Debt

White House To GOP: Only One Way Around Defense Cuts -- And You're Not Gonna Like It

Brian Beutler | February 6, 2012, 3:52PM

House Speaker John Boehner (R-OH), President Obama and Senate Majority Leader Harry Reid (D-NV).

In light of Congressional Republicans' abandonment of a key part of the debt limit agreement, two senior administration officials briefing reporters at the White House Monday said automatic, across the board cuts to defense programs will happen as scheduled unless Republicans relent on their refusal to raise revenues.

The officials conducted the briefing under the condition that they not be quoted directly, but their position was unambiguous -- the White House will not support any effort to swap out scheduled cuts to defense programs (and other automatic cuts) unless Congress passes a balanced package of deficit reducing legislation of equal or greater measure. That means new tax revenue from wealthy Americans and corporate interests, which Republicans have routinely refused to consider.

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Defense Spending

Bait And Switch: GOP Leaders Renege On Debt Limit Deal Defense Cuts

Brian Beutler | February 3, 2012, 5:57AM

House Speaker John Boehner with House Majority Leader Eric Cantor in the foreground.

Republican leaders in Congress have all but reneged on a key agreement they reached with the White House last summer rather than reconsider their unwavering stance against new tax revenue.

Relations between the Obama administration and the congressional GOP were already just about as bad as can be. But even so, this sets a precedent future Congresses and White Houses will remember when partisan mismatches force them to strike deals and govern.

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Defense Spending

The GOP's Plan To Avoid Defense Cuts Without Raising Taxes

Brian Beutler | February 2, 2012, 12:00PM

Senate Minority Whip Jon Kyl (R-AZ) walks from his office to a policy lunch with fellow GOP members on Capitol Hill in Washington, D.C. on September 7, 2011.

Senate Republicans unveiled a proposal Thursday to avoid or delay looming, automatic cuts to defense and security programs by reducing the federal work force by five percent and freezing federal pay for two and a half years.

In a bid to recruit Democratic support for their legislation, the authors of the plan say it saves enough money to forestall automatic cuts to domestic programs, also set to kick in on January 2013. But they continue to oppose using any new tax revenues to offset any of these costs -- and in so doing they exposed a contradiction at the heart of their fiscal policy. They oppose tax increases, they say, because of their impact on economic growth -- yet their plan to avoid tax increases involves deliberately shrinking demand for jobs.

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Defense Spending

Why Dems Think They Have A 'Sword Of Damocles' In Tax Fight

Sahil Kapur | February 2, 2012, 5:43AM

Democrats believe they finally have a cudgel strong enough to force Republicans to relent on their absolutist opposition to tax increases: the $500-$600 billion in across-the-board military spending cuts due to kick in next year as part of the self-inflicted "punishment" for Congress's inability to battle the debt with savings elsewhere. Republicans are eager to reverse course on that and shift the cuts to non-defense programs, but even top military Democrats say they won't let that happen -- unless the GOP budges on its identity-defining resistance to new taxes.

The defense cuts -- along with an additional $600 billion in reductions to domestic spending -- were part of the "sequestration" that was meant to encourage the Deficit Super Committee to strike a deal on cutting by at least $1.2 trillion over 10 years. It failed. And Republicans, after initially signing off on the cuts, now say they're unacceptable.

Not so fast, say Dems.

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Defense Spending

Top Defense Dem: GOP Must Blink First To Avoid Pentagon Cuts

Brian Beutler | January 26, 2012, 11:59AM

Despite a brewing panic among Congressional Republicans (and some Democrats) over automatic, across-the-board defense cuts set to kick in on January 1, 2013, the top Democrat on the Senate Armed Services Committee says those cuts must stand unless and until Republicans relent on their anti-tax absolutism, and agree on a balanced deficit reduction package that includes higher revenue.

"The purpose of the sequester is to force us to act to avoid the sequester," Sen. Carl Levin (D-MI) told reporters at a Christian Science Monitor roundtable. "It's like a nuclear weapon -- it's totally useless; it can't be used except to accomplish some other goal than its use. It's used to deter."

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Budget

CHART: A Hidden Source Of Budget Deficits

Brian Beutler | January 12, 2012, 12:26PM

Dmitry Rukhlenko / Shutterstock

Before Warren Buffett and Mitt Romney enter a bidding war over who will volunteer more of their millions to reduce the deficit, the government could recoup many billions of dollars every year if Congress just made it easier for the Treasury to collect what it's already owed by law.

Meet the tax gap -- the difference between taxes owed and taxes paid.

Via the Center on Budget and Policy Priorities, the IRS has found that in 2006, taxpayers shorted the government by about $385 billion -- and an additional $65 billion was paid late. Back then, the tax gap was bigger than the annual budget deficit. With the economy still suffering, that's likely not true today. But closing it even partially would take substantial pressure off of strained federal programs, which have been under constant attack by the GOP for over a year.

As you can see, the tax gap is on the order of the government's biggest expenditure categories, and dwarfs the voluntary contributions Republicans suggest wealthy liberals like Buffett should volunteer to the Treasury.

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Taxes

Switcheroo: Democrats And Republicans To Trade Places On Taxes, Spending

Brian Beutler | November 23, 2011, 6:00AM

House Speaker John Boehner (R-OH) and President Barack Obama

For at least the next several weeks, politics will undergo a strange transposition, during which Republicans will warn of the economic dangers of cutting government spending, and President Obama will barnstorm the country warning voters that Republicans are inviting a tax increase on the majority of Americans.

The timelines won't align perfectly, and the Democrats will have a greater sense of urgency. But in the wake of Super Committee failure, Democrats and Republicans are staring down uncomfortable deadlines, and each party's best bet for avoiding outcomes that harm their interests is to adopt the other's rhetoric.

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Super Committee

Super Committee Chairs Prepare To Announce Failure

Brian Beutler | November 20, 2011, 9:48PM

Rep. Jeb Hensarling (R-TX) and Sen. Patty Murray (D-WA)

Capitol Hill sources say that barring a highly unexpected, last minute development, Super Committee co-chairs Jeb Hensarling and Patty Murray will issue a statement on Monday acknowledging the panel's failure.

The development comes one day before the panel's drop dead date to submit a plan, and three days before the debt limit law requires them to report legislation to the full Congress. Failure will lock into place deep, across the board cuts to defense and security programs, a two percent cut to Medicare providers, and cuts to other domestic programs. Those spending reductions will kick in on January 1, 2013, unless Congress acts to change the law, or passes more targeted budget cuts and thus agrees to eliminate the automatic penalty.

Those cuts, along with the looming expiration of the Bush tax cuts, promise to be major flashpoints for the 2012 campaign, and lock in a tough legislative food fight over cutting spending and raising taxes.

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Super Committee

Dems Mock Latest GOP Super Committee Offer

Brian Beutler | November 18, 2011, 4:36PM

After multiple meetings Friday, Democrats publicly excoriated a fall-back offer by Super Committee Republicans to cut 10-year deficits by over $600 billion. And for the first time, Democratic members are publicly casting doubt on the panel's chances to meet its Wednesday deadline.

Partisan tempers flared over how Democrats and Republicans describe the offer, which includes a trivial amount of new tax revenue, but doesn't touch entitlement programs like Social Security and Medicare.

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Super Committee

The Brutal Politics Of Super Committee Failure

Brian Beutler | November 18, 2011, 6:10AM

Super Committee Democrats and Republicans and the leaders of both parties will work through the weekend to avoid missing their fast approaching deadline to cut $1.2 trillion from federal deficits over the next decade. Though the 12 members officially have until Wednesday to reach an agreement, the more realistic deadline is Monday evening, by which time they must have word back from CBO about the impact any plan they send to Congress will have on the budget.

Failure is very much an option. And if failure happens, Capitol Hill politics will take a severe turn heading into the 2012 election.

If November 23 comes and goes and there's no deal, Republicans will declare war on both Democrats and each other, and the most powerful interest groups in Washington will maul both parties in an effort to make sure that Super Committee failure doesn't translate into lost profits.

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Super Committee

FLASHBACK: Boehner Says He's 'Bound' By Defense Cuts In Super Committee Penalty

Brian Beutler | November 16, 2011, 11:38AM

House Speaker John Boehner (R-OH)

Republicans on the Super Committee are openly toying with the idea of reneging on the debt limit deal, which created a penalty designed to get panel members of both parties to compromise on cutting the deficit. If they actually try, though, they'll be rebuking House Speaker John Boehner, who only two weeks ago said he's obligated to follow through on his commitment.

The penalty, which will be triggered if the Committee fails, would cut hundreds of billions of dollars from both defense programs and Medicare providers. The former was designed to bring Republicans to the table, the latter, Democrats. Now even the committee's GOP co-chair is saying that if there's no agreement, he and congressional Republicans will fight to change the defense cuts -- in other words, he and others in the Republican will go back on their commitment.

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Jeb Hensarling

Top GOPer On Super Committee Says No New Revenue, Games Out Strategy If Panel Fails

Brian Beutler | November 15, 2011, 8:41PM

Rep. Jeb Hensarling (R-TX)

It's hard to see how the Super Committee can possibly reach a consensus by this time next week after Republican co-chair Jeb Hensarling's appearance on CNBC Tuesday night. The short version is that he left the ball in Democrats court, and hinted that if the committee fails, Congress will spend the next year or so trying to change the terms of an automatic penalty to make sure that hundreds of billions of cuts to defense programs never take effect.

Hensarling claimed that if the committee recommended even a dollar of new net tax revenue -- the kind of revenue Dems are demanding -- it would constitute a step in the wrong direction. He said a GOP plan put forward by Sen. Pat Toomey (R-PA) -- one which Republicans claim would raise revenues by nearly $300 billion over 10 years, but would also make the Bush tax cuts permanent -- is as far as Republicans are willing to go on revenues. But that's an offer Democrats flatly rejected as unserious. And unless one of the parties breaks cleanly with its publicly stated position, the committee will either fall well short of reducing the deficit by $1.2 trillion over 10 years as required by law, or will fail altogether.

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Super Committee

Grover Norquist And The Super Committee -- Who's Really In Charge?

Brian Beutler | November 15, 2011, 4:52PM

Grover Norquist

About a week ago, Republicans on the Super Committee offered Democrats a plan they themselves claimed would raise new tax revenues. Setting aside specifics, Democrats treated it as a crack in the dam -- the first indication the GOP's alliance with anti-tax activists was starting to crumble.

Democrats ultimately rejected it. But so too did Grover Norquist, which suggests it really did violate his pledge (which most Republicans have taken) never to raise effective tax rates. Fast forward to Monday, Norquist told The Hill, "I've talked to the House leadership and the Senate leadership. They're not going to be passing any tax increases.... If Republicans raise taxes now, they don't win the Senate, and if Republicans raise taxes now they might not keep the House."

Logically, this means one of four things:

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Super Committee

Crunch Time On Super Committee As GOP Goes Silent, Even On Tax Increases

Brian Beutler | November 14, 2011, 1:55PM

House Majority Leader Eric Cantor (R-VA)

To illustrate just how down to the wire negotiations of the deficit Super Committee have become, GOP leaders have gone entirely silent -- even on the question of higher taxes.

At his weekly Capitol briefing with reporters Monday, House Majority Leader Eric Cantor (R-VA) deftly swatted away about a dozen questions about the panel's negotiations, or the likelihood that they'll reach an agreement by the November 23 deadline set forth in the debt limit bill. The committee doesn't need outside pressure from him, he said.

This included my own question about tax increases. President Obama has pledged to veto deficit legislation that doesn't match every dollar in entitlement benefit cuts with a dollar in tax revenue taken from wealthy Americans. I asked Cantor if a Super Committee report meeting that standard could pass the Republican House. He declined to answer.

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Super Committee

Why The Super Committee Is Heading For Super Catastrophe

Brian Beutler | November 8, 2011, 5:48AM

As of Tuesday morning, betting on the Super Committee to succeed would be playing the odds.

A key member of the Senate Democratic leadership team has openly predicted the panel will gridlock and fail, and placed the blame squarely on Republicans.

As GOP committee members met privately, Maryland Rep. Chris Van Hollen -- a Democrat on the panel -- told Bloomberg, "You need to close some of these tax loopholes and you need to generate additional revenue. And so that balance is going to be important. We saw the dueling letters just last week. We had a bipartisan group in the House that said, 'Look, everything is on the table including revenues - tax revenues.' And within 24 hours you had 33 [Republican] Senators say, 'no new net tax revenues.'"

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Defense Spending

Republicans Cry Uncle On Spending ... When Cuts Hit Home

Brian Beutler | October 28, 2011, 6:00AM

It took months of fighting -- the threat of a government shutdown, the graver threat of a default on the national debt, and now a new threat of major, automatic cuts to Medicare and defense programs -- but Congress' deficit obsession has finally exposed the rarest of all species: Republican Keynesians.

With just a under a month until the deficit Super Committee must recommend policies that cut the 10 year deficit by $1.2 trillion, members of the Republican party -- the same party that's been on the war path for deep spending cuts, and that decries President Obama's "failed stimulus" -- are making uncharacteristic arguments against slashing spending. Trim too much, too quickly, they warn, and people will lose their jobs!

Call them Defense Keynesians -- GOP members who represent defense interests, veterans, service members, contractors, and others whose livelihoods would be impacted by deep cuts to defense spending. They don't want the Super Committee to cut much more, if any, from defense, and they certainly don't want to pull the so-called "trigger" which would cut defense across the board by about $600 billion starting in 2013, if the panel gridlocks.

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Flat Tax

Rick Perry's Flat Tax Plan: Not A Flat Tax

Brian Beutler | October 26, 2011, 6:00AM

Rick Perry

The flat tax is such a popular idea in conservative circles that Texas Governor Rick Perry is trying to revive his presidential primary campaign by proposing one.

Except for the flat tax part.

It turns out Perry's plan isn't flat, doesn't eliminate the current tax code, as many conservative elites claim to want, and would likely blow a huge hole in the federal budget.

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Defense Spending

Defense Budget Hawks To Super Committee: Not In My Backyard

Susan Crabtree | October 14, 2011, 5:59PM

The Republican and Democratic chairmen of the House and Senate defense committees are pleading with the deficit-reduction super committee to spare the Pentagon when it's looking for places to slash spending.

Both Rep. Buck McKeon (R-CA), who chairs the House Armed Services Committee, and Sen. Carl Levin (D-MI), who heads the Senate counterpart, sent letters to the super committee Friday urging, if not downright begging, the 12 deficit deciders not to touch the Pentagon's discretionary budget, although Levin suggested the panel propose a commission to look into finding savings in the military retirement and health care systems.

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Super Committee

McCain Says He Might Just Ignore Super Committee Defense Cuts

Brian Fung | October 13, 2011, 5:55PM

Sen. John McCain (R-AZ)

Sen. John McCain (R-AZ) says he's so committed to defense spending, he'd overturn key provisions of the debt ceiling deal to protect it.

In a Capitol press conference Thursday, McCain told reporters he'd be "among the first" to suggest ignoring any cuts to defense that would take place if the Joint Committee on Deficit Reduction (the so-called "Super Committee") fails to produce a plan by Nov. 23.

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Budget

Defense Experts Press Congress for Smart, Targeted Cuts

Brian Fung | October 1, 2011, 1:59PM

Many congressional Republicans are refusing to address defense spending as part of the bipartisan negotiations on deficit reduction, but some members of the defense community are calling for proactive and fundamental changes to the Pentagon's budget, anyway. Why? The alternative, they say -- automatic cuts should the supercommittee fail to reach a deal -- would be much worse by comparison.

Although automatic cuts would be relatively mild by historical standards in dollar terms, they would likely fall the hardest on spending categories such as procurement and military R&D, experts said in a Thursday conference at the Center for Strategic and International Studies. Immediate cuts in these programs would hinder the military's long-term competitiveness and affect the kinds of missions it could undertake in the future, they argued. They would also leave major structural problems, such as ballooning personnel costs, unaddressed.

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AFL-CIO

Trumka To Dems: Walk Away From Bad Super Committee Deal

Brian Beutler | August 25, 2011, 11:30AM

AFL-CIO President Richard Trumka

AFL-CIO President Richard Trumka said Democrats should be prepared to walk away from a bad deficit deal even if the consequence is a far-reaching penalty that would likely cost a huge number of jobs.

"They shouldn't agree to anything that's a bad deal," Trumka told reporters at a Christian Science Monitor breakfast roundtable. He warned Democrats against voting for any Super Committee plan that cuts Social Security and lets wealthy Americans off the hook by not raising their taxes. But voting no comes with consequences. If the committee gridlocks or passes a plan that fails in Congress, it will trigger $1.2 trillion in spending cuts split evenly between defense and domestic programs.

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Russ Feingold

Feingold To Press Dems To Abandon Any Unbalanced Super Committee Deal

Brian Beutler | August 23, 2011, 12:36PM

Former Sen. Russ Feingold (D-WI), June 12, 2011.

Former Sen. Russ Feingold and his new group Progressives United are petitioning the six House and Senate Democrats serving on the joint deficit Super Committee to walk away if Republicans don't budge on tax increases, and insist on cutting entitlement benefits.

"If we don't get our policy priorities, Democrats need to be ready to walk away from the deal," Feingold emailed his supporters. "You can guarantee extremists on the other side will continue to push relentlessly to give even more to corporations and put even more of the burden on the middle class. We have to fight harder than they will."

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Defense Spending

Panetta Confirms Pentagon Considering Replacing Military Retirement With 401(k) Plan

Brian Beutler | August 16, 2011, 5:03PM

Leon Panetta

In a rare joint appearance with Secretary of State Hillary Clinton at the National Defense University Tuesday, Secretary of Defense Leon Panetta confirmed a CBS News report that the Pentagon is considering a dramatic plan to overhaul the military's once sacrosanct retirement plan.

According to CBS, the plan "would eliminate the familiar system under which anyone who serves 20 years is eligible for retirement at half their salary. Instead, they'd get a 401k-style plan with government contributions."

Panetta largely confirmed the report, with a key caveat.

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Super Committee

The Stage Is Set! For Super Committee Gridlock?!

Brian Beutler | August 15, 2011, 6:05AM

Clockwise: Speaker John Boehner (R-OH), Senate Majority Leader Harry Reid (D-NV), House Minority Leader Rep. Nancy Pelosi (D-CA) and Senate Minority Leader Mitch McConnell (R-KY)

We now know who's serving on the 12-member deficit Super Committee this fall. We know who the two co-chairs will be, we know many if not all of the requirements it must meet, and we know what happens if it fails.

Which means we know the battle lines and can project with some certainty how the fight will play out.

Of the six Democrats on the committee, most if not all have publicly proclaimed they'll support certain cuts to Medicare and Medicaid -- particularly if they fall hardest on providers and not beneficiaries -- but only if Republicans are willing to accept some "meaningful" new tax revenues.

Of course, all of the six Republicans have pledged never to support tax increases, and most if not all have demonstrated extreme reluctance over raising any revenues at all, including from loophole closures that benefit extremely few privileged individuals and businesses.

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Harry Reid

Dems, GOP Demand: If You're Gonna Slash Medicare, Raise Taxes, Can You At Least Do So In Public?!

Brian Beutler | August 10, 2011, 6:00AM

Senate Majority Leader Harry Reid (D-NV) appointed three Democrats to a 12-member deficit Super Committee Tuesday, giving observers and advocates an early indication of how the committee will function as it seeks over a trillion dollars in further deficit cuts by the end of the year.

Just as important as who serves on the panel, though, is the question of whether it will function like most Congressional committees do -- open to press and voters, with conflicts of interest disclosed publicly, if not always swiftly or conveniently.

So often, high-stakes negotiations like these are conducted in private, where members feel free from accountability, and, to a lesser extent, from special interest influence. And because the debt ceiling statute that created the panel included no significant transparency requirements, the expectation has been that it will operate away from public scrutiny.

But there is growing pressure on Congressional leaders to pull back the curtain on the panel, including from influential members of their own parties. And now it seems as likely as not that the proceedings will take place in a way that makes it difficult for members to hide deal-making from the public.

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Medicare

Obama Sides With Panetta On Need To Cut Medicare Over Defense

Brian Beutler | August 8, 2011, 3:32PM

Secretary of Defense Leon Panetta

Last week, Congressional Democrats were blindsided by newly-confirmed Defense Secretary Leon Panetta, who basically nixed any further cuts to military spending, and demanded that lawmakers trim from programs like Medicare and raise taxes to reduce future deficits.

Soon a new deficit Super Committee will begin debating tax and entitlement reform, and the penalty if they gridlock includes steep defense cuts. Republicans are expected to seize on Panetta's remarks to push for another deficit deal that comes exclusively from entitlement cuts. So Rep. Barney Frank (D-MA) called on President Obama to repudiate Panetta.

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Leon Panetta

Dems Take On Panetta For Pushing Medicare, Social Security Cuts Over Defense Cuts

Brian Beutler | August 5, 2011, 4:11PM

Leon Panetta

A fight is brewing on the right, between anti-tax zealots and big military types over who takes the next hit in the continuing fight over deficits. The prospect excites progressives, who see a rare opportunity to force the GOP to slaughter one of their sacred cows, and rip the party apart in the process.

But the left is poised for a similar internal battle.

The tensions on both sides of the aisle were set in motion by the debt deal, which created a powerful, bipartisan deficit committee tasked with finding over $1 trillion in savings over the next 10 years. If it gridlocks, though, it will trigger automatic spending cuts, including about half a billion dollars from defense.

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Debt ceiling

GOP Reps Uneasy About Triggered Defense Cuts

Benjy Sarlin | August 1, 2011, 4:11PM

Emerging from a meeting with party leaders, House Republicans cited potential defense cuts as a top concern in the bipartisan debt ceiling agreement.

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Defense Spending

Senate GOP Deeply Divided on Cuts To Military

Susan Crabtree | August 1, 2011, 3:21PM

Some of the Senate's most committed hawks are parting company over the debt deal's prospects for broad defense cuts if Congress gridlocks on entitlement or tax reform.

Sen. John McCain (R-AZ) is supporting the debt deal despite its potential for severe defense cuts while his usually likeminded colleague, Sen. Lindsey Graham (R-SC) says he's a solid no in large part because of the threatened reductions in military spending.

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Debt Ceiling

The Four Big Problems With -- And Four Silver Linings Around -- The Debt Limit Deal

Brian Beutler | August 1, 2011, 11:00AM

President Barack Obama

Progressives are furious. Conservatives are somewhat less furious. And for the most part all anybody knows about the budget plan is that it cuts a lot of spending over 10 years, and includes no guarantees that anybody -- particularly the well-off -- will pay more in taxes. Thus, the anger: after huge tax cuts for the rich, two unfunded wars, and a financial crisis triggered by Wall Street greed exploded budget deficits, the people asked to narrow the gap are overwhelmingly regular folks.

All of this while the economy is still reeling. It might not be as bad as this, but there's certainly a lot missing here.

So with that background in mind, here are the four worst problems with, and four silver linings around the debt limit deal.

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Republicans

GOP Seeks To Weaken Defense Cuts In Key Part Of Debt Limit Deal

Brian Beutler | July 31, 2011, 7:02PM

One of the last sticking points in the debt limit fight comes down to how to guarantee future deficit reduction. Democrats and Republicans have agreed broadly that the question should fall to a new Super Committee, but that if Congress does not pass yet another fiscal package in the coming months, spending should be cut across the board, including from the military and Medicare.

In other words, no automatic tax increases -- nothing to really focus Republican minds on compromising with Democrats on deficit reduction.

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Debt Ceiling

Pelosi: 'None Of Us' May Support Debt Limit Deal

Brian Beutler | July 31, 2011, 6:46PM

Like Senate Majority Leader Harry Reid (D-NV), House Minority Leader Nancy Pelosi (D-CA) has to consult her caucus before fully buying into a still-forming debt limit deal.

But unlike Reid, she's not keeping completely silent. In a statement to reporters outside her office moments ago, she sounded a strong note of doubt about the prospects for members of her caucus supporting the bill.

"We all may not be able to support it," she said. "And maybe none of us will be able to support it."

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Debt Ceiling

Levin Expresses Dem Frustration With Obama And The Looming Debt Limit Deal

Brian Beutler | July 31, 2011, 2:49PM

Sen. Carl Levin (D-MI)

Speaking with reporters after Sunday's failed debt limit vote, Sen. Carl Levin (D-MI) criticized President Obama for not seizing the initiative and forcing a balanced plan for deficit reduction. He also explained the problems with and merits of a still-forming bipartisan plan that will raise the debt limit.

The key for now, as explained here, is that it avoids default in a way that assures deep spending cuts over the coming decades -- including to entitlement programs -- but provides no guarantees of higher tax revenues.

Specifically the plan calls for a new congressional committee to make and expedite tax and entitlement reform recommendations before the end of the year. If the reforms fail, early leaks suggest that would trigger across the board spending cuts -- including to defense and entitlements -- but no new tax revenue.

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Dick Durbin

Durbin: Defense Cuts Should Stay On The Table In Debt Ceiling Deal

Ryan J. Reilly | July 31, 2011, 2:30PM

Sen. Dick Durbin (D-IL) told reporters on Sunday afternoon that military cuts should be on the table as part of a deal to reduce spending and raise the debt ceiling.

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Harry Reid

Debt Deathmatch? Reid And Boehner Introduce Incompatible Plans To Avoid Default

Brian Beutler | July 25, 2011, 3:56PM

House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV)

As advertised, Senate Majority Leader Harry Reid (D-NV) and House Speaker John Boehner (R-OH) are pushing dueling plans to raise the debt limit on or before August 2, to avoid a catastrophic default. The plans are similar in key ways, but differ on perhaps the last sticking point in the debt limit debate: Whether the debt limit should be raised all the way into 2013, or whether Congress should replay this debt limit fight again early next year, to force Democrats and Republicans to pass entitlement and tax reforms.

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Taxes

The Big Break? Taxes Remain Major Unknown In Potential Grand Deficit Bargain

Brian Beutler | July 7, 2011, 8:41AM

Two Congressional leadership aides -- one Democratic, one Republican -- confirmed elements of Wednesday night's big developments in high-stakes talks to increase the national borrowing limit.

President Obama and leaders on Capitol Hill have committed themselves to moving ahead with a larger deficit reduction deal than negotiators once thought possible in the weeks ahead. In sum, Obama and House Speaker John Boehner (R-OH), along with other GOP and Dem leaders are now aiming for a 10-year goal of $4 trillion in deficit reduction, which would include defined cuts in entitlement, defense, and domestic discretionary spending. The cuts would amount to about 75 percent of the overall savings, and the biggest question now is whether the GOP will truly give ground on taxes -- in specific ways, that produce real revenue. The alternative is that those changes will remain ill-defined in ways that fail to guarantee deficit reduction, and convince already-uneasy Democrats to throw up their hands.

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Debt Ceiling

CHART OF THE DAY: 'Out Of Control Spending' Not Really Out Of Control At All

Brian Beutler | July 4, 2011, 11:25AM

It's taken as an article of faith in D.C. that government has gotten too big, spending is out of control, and Washington has to tighten its belt, just like everybody else. Even President Obama takes this view.

This has meant no small consequences for the federal budget. In the spring, Republicans launched an effort to slash tens of billions of dollars from non-defense discretionary programs -- money the government approves every year to pay for social services and other programs -- from the federal budget. That campaign almost ended in a government shutdown.

That same sliver of the budget is again under attack in the fight over whether to raise the national debt limit. Republicans want to reduce overall domestic spending and cap it for years going forward, so it can't exceed a set level. That means as time goes on, the population grows, and the cost of goods and services increases, the government will be spending less and less on the people who rely on these programs over time.

But a close look at the numbers reveals a few important, and frequently overlooked facts. Domestic discretionary spending is a small sliver of the budget. Our deficit and debts can be traced to the fact that spending on entitlement programs and defense has shot up, and tax revenues have plummeted to their lowest level in decades. But spending on domestic discretionary programs has grown much more slowly. And, if you correct for inflation, and for growing population, it turns out we're spending exactly the same amount on these programs as we were a full decade ago.

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Leon Panetta

Panetta Under Pressure To Slash Defense Spending

Susan Crabtree | July 3, 2011, 2:27PM

CIA Director Leon Panetta

This 4th of July Defense Secretary Leon Panetta, who just took over at the Pentagon on Friday, has a lot more on his mind than patriotism and fireworks.

Panetta is already being forced to walk a fine line between those in his party looking for even bigger defense cuts than his predecessor Roberts Gates recommended and critics who worry that too much streamlining will produce a hollow force.

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Defense Spending

Boeing Caught With Hand In The Cookie Jar, Overcharged Army Millions

Igor Bobic | June 29, 2011, 4:38PM

Apache Attack Helicopter

Boeing Co. raked in millions of dollars from the U.S. Army by marking up spare helicopter parts as much as 177,000 percent, according to a Defense inspector general report first obtained by the Project on Government Oversight.

Boeing, a major defense contractor, overcharged the Army on 18 different parts and collected $23 million dollars instead of the $10 million it should have received in fiscal year 2010. One part, a straight pin that usually valued at $0.04, was sold to the Army for an astronomical $74.01 per unit. A plain stud used on Apache helicopters fetched $3,369.48, even though it usually retails for $190.00 a piece - a 1,673 percent markup.

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Tim Pawlenty

Tim Pawlenty's DC Hosts Irked With Pawlenty's DC Appearance

Evan McMorris-Santoro | May 26, 2011, 8:30AM

Tim Pawlenty

On Wednesday the libertarian Cato Institute hosted former Minnesota governor and presidential candidate Tim Pawlenty to talk about his approach to government spending -- or, more accurately, his promise to cut government spending as much as he can. Pawlenty offered up most of what Cato folks wanted to hear: everything's on the table when it comes to balancing the federal budget, he said, except raising taxes and cutting the defense budget.

That last thing caused Pawlenty's hosts a little agita. Huffington Post's Jon Ward reports that the libertarians were unimpressed with his promise to leave the defense budget where it is.

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