What's the local impact of federal spending and revenue decisions? Spotlight on Military Spending and Massachusetts Federal Budget Priorities:

What's at Stake? “I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” Grover Norquist

February Early Spring Late Spring Historically, the first Monday of every February, the President sends a proposed budget plan to Congress. The FY2012 budget was released on February 14, Congress carries out a series of evaluations ultimately passing a budget resolution. Congressional Subcommittees ‘Markup’ Appropriation Bills. Budget Process

Late Spring Early Fall Sept. 30th The House & Senate vote on Appropriation Bills and reconcile differences. President signs the bill approved by Congress and the Senate, and the budget is enacted. Budget Process

What does this really mean? Congressional Budget Resolution 12 Appropriators: House & Senate Agriculture Commerce, Justice & Science Defense Energy & Water Financial Services Homeland Security Interior & Environment Labor, HHS & Education FY 2012 HHS = $885.8B Legislative Branch Military Construction & Veterans' Affairs State & Foreign Operations Transportation & Housing & Urban Dev. Head Start = $8.1B MA = $124.7 M LIHEAP = $1.98B MA = $81.7M TANF = $17.7B MA = $459.4M

Flow of most federal funds and cuts Federal Agency / Department State Agency / Department County, City, Town Individual Taxpayer What does this have to do with you?

FY2012 The Whole $3.7 Trillion Pie Mandatory 59% Discretionary 34% Interest 6% Mandatory Spending Includes: Social Security, Medicaid, Medicare, Food Stamps, CHIP Funding is need-based & non-negotiable Discretionary Spending Includes: Energy, Environment, Science, Transportation, Education Funding determined on an annual basis

FY2012 Projected Revenues by Source Borrowing 29% Individual 31% Corporate 9% Social Insurance 25%

FY2012 The Mandatory Budget Social Security 31% Unemployment 4% $2.44 Trillion Other 45% Medicare 20%

The Proposed Discretionary Budget Military Spending 58% Environment, Energy & Science 6% Transportation 2% Income Security & Labor 2% International Affairs 4% Health 5% Housing and Community 5% Government 6% Food 1% Education 6% 5% Veterans' Benefits $1.24 Trillion

Key Aspects of 2012 “Security” Spending  $553 billion for Pentagon base budget  $118 billion for war  $19.3 billion for nuclear weapons  $7.8 billion for “misc.”  $6.6 billion in military aid to “foreign” nations  What about veterans and homeland security?

How Much Since 9/11? $7,600,000,000,000,000  Pentagon: $5.6 trillion  Wars: $1.36 trillion  Homeland Security: $636 billion

Impact: The Discretionary Budget Crossroads Domestic Military Budget of the U.S. Gov't, FY 2011 Recovery Act Billions of $2010 International Affairs

WhereFederal programs SchoolsHead Start, Title I City HallInfrastructure (water, transit, roads, bridges) Housing AuthorityHousing assistance Community/AntipovertyEarly childhood, economic development, social services block grant, weatherization, LIHEAP, youth programs, food and hunger programs State AgenciesMedicare, Medicaid, TANF, SNAP, CHIP, Jobs programs Employment agenciesUnemployment benefits, job training, jobs CollegesPell grants, student loans, grants to schools Impact: Where Federal Funds Land in Our Communities

The Budget's Story: deficits are about spending and revenue

The Budget's Story Paul Ryan's Plan $6.2 trillion in cuts over 10 years  Cuts corporate and individual tax rates  No cuts to Pentagon  Adds $5.1 trillion to the debt through FY2021  Largely restructures entitlements

The Budget's Story The CPC Plan Budget surplus of $30 billion by FY2021 v. Ryan which projects a deficit of $400 billion  Revenue increases (corporate and wealthy)  Cuts security spending; raises non-security spending  Maintains entitlement spending

The Budget's Story The Budget Control Act “Security”Defense Old Paradigm New Paradigm Part One: $917 billion

The Budget's Story The Budget Control Act Part Two  Raises debt ceiling by $900 billion instantly ($2.1 trillion total)  Creates “Super Committee”  A mandate of an additional $1.2 to $1.5 trillion in deficit reduction  Anything less than $1.2 trillion = Sequestration

The Budget's Story The Budget Control Act Sequestration  If Super Committee recommends anything less than $1.2 trillion  Cuts split 50/50 between Defense and Non- Defense  Sequestration is only cuts; no revenues, no entitlement reforms

The Budget's Story The American Jobs Act Obama's $4 trillion vision: $1.2 trillion in discretionary cuts (already in process) $1.1 trillion from draw down in Afghanistan and Iraq $580 billion from mandatory cuts $430 billion from saved interest payments

The Budget's Story The American Jobs Act Obama's $4 trillion vision: $1.5 trillion from increased revenue Upper income tax cuts (2001 and 2003) expire: $866 billion Limited deductions and exclusions for those making more than $250,000/yr.: $410 billion Closing loopholes and eliminating special interest tax breaks: $300 billion

The Budget's Story Millions of Jobs at Stake Political Economy Research Institute, 2009 Impact of $1 billion on potential job creation in select sectors Direct Jobs Indirect Jobs Induced Jobs 11,600 17,100 19,600 29,100

Jo Comerford, Executive Director, NPP Stay in touch!