Monday, February 25, 2013

The truth about the sequester....

Facts:

  1. The cut, effective March 1, 2012 is $85 over 2 years.  That is $44.5 billion per year.
  2. 1/2 the cuts are for in domestic spending, 1/2 in defense spending.
  3. The federal budget for FY 2013 (actually, it is not a budget it is projected spending , as the U.S. Senate has not passed a budget since FY 2009) is $.8 trillion.
  4. $3.8 trillion is $3,800 billion
  5. So, the math looks something like this:
                  $85/2 = $44.5 billion  (we are already 1/2 way through FY 2013)
        
                  $44.5/2=$22.25 billion in domestic spending and $22.25 in defense spending
        
                  $3,800/$44.5 = 1.17% cut in spending  (or .585% in domestic, .585% defense)

Except:  The U.S. projected spending (remember, there is no budget, as the Senate has not passed one in 4 years) is expected to grow at the following rates (from the OMB-President Obama's 2013 Budget-Summary Table S4 and S5):
                 Annual rates of increase in major spending categories budgeted for the 2012-2022 period were:
      • Defense: 1.8%
      • Non-defense discretionary: 1.6%
      • Social Security: 5.8%
      • Medicare: 6.6%
      • Medicaid: 8.5%
      • Net interest: 14.2%
      • Total spending: 5.0%

The Result: Spending will actually not decrease at all.  It will simply not increase as quickly (at least for the next 2 years).

Let's put this in perspective:

1.17% x $10,000.00 = $117.00           $117.00/2 =   $58.50   (remember 1/2 in domestic, 1/2 in defense) 
1.17% x $25,000.00 = $292.50           $292.50/2 = $146.25
1.17% x $50,000.00 = $585.00           $585.00/2 = $292.50

Oh, yeah.  Don't forget we also spent $50 billion for hurricane Sandy relief.  

And let us not forget Obama's promise:
"Already, some in Congress are trying to undo these automatic spending cuts. My message to them is simple: No. I will veto any effort to get rid of those automatic spending cuts to domestic and defense spending.  There will be no easy off ramps on this one.  We need to keep the pressure up to compromise -- not turn
off the pressure."
- POTUS, Barack Hussein Obama  November 21, 2011

The video is here.  This quote comes at the 3:25 mark.  For some unknown reason I was not allowed to embed the video.  Silly, right?






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