July 25, 2011
Senate majority leader Harry Reid introduced a proposal today that he says would give Republicans everything they want in a debt ceiling deal. It would reduce the deficit by $2.7 trillion over 10 years, without raising taxes. But the plan was light on details of what gets cut and when. How much does the plan cut up front in 2012? Reid isn’t sure. “You know, I am not much of a numbers wonk,” Reid told THE WEEKLY STANDARD during a press conference this afternoon. “Get that from my staff, okay?”
Picture yourself as a Director on the Board of a large corporation. The company is drowning in debt and the CEO presents a figure to the Board as to how much they need to reduce their spending over the next ten years in order to survive. A Board member asks the CEO for a breakdown of the spending reductions by year and the CEO says he isn’t good with numbers and to ask his staff. Your reaction???
The White House 10-year budget for 2012-2021 is as follows (in Billions of $):
| YEAR | RECEIPTS | OUTLAYS | DEFICIT |
| 2012 | $2,627 | $3,729 | $1,101 |
| 2013 | 3,003 | 3,771 | 768 |
| 2014 | 3,333 | 3,977 | 645 |
| 2015 | 3,583 | 4,190 | 607 |
| 2016 | 3,819 | 4,468 | 649 |
| 2017 | 4,042 | 4,669 | 627 |
| 2018 | 4,257 | 4,876 | 619 |
| 2019 | 4,473 | 5,154 | 681 |
| 2020 | 4,686 | 5,422 | 735 |
| 2021 | 4,923 | 5,697 | 774 |
| TOTAL | $38,747 | $45,952 | $7,205 |
A plan to reduce the Deficit by $2.7 trillion over the next 10 years, when the above budget shows a projected deficit of $7.2 trillion over the next 10 years, means our nation’s Debt will increase by another $4.5 trillion along with an increased Interest expense outlay. You should know that long-term projections tend to be more optimistic in the out years because the folks making the predictions probably won’t be around in 10 years to defend them.
In my opinion, at some point our government must establish a balanced budget (actually better than balanced in order to gradually reduce the Debt). The difficulties in accomplishing this are mind boggling. We need to elect leaders that are determined to accomplish fiscal control and we need to be prepared for the inevitable sacrifices required by each of us. You will be impacted, so stay observant and be prepared when you’re handed the 2012 ballot.