pm |
  3. Marla

    My husband is a veteran who switched over to a government service job in order to continue doing the work that he does for our government. When people think that a government shutdown would not affect too many people, they are seriously mistaken. Many government service workers do the behind-the-scenes work that our active duty members rely upon to keep them safe and supplied. And yet, these are the first people who would be denied a paycheck.
    In our case, my husband's paycheck is our only source of income. I'm disabled and can no longer teach. Since I taught in a non-union, right to work state in a district that did not pay into Social Security, I'm not eligible for disability payments, so I no longer have any income. We moved for the job, and weren't able to sell our home, so we have a mortgage in one state and rent in another. We are getting very, very tired of wondering every two weeks whether this paycheck will be the last for a while. We will be seriously concerned as to whether we will be able to buy food at the commissary if a shutdown lasts very long. This game that congress is playing is taking a very human toll!

    March 28, 2011 03:42 pm at 3:42 pm |
  4. Tall Ed

    The Republicans are doing everything they can to get us into a Double Dip Recession. I agree that the Debt needs to be addressed, but we cannot cut our way out, we have to make some cuts, but we also need to raise some taxes, like those on the super wealthy and Wall Street. Treat inheiritance as income, fix capital gains so that Hedge Fund Mangers have to pay taxes at the same level as everyone else. Fix the Corporate Income Tax so that companies cannot manipulate their books to get-out of taxes. Also don't let American Companies "Relocate" over seas to avoid taxes.

    March 28, 2011 03:49 pm at 3:49 pm |
  5. Four and The Door

    It's clear the new Republican House is having an excellent impact on federal financial management. Good job, voters! And good job Speaker Boehner! Hold your .... I mean hold OUR ground!

    March 28, 2011 04:06 pm at 4:06 pm |
  6. PalmReader

    "Congress has two weeks to come up with another spending bill or government will shut down, sending millions of federal workers home and delighting producers of Sunday talk shows."

    After which they each will once again be enjoying their monthly one week off - courtesy of John Boehner's House leadership - in which to appear at their never-ending fundraising benefits, and media roundtables. News flash: sending millions of federal workers home has been the ONLY GOPer agenda. Helps keep the unemployment numbers up, thus ensuring, and I quote Senator McTurtle (Mitch O'Connell), *a one term President Obama*. One only needs to look as far as the newly elected Republican Governors to understand the truth of this. Each and everyone of them are dutifully eliminating as many public sector jobs as can be promptly eliminated . . . thus keeping their own State unemployment numbers high. Speaks volumes as to where they each stand politically. Win at all cost. Unfortunately, and unheeded by their lack of real leadership, this *cost* comes at the expense of so many who are already suffering . . . with no end game in sight.

    March 28, 2011 04:20 pm at 4:20 pm |
  7. DemoCommunists for a Better Way - Steal the Wealth, Bankrupt America

    It is very clear at this point that the Democrats have no intention of EVER cutting spending to balance the budget. It would mean the end of their wealth redistribution scheme accomplished via the tax code. Take and take more and more from one segment of our society to give it to others that pay NOTHING into the system. Shutdown the beast and stop the eventual financial ruin of this country. If that is what it takes then so be it. Better to shut it down than to destroy it through bankruptcy.

    March 28, 2011 04:27 pm at 4:27 pm |
  8. willie floyd

    The Reps. have accomplished NOTHING since Jan. They have sat up there working on things, abortion, Planned Parenthood, repealing Healthcare, etc. They know full well the pres. will veto most if not all of these. They ran on JOBS-they want to cut job training programs-make sense?-not to me. Until Reps. look at DOD, tax breaks for the wealthy-the last poll I saw showed 61% of people wanted them eliminated-I won't believe they are serious about reducing the deficit. So, if they want to shut down the gov't.-SO BE IT! Come 2012 I hope voters realize who is responsible and will vote accordingly.
    Our pres. has done an excellent job and certainly deserves a 2nd term-whether Mitch McConnell agrees or not! I hope every Dem. and Indep. will exercise one of our most valuable rights-not like in 2010.

    March 28, 2011 04:29 pm at 4:29 pm |
  9. Wire Palladin, S. F.

    The republicans have put or economy in quicksand during the Bush republican debacle. Even now, they have refused to help get our country moving, and then there are those extreme right wingnuts who think the destruction of the middle class is good.

    March 28, 2011 04:35 pm at 4:35 pm |