Dustin Siggins @ Hot Air
Last week did not offer much good news for America’s fiscal or economic futures. On Friday, the White House announced its expectation that the Fiscal Year 2012 deficit will be $1.2 trillion, the fourth fiscal year in a row with a deficit of at least one trillion dollars. Also on Friday, it was announced that the second quarter’s preliminary Gross Domestic Product growth was a tiny 1.5 percent. Meanwhile, House Republicans and Senate Democrats played chicken on the Bush tax policies. This all comes shortly after Senate Majority Leader Harry Reid’s (D-NV) unlawful decisionto not pass a federal budget for the fourth fiscal year in a row.
But in times of trouble, one can always count on Congress to pretend it’s doing something to fix the problem. Erika blogged about this yesterday, but on ThursdayPolitico reported that the House and Senate leaderships are planning on introducing a bipartisan bill that would avoid the spending part of the so-called “fiscal cliff” that will arrive on January 1, 2013. The solution? To put forth a six-month budget bill that keeps spending at levels dictated by last year’s debt ceiling deal, AKA the Budget Control Act (BCA). This deal, which “cut” $2.1 trillion from federal spending over the next ten years, never actually attempts to diminish spending, however – it merely will slow the growth of spending.
In Washington, this is a big deal, and many pundits will spend months talking about how harmful, good, or otherwise large the BCA’s spending reductions are. As we hit two months from the end of the 2012 fiscal year, some perspective:
1. The BCA will “cut” a whole 4.77% from the Congressional Budget Office’s (CBO)2012 baseline budget estimate over the next ten years. Compared to the Census-estimated median American income in 2010 of $49,445, this is a “cut” of $2,358.52 when overspending annually by over $16,000.