Budget Buster

Now the devil's always in the details when it comes to federal budgets, but if this Reuters article is serious, we're in tremendous trouble.

Following a meeting Tuesday evening of House Democratic leaders, House Budget Committee Chairman John Spratt said: "The administration has told me they are going to have a very strict and tight budget this year and that there will be provisions made in it to reduce the deficits in the out years. What form that's going to take, I do not know."

The White House "has to write a budget that meets two very different goals," said Tom Kahn, chief of staff of the House Budget Committee. "One is keeping the recovery going, the other is making long-term improvements to the deficit."

White House budget officials last year asked domestic government agencies to prepare two budgets: one reflecting current funding levels and one with a decrease of 5 percent.

One budget expert predicted that Obama's final proposal will fall in that range.

"My understanding is somewhere between zero and minus five," said Stan Collender, who has worked for both the House and Senate budget committees.

One congressional staffer shared Collender's assessment, though others cautioned it remained unclear what the White House would do.

Any spending cuts would probably not apply to the Defense Department or entitlement programs like Social Security and Medicare.

Let that sink in. McCain's people were up front saying that we needed a five-year spending freeze in an economy that was grinding to a halt.  I laughed at the Republicans then.  Now some in the Obama administration are seriously entertaining the notion of as much as a 5% across the board cut in domestic spending during a jobless recovery where the recovery part is only an illusion provided by the stimulus program from last February.  Once again, the Obama administration is coming to the table here expecting domestic spending cuts.

Republicans will no doubt demand hundreds of billions, if not trillions more sliced from the budget on top of this.  The result will be catastrophic.  States are already tapped out.  They can't make up the difference in any way.  We're going to see California-style budget butchering across the country for sure.

"We are so very, very screwed" is what immediately comes to mind.  All a 5% cut is going to do is ensure a double-dip recession becomes a full-blown depression, kids.

Look at your paycheck.  Do you really think the problem right now is the federal deficit?