Tuesday, May 17, 2011

Some Spending Cut

Remember that big spending cut bill that the Republicans demanded be passed before they held their breath and turned blue? Guess what.

It turns out the six-month spending bill Congress passed in April increased discretionary outlays through the remainder of the fiscal year by a bit over $3 billion. In other words, total direct spending will be higher by the end of September than if Congress had just set spending on autopilot for the remainder of the fiscal year back in April.

To be fair, it’s because they are forward-funding some expenditures that were going to come later under the original budget. But even counting that in, it still means that the bill that they (ahem) rammed through is going to have very little effect on the overall deficit in the remainder of the year, and once we get to the end of the fiscal year in September, all bets are off. And to have any real effect on the budget, the bill will reduce the budget by $122 billion in spending cuts… by 2021.