Wednesday, February 10, 2010

Executive Branch Budget Proposal Released

The Office of Management and Budget of the Executive Branch reveled the Whitehouse's proposed budget. The budget will be sent to Congress for revision but serves and the template for Democratic's spending proposals. The budget proposes a 3 year freeze on domestic program and then limiting domestic program growth to the rate of inflation. There would be essentially no increases in spending on domestic programs other than medicare and health. National defense continues to be the biggest spending item. National Defense will grow from $694 Billion in 2009 to $866 Billion in 2020 which is a 25% increase.

The following charts show the major budget items and their growth rates. Basically, the only major areas growing are healthcare, social security and defense.

Here is a graph of all budget categories showing essentially zero growth in the remaining domestic programs.

One of the most striking figures in the budget is continued growth of age related costs including healthcare in the budget. These include Social security, health care and Medicare. These are also the largest expenditure items in the budget. Sadly, the budget includes small long-term decreases in education, community development, natural resources and the environment. Foreign relations, agriculture and income security have zero growth over the budget period.

This graph shows the compound average growth rate (CAGR) over the 2009-2020 budget period of the different budget categories. The growth rates for commerce are affected by the TARP bailout. The growth rate for the energy department is affected by the Stimulus program(ARRA).


1. The budget will have very little direct stimulative effect for job growth outside of defense and healthcare.

2. We are spending well beyond our long-term means in national defense.


Budget Authroity -- The proposed amount to be spent in a year

Budget Outlay -- The amount planned for actual spending. Some programs have multiyear spending, so outlays are the actual money going out the door.

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