A Look at the Budget

Mish note:
This was one of the topics of discussion on my weekly podcast on HoweStreet. We also discussed gold, copper, and the monetary draining in China. Scroll down on the left and look for "The US Budget - Gold price pullback and Chinese manoeuvers - February 8". Click listen for an audio play.

Following is A Look at the Budget:

President Bush has proposed a $2.77 trillion dollar budget.

Bush defended his budget in New Hampshire and at White House.

Here is the official budget blueprint.

Following is An Agency by Agency Look at the Budget, complete with a Mish proposal as to how to balance it.

Agency: Department of Agriculture
Spending: $96.4 billion.
Percentage change from 2006: +0.2 percent
Mandatory Spending: $76.7 billion
Mish proposal: $6.4 billion (inspections only)
Mish savings: $90.0 billion

Agency: Department of Commerce
Spending: $6.3 billion
Percentage Change from 2006: -2.2 percent
Mandatory Spending: $167 million
Mish Proposal: $2.3 Billion
Mish Savings: $4.0 Billion

Agency: Department of Defense
Spending: $491.3 billion
Percentage Change from 2006: -8.7 percent
Mandatory Spending: $2 billion
Mish Proposal: $291.3 Billion
Mish Savings: $200 Billion

Agency: Department of Education
Spending: $63.4 billion
Percentage change from 2006: -28.5 percent
Mandatory spending: $9 billion
Mish Proposal: $33.4 Billion
Mish Savings: $30 Billion

Agency: Department of Energy
Spending: $20.7 billion
Percentage Change from 2006: -1.8 percent
Mish Proposal: $10.7 billion
Mish Savings: $10 billion

Agency: Environmental Protection Agency
Spending: $7.2 billion
Percentage change from 2005: -4.9 percent
Mish proposal: $12.2 billion
Mish savings: -$5.0 billion

Agency: Department of Health and Human Services
Spending: $697.7 billion
Percentage change from 2006: +3.1 percent
Mandatory spending: $627.8 billion
Mish Proposal: $597.7 billion
Mish Savings: $100 billion

Agency: Department of Homeland Security
Spending: $31 billion
Percentage Change from 2006: +9.8 percent
Mandatory Spending: $98 million
Mish Proposal: $8 Billion
Mish Savings: $23 Billion

Agency: Department of Housing and Urban Development
Spending: $33.5 billion
Percentage Change from 2006: -29.9 percent
Mish proposal: $1.5 billion
Mish savings: $32 Billion

Agency: Department of Interior
Spending: $9.1 billion
Percentage change from 2005: -2.4 percent
Mish proposal: $10.1 billion
Mish savings: -$1 billion

Agency: Department of Justice
Spending: $22.5 billion
Percentage change from 2006: -0.6 percent
Mandatory Spending: $3 billion
Mish proposal: $12.5 billion
Mish savings: $10 billion

Agency: Department of Labor
Spending: $54 billion
Percentage Change from 2006: +5.5 percent
Mandatory Spending: $43.2 billion
Mish proposal: $44 billion
Mish savings: $10 billion

Agency: National Aeronautics and Space Administration
Spending: $16.8 billion
Percentage Change from 2006: +1 percent
Mish proposal: $16.8 Billion
Mish savings: $0 billion

Agency: State Department
Spending: $33 billion
Percentage Change from 2006: +13.1 percent
Mish proposal: $23 billion
Mish savings: $10 billion

Agency: Department of Transportation
Spending: $67.7 billion
Percentage change from 2006: +4.9 percent
Mandatory outlays: $54.5 billion
Mish proposal: $67.7 billion
Mish savings: $0 billion

Agency: Treasury Department
Spending: $495.8 billion
Percentage Change from 2006: +9.2 percent
Mandatory Spending: $484.2 billion
Mish proposal: $495.8 Billion
Mish savings: $0 billion

Agency: Department of Veterans Affairs
Spending: $77.7 billion
Percentage Change from 2006: +10.4 percent
Mandatory Spending: $42 billion
Mish proposal: $70.7 billion
Mish savings: $7 billion
===============================================================
Mish savings: $526 billion
Mish additions: $6 billion
Mish savings: $500 billion

Comments:

I would essentially scrap the entire department of agriculture except for meat and crop inspections for health and safety reasons. If that requires more than $6.4 billion then adjust accordingly. There would be no more crop subsidies or farm subsidies.

We do not need troops in Europe, Japan, new ships, or more nuclear weapons of any kind. The US can not afford to be the world's policeman. I would reduce the number of ships, planes and bombs. The US spends as much as the entire rest of the world combined on military budget. If we cut it in half then we will spend half as much as the rest of the world combined. That should be enough to protect ourselves nicely. I allowed far more than that.

The EPA is underfunded. It is time to crack down on pollution and polluters. The additional cost here is a mere $5 billion. I would also increase the department of interior budget by about $1 billion to help preserve our national parks.

I do not know where, but out of an entitlement budget of close to $700 billion, we ought to be able to find $100 billion to cut somewhere. For starters we could roll back the last Medicare bill and probably save far more than that. Certainly down the road this should be reduced more.

I would practically eliminate the dept of labor, and along with it the Davis Bacon act and all sorts of other stupid legislation. I am not sure how this department can possibly spend $54 billion. I am making an assumption that $40 billion of it is a total waste.

Us intelligence is anything but. Slash the state department budget.

Interest on the debt must be paid. So there is little one can do with the treasury dept budget other than cut wasteful spending to ensure we do not pay more interest down the road.

The Dept of homeland security has proven to be useless. It's time to end all these wiretaps and every other silly thing they are doing. We got along nicely without this department before we do not need it now. The one thing I would do, however, is beef up security on the border with Mexico as well as send a lot of illegal aliens packing. That task however belongs under the military budget. Nonetheless I was generous. I allowed this department to waste $8 billion with the ultimate goal of merging the department back from wherever it came.

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/