The Super Committee failed to come to a bipartisan deficit reduction deal this week. And so $1.26 billion of automatic budget cuts are happening instead. Well,in reality it is more like $984 billion – the rest is just reduced interest payments.
Republicans have dutifully vowed to oppose defence spending cuts. Democrats in Congress want to restore domestic spending. And Obama, anxious to look like a tough deficit-cutter, is threatening to veto any changes to the automatic cuts.
The idea that the defence cuts are “draconian” is nonsense. An 11 per cent cut by 2013 sounds like a lot, until you realise it would take defence spending down to 2007 levels. And by “levels” we don’t mean the actual dollar amount we spent in 2007. The actual dollar amount will be higher. The percentage of the GDP and budget will be about the same.
On the domestic side, Medicare, Medicaid, Social Security, veterans benefits and unemployment benefits are all spared by automatic cuts. Those are really the big drivers of spending.
As Ezra Klein pointed out earlier this year, it is actually pretty easy to see what our federal government spends money on: mostly insurance and guns.
There is a persistent myth in Washington that all we have to do is cut from that dark blue part. The persistent myth in the minds of average Americans is that big parts of this pie-chart are made up of foreign-aid to countries that hate us, and frivolous pork-barrel projects like Harry Reid’s cowboy poetry festivals.
No such luck. It turns out that the big-drivers of government spending are military expenditures, and extremely popular domestic insurance programs.
The reason that the Supercommittee failed to find other cuts than the “automatic ones” is simple: Congress is congenitally terrified to cut spending. Most of the actual spending is extremely popular.
If Congress want to cut the actual dollar amounts the U.S. government spends, they would have to start hacking not just a military spending and “Head Start” school programs but also the politically sacrosanct Medicare, Medicaid , and Social Security.
UPDATE 11:25AM : Readers are asking me about taxes. Yes, tax-hikes are almost as unpopular as spending cuts. And most Republicans have pre-emptively signed away their judgment on this. Republicans have also argued to their constituents that tax raises are a spending-permission slip, rather than a way of easing the nation’s debt burden.
Republicans are also slightly haunted by previous debt-negotiations where they conceded to raise taxes, but spending continued to grow.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.