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Federal Budget Balanced to Prevent Debt from Exceeding 100% of GDP FY 2012 HA-13-7-12

 

By Anthony J. Sanders

sanderstony@live.com

 

A. The federal government usually runs on a deficit, with some famous exceptions, such as when Andrew Jackson paid off the federal debt in 1835 and more recently when Bill Clinton ran a surplus in 1998-2000, and is currently running the highest deficit in dollar terms in national history, -$1.4 trillion in 2009, and -$1.3 trillion in 2010, 2011 and 2012 and is projected to improve to -$900 million in 2013. This deficit is the second highest as a percentage of GDP since WWII and the Confederacy during the Civil War.  The gross federal debt is scheduled reach 104.8% in FY2012 and 107.4% in 2013 unless the United States gets serious about keeping the federal debt less than 100% of GDP. 

 

1. The vast majority of the deficit is resolved by re-adding agency budgets after imposing reasonable spending limits, principally 3% annual growth from FY 2008, if agency spending is high.  Using this method in the aftermath of the stimulus bills the federal budget was easily brought within 3% of GDP as early as FY 2011 and balanced in FY 2012.  Yet the federal government continues to declare an enormous deficit although they could buy a balanced budget from Hospitals & Asylums (HA) for $1,000.  The Democratic-Republican (DR) monopoly is completely insolvent - regressive taxes, stimulus spending and tax relief must cease; waste, fraud and abuse must be eliminated.  Most of the budget balancing action occurs at the level of agency leadership, some produce acceptable budgets, others must be replaced by people who do.  An annual report explaining how to balance the budget is required for candidates to navigate the federal government in health and safety.  Forecasters should balance the federal budget no less frequently than once every four year Presidential term if they wish to exhibit any economic accuracy to the press.  Projections through 2020 must focus on balancing the annual budget. 

 

Federal Budget 2008, 2010; 2012 & 2013 Rebalanced (Millions)

 

2008

2010

2012

2012 pro

2013

2013 pro

GDP billion

14,334.4

14,359.7

15,601.5

15,601.5

16,335.0

16,335.0

Total Outlays

2,982,544

3,456,213

3,795,547

3,205,300

3,803,364

3,308,600

Total Receipts

2,523,991

2,162,724

2,468,599

2,793,599

2,901,956

2,901,956

Total Deficit

-458,553

-1,293,489

-1,326,948

-411,700

-901,408

-406,700

% GDP

-3.2%

-9.0%

-8.5%

2.6%

-5.5%

2.5%

Gross Federal Debt billion

9,986

 

13,528.8,

2011

14,764.2

16,350.8

15,175.7

17,548

 

15,582

% GDP

69.7%

94.2%

104.8%

97.3%

107.4%

95.4%

Legislative Branch

4,447

4,893

4,538

4,538

4,789

4,789

Judicial Branch

6,518

7,214

7,258

7,258

7,502

7,502

Executive Office of the President

289

432

385

385

392

392

Agriculture

92,950

130,983

147,545

147,545

154,667

154,677

Interior

10,556

12,843

11,598

11,598

11,357

11,357

Environmental Protection Agency

7,393

10,165

8,313

8,313

8,138

8,138

Energy

22,739

23,026

22,843

22,843

32,300

32,300

Commerce

9,585

13,679

7,995

7,995

9,239

9,239

Education

65,399

62,911

116,613

73,248

55,685

75,209

State

23,124

30,285

30,139

30,139

31,608

31,608

International Assistance

24,008

28,127

30,487

30,487

37,399

37,399

Homeland Security

50,624

45,423

47,677

47,677

45,109

45,109

Housing and Urban Development

50,930

45,075

55,901

55,901

44,010

44,010

Transportation

67,974

84,342

122,594

76,160

74,280

78,440

Office of Personnel Management

65,951

72,434

90,744

73,865

94,857

75,844

General Services Administration

340

261

-1,040

-1,040

-840

-840

National Aeronautics and Space Administration

17,209

18,719

17,751

17,751

17,693

17,693

National Science Foundation

6,197

6,963

7,130

7,130

7,470

7,470

Small Business Administration

1,317

6,472

2,715

2,715

1,111

1,111

Justice

26,354

30,171

35,442

35,442

30,023

30,023

Labor

57,973

179,228

138,389

55,000

88,993

58,000

Treasury

751,174

392,169

523,679

523,679

519,490

519,490

Veterans Affairs

88,401

124,305

124,181

124,181

137,381

137,381

Defense- Civil

(Veterans Off-budget)

45,430

54,786

55,524

55,524

57,416

57,416

Civil – Corps of Engineers

9,093

5,665

6,659

6,659

4,668

4,668

Defense – Military

674,694

695,646

650,482

500,000

620,259

500,000

Health and Human Services (on-budget)

700,010

889,625

888,846

824,000

921,605

845,000

Social Security Administration (on-budget)

58,500

70,198

188,749

167,100

116,657

66,000 or 13,700 if SSI paid by SSA

Social Security Administration (off-budget)

601,826

683,908

641,135

733,900

768,658

870,700

Other Independent Agencies (on-budget)

31,701

17,855

39,103

39,103

29,264

29,264

Other Independent Agencies (off-budget)

9,677

4,700

1,742

1,742

n/a

n/a

Allowances

 

18,750

500

500

5,488

5,488

Undistributed Offsetting Receipts

-277,791

-267,886

-279,289

-279,289

-269,592

-269,592

Source: Sanders, Tony J. Federal Budget in Balance FY 2011: Comparison of Bush and Obama HA-28-2-10 as updated by OMB 7/12/12 Historical Table 1.1 Summary of Receipts, Outlays and Surpluses or Deficits; Table 1.2 As Percent of GDP 1930-2017; Table 5.2 Budget Authority By Agency 1976-2017; Table 7.1 Federal Debt at End of Year 1940-2017

 

B. Spending limits for FY2012.

 

1.The Department of Labor (DOL) and Office of Personnel Management (OPM) need to be adjusted to reduce the deficit by $100 billion in FY 2012 and $50 billion in FY 2013.

 

OMB Labor and OPM Errata 2008, 2010; 2012 & 2013 Adjusted

 

 

2008

2010

2012

2012 pro

2013

2013 pro

Total Labor Department

57,973

179,228

138,389

55,000

88,993

58,000

Unemployment Compensation

51,467

139,979

37,938

37,938

+/- 40,000

+/- 40,000

Office of Personnel Management

65,951

72,434

90,744

73,865

94,857

75,844

Source: OMB 7/12/12 Historical Table 5.2 Budget Authority By Agency 1976-2017

 

a. Department of Labor (DOL) spending statistics are in error now that Unemployment Compensation (UC) spending has declined from a high of $140 billion in 2010 to $38 billion in 2012.  Labor spending other than UC rose from +/-$10 billion annually to +/- $30 billion in 2010 and 2011 before rising to $90 billion in 2012.  This is too much for 17,500 full time equivalents, $5.1 million per capita, without any explanation of their finance in the FY 2013 agency budget proposal.  A new acting labor secretary is clearly needed to produce a $50-58 billion DOL FY 2012 budget.  Projected FY 2012 DOL spending must be reduced to an estimated $55 billion from $138 billion to reduce the deficit by $83 billion in FY 2012 and $30.9 billion in FY 2014.  DOL should hire an Actuary to publish an annual report on state and federal UC trust funds for Congress. 

 

b. After exhibiting reasonable growth during the Great Recession 2009-2011 the Office of Personnel Management (OPM) budget is projected to dramatically increase $12 billion, 14.2%, from $79 billion to $91 billion in FY 2012.  OPM spending must be limited to within 3% annual growth from FY 2008 when spending was $66 billion bringing the OPM to $74 billion in FY 2012 and $76 billion in FY 2013.  These spending limits would save $17 billion in FY 2012 and $19 billion in FY 2013. 

 

ED and DOT Spending Errata 2008, 2011; 2012 & 2013 Adjusted

 

 

2008

2011

2012

2012 pro

2013

2013 pro

Education

65,399

62,911

116,613

73,248

55,685

75,209

Transportation

67,974

84,342

122,594

76,160

74,280

78,440

Source: OMB 7/12/12 Historical Table 5.2 Budget Authority By Agency 1976-2017

 

2. Pardoning former Illinois Governor Rod Blagovich’s 14 year federal sentence for attempting to sell the President’s former Senate seat to the highest bidder poses a budgetary emergency in FY 2012.  Firing Illinois cabinet-members would relieve the budget deficit an estimated $109 billion in FY 2012 for the price of adding $24 billion to the deficit in FY 2013.  Both the Education and Transportation Secretaries are from Illinois, the Secretary of Education was one of the President’s grade school super-intendants and the Secretary of Transportation is a Republican, both are extremely damaging to the federal budget in FY 2012.  Rod Blagovich must be pardoned right away.  Both of these Secretaries have consistently posed a conflict of interest with the President, along volatile party and academic lines, failing to produce a solvent agency budget, must be replaced by someone who does. 

 

a. Transportation spending unexplainably rises to $123 billion in FY 2012 from $70.5 billion in FY 2011, a $52.5 billion, 74.5% spending increase, after being $3.6 under 3% annual increase from FY 2008 in FY 2011.  Transportation spending needs to be reduced to $76.2 billion in FY 2012 and $78.4 billion in FY 2013, 3% annual budgetary increase from FY 2008.  This saves $46.5 billion FY 2012 but adds $4.2 billion to FY 2013, paving the way for sustainable 3% annual agency budget growth. 

 

b. Education spending unexplainably rises to $117 billion in FY 2012 from $43.6 billion in FY 2011 and $65.4 billion in FY 2008, a $73.4 billion, 168% spending increase.  The FY 2011 budgetary figure of $43.6 billion is $27.7 billion less than the $71.3 billion it would have been if the agency had stabilized their budget at 3% annual growth from FY 2008 as ordered in 2010 and understood by most other agencies.  Because the agency received some $70 billion in Recovery act funding in FY 2009 we shall not concern ourselves with back-pay and set ED on the road to sustainable growth at $76.2 billion in FY 2012 and $78.4 billion in FY 2013, increasing 3% every year thereafter.  This saves $43.4 billion in FY 2012 and costs $19.5 billion in FY 2013 before stabilizing.

 

3. Collectively the Social Security Administration and Veterans Affairs / Other Defense Civil reduce the deficit by improving OMBs understanding of on-budget and off-budget revenues and spending.  The mathematical error in OMBs SSA on-budget column of $21.6 billion in FY 2012 and mathematical error of $52 billion in FY 2013 must be corrected, the 2% OASI tax relief did not cost so much.  If  OMB really wants to balance the budget they could take Defense-Civil off-budget in the custody of the VA budget and save an extra $55.5 billion in FY 2012 and $57.4 billion in FY 2013 for total savings of $77.1 billion in FY 2012 and $109.4 billion in FY 2013.

 

Veterans Affairs Taking Defense-Civil Off-budget 2008, 2010, 2012, 2013

 

 

2008

2010

2012

2013

Veterans Affairs

88,401

124,305

124,181

137,381

VA Negligence Alternative

n/a

n/a

118,560

121,500

Defense- Civil

(Veterans Off-budget)

45,430

54,786

55,524

57,416

Source: OMB 7/12/12 Historical Table 5.2 Budget Authority By Agency 1976-2017

 

a. The Other Defense-Civil Column at OMB appears to be mostly a third count of service-member contributions, although Congress only promises to match contributions.  Veterans Affairs (VA) spending growth must be brought under control.  Between FY 2012 and FY 2013 VA spending is projected to increase 10.6% from $124 billion to $137 billion.  The agency is $27.5 billion over the $96.4 billion that would expected for FY 2012 and $35 billion over $101.6 billion for FY 2013, if the VA held with the 3% from FY 2008 spending increase.  If the VA did not sue OMB to eliminate the Defense-Civil column by taking its assets off-budget we would be compelled to limit post-Iraq and Afghanistan VA spending to $20 billion plus 3% annual growth from FY 2008 whereby it would be necessary to cut into the cozy disability and retirement benefits that exceed the $2,500 monthly Old Age Survivor Insurance (OASI) income limit.  However, if the VA takes responsibility for the +/-$1 billion actual costs of Defense-Civil, for the Armed Forces Retirement Home and Arlington National Cemetery, and hires an actuary to account for service-member contributions off-budget, it would be easy to forgive this overspending as $35,000 per capita  for the 1 million new veterans from the wars in Afghanistan and Iraq, with room to spare for those destitute after being discharged Other Than Honorable (OTH) at Supplemental Security Income (SSI) rates.

 

OMB On-budget Social Security Spending Errata 2008-2013

 

 

2008

2009

2010

2011

2012

2013

2013

SSA Reimbursement

From General Fund

+/-50 n/a

+/-50 n/a

2,400

102,700

112,100

2,700

0 if 2% OASDI tax relief is terminated FY 2013 Oct. 1, 2012

SSI

42,040

45,904

47,767

49,038

52,020

55,172

55,640

Total administrative costs

9,677

10,327

11,250

11,000

10,750

11,000

11,000

Actual on-budget cost

51,717

56,231

61,417

151,738

164,120

68,872

66,666 or 11,000 if SSA pays SSI

OMB SSA on-budget figure

58,500

78,406

70,198

154,714

188,749

116,657

116,657

Savings Differential

6,783

22,175

8,781

2,976

24,629

47,785

50,485

Source: Source: OMB 7/12/12 Historical Table 5.2 Budget Authority By Agency 1976-2017; 2012 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, Table IV.A.3 Operations of the Combined OASI and DI Trust Funds 2007-21; 2012 Annual Report of the SSI Program, Annual Report of the Advisory Council 2012 and Table C.1 SSI Federal Payment in Current Dollars 1974-2012

 

b. The Social Security Administration (SSA) is an abomination.  OMB has never accurately accounted for on-budget and off-budget SSA spending and must pay closer attention to the Annual Report of the Trustees to Congress that comes out in April of each year, that needs to expanded itself to include study of SSI spending, in consideration of paying for SSI with the combined Old Age Survivor Disability Insurance (OASDI) trust funds, without raising overall OASDI taxation until after 2020, and we have satisfactorily made a withdrawal from what has become over the past decade the largest savings account in the world.  In 2012 the annual report of the OASDI trust funds indicates that off-budget receipts amounted to an estimated $733.9 billion FY 2012, taking into consideration $112.1 billion reimbursed by the General Fund for the unwise and insignificant 2% OASDI tax relief, and $788.7 billion in expenditures, $777.7 billion for benefits.  In FY 2013 reimbursements are scheduled to go down to $2.7 billion for total off-budget revenues of $870.7 billion and $832.3 billion in expenditures.  For OMB SSA off-budget column, it is probably best to account for total revenues, but normally it makes no difference to the federal budget.  What then do the on-budget statistics mean for the federal budget?  The on-budget statistics include the reasonable cost of administration plus SSI, until SSA is given responsibility for paying for SSI by Act of Congress, and the cost of reimbursing the unwise 2% OASI tax relief.  The figures provided by OMB are however $6.8 billion over in FY 2008 to $22.2 billion over in FY 2009, going down to $8.8 billion over in FY 2010 and $3 billion over in FY 2011 before becoming statistically significant at $24.6 billion in FY 2012 and $47.8 billion in FY 2013.  OMB needs to revise on-budget statistics to reflect actual spending reported in the Annual Reports,

 

i. The Commissioner is principally responsible for the +/-$666 ($674) for three years without Cost-of-Living Adjustment (COLA) December 2008-2012 that caused the 99.9% of the Great Recession by racketeering Hospitals & Asylums (HA), producer of the highly infringed only balanced budget since 2005 using a strategy of military spending reduction and OASI surplus return to the General Fund, now obsolete in favor of total management of all federal agency budgets, if not committing and covering up mass genocide upon 50 million beneficiaries, 7 million or so marked with the number of the beast 2008-2011 and 1 million wise afterwards due >$700 a month and settlement of their written claim, to the degradation of constitutional governance (and national life expectancy in 2008 now covered up).  The Commissioner is not only needs to be removed from office for misconduct, including a $250,000 fine to compensate HA for use of the interstate commercial facility for murder for hire in hiring five illiterate administrative law judges (ALJs), but the Social Security Amendment of 2001 that gave him and his predecessors six year terms needs to be amended to provide for a reasonable 2 year term, to maximize political harmonization with the President and majority. SSA may choose to appoint an Acting Commissioner independent of the President, Congress and number of the beast.

 

Changes to OASDI if SSA paid for SSI anytime 2013-2020

 

 

2011

2012

2013

2014

2015

OASDI Net Increase at end of year

69,000

57,300

41,100

42,400

43,100

SSI  7% annual growth from 2012

49,038

52,010

55,650

59,546

63,714

Revised Net Increase

n/a

n/a

-14,550

-17,146

-20,614

Revised OASDI Balance

 

 

2,720, 650

2,703,504

2,682,890

Current OASDI Balance

2,677,900

2,735,200

2,776,300

2,818,800

2,861,900

 

2016

2017

2018

2019

2020

OASDI Net Increase at end of year

46,200

49,700

48,900

36,900

17,300

SSI  7% annual growth from 2012

68,175

72,947

78,053

83,517

89,363

Revised Net Increase

-21,975

-23,247

-29,153

-46,617

-72,063

Revised OASDI Balance

2,660,915

2,637,668

2,608,515

2,561,898

2,489,835

Current OASDI Balance

2,908,100

2,957,800

3,006,800

3,043,700

3,061,000

Sources: 2012 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, Table IV.A.3 Operations of the Combined OASI and DI Trust Funds 2007-21; 2012 Annual Report of the SSI Program, Annual Report of the Advisory Council 2012 and Table C.1 SSI Federal Payment in Current Dollars 1974-2012; The Revised OASDI Balance may not take into account adjusted interest earnings.

 

ii. The question is when will Congress wise up and require SSA pay for SSI saving the General Fund $52 billion (base year FY 2012) plus 7% annual growth.  It was wrong under antitrust principles for Congress to reimburse SSA for a 2% OASDI tax reduction and needs to stop at the soonest possible time October 1, 2012, the first day of FY 2013 is the time.  This harmful error must cease and must not be remembered by historians and propagandists as anything but a harmful error that caused massive layoffs and stifled economic growth from America’s usual 3% 2011-2012 to an anemic 1.4% mid-year 2012.  Reason being, we all know, if we haven’t been brainwashed by trust fund propaganda, we have to make a significant withdrawal from the largest savings account in the world – the OASDI Trust Fund – and doctor the deficit, by making OASDI pay for SSI, without increasing the overall 12.4% OASDI tax rate, until after 2020.  The people should be informed of the true cost of disability with a legislated 3.6% DI+SSI and 8.8% OASI tax split 50/50 between employers and employees.  The SSA Chief Actuary must be immediately required to include SSI in the Annual Report to Congress, for the agency to be prepared to withdraw OASDI assets to a $2.4 trillion limit. 

 

5. Conventional budget balancing wisdom from the Balanced Budget Act of 1997 (Public Law 105-33) that sustained military spending cuts was improved in the Balanced Budget Refinement Act of 1999 limiting medical spending, balancing the budget, indicates that military and medical spending must be limited to balance the budget.  This might seem dangerous but these agencies understand that they have extortion and intimidation problems and generally take well to budgetary guidance, spending only what is trustworthy and saving the insolvent waste to return to the General Fund if called upon to reduce the deficit.  If the United States is going to balance the budget Congress and the President must limit military spending to less than $500 billion until 2020 and medical spending to 3% annual cost increase from FY2008, $784 billion in FY 2012, $808 billion in FY 2013, and $832 billion plus $50-150 billion $882-982 billion to expand Medicaid to pay for the health care of all people 133% of poverty line in FY 2014.  Realizing these pre-agreed spending limits that govern their behavior would save FY 2011 $173 billion, FY 2012 $238.3 billion, and FY 2013 $253.6 billion.

 

$500 billion military spending limit 2008-2010, 2011-2013 Adjusted

 

 

2008

2009

2010

2011

2012

2013

Defense – Military

674,694

667,557

666,715

691,471

650,482

620,259

Revised

n/a

n/a

n/a

518,000

500,000

500,000

Savings

n/a

n/a

n/a

173,471

150,482

120,259

Source: OMB 7/12/12 Historical Table 5.2 Budget Authority By Agency 1976-2017

 

a. In the aftermath of the wars in Afghanistan and Iraq Department of Defense (DoD) must be limited to less than $500 billion until 2020.  In FY 2011 the Secretary of Defense announced a $518 billion budget which we hold him to reducing to less than $500 billion any given year.  It is presumed that little over the $400 billion mark is spent on military and all over that is unwisely invested, lost and stolen.  It should not be difficult for DoD to comply with a $500 billion peace-time spending limit, saving the budget $173 billion in FY 2011, $150.5 billion in FY 2012 and $120.3 billion in FY 2013.

 

HHS Spending, 2000 & 2008 Base Years plus Part D and ACA 2012-2014

 

 

Base Year

2012

2013

2014

HHS Spending

854,059 (2010)

871,836

940,832

1,040,661

2008 Base Year Revised

700,442 (2008)

784,000

807,520

831,745 + 50,000 – 150,000 = 881,745-981,745

Savings

 

87,836

133,312

158,916 – 58,916

2000 Base Year Revised

382,311 (2000)

519,520 + 30,000

535,106 + 30,000

551,159 + 80,000 – 180,000

Source: Source: OMB 7/12/12 Historical Table 5.2 Budget Authority By Agency 1976-2017, Cost of implementing Medicare Part D by HHS, Cost of implementing the ACA by American Health Insurance Programs (AHIP) 2008

 

b. Health and Human Services (HHS) spending needs to be reduced to a high of 3% annual increase from FY 2008 and low from FY 2000, before the Center for Medicare-Medicaid Services (CMS) seized the much more literate Health Care Financing Administration (HCFA) in 2001 and spending exploded, plus spending justified by the Medicare Part D Drug Plan and the Affordable Care Act (ACA). Inflation in all medical costs must be limited to 3% and to enforce this critical economic law that limited global inflation since the confusing times of the 1980s HHS and CMS must lead by example.  The United States quasi private health insurance system is the only industrialized nation that doesn’t provide universal medical coverage and is the most extortionate in the world with rapidly rising costs around 18% of GDP.  The Court noted that the ACA must reduce medical spending while increasing revenues.  >$1 trillion in medical spending in FY 2014 is unacceptable unless the United States begins to provide genuinely universal health insurance that is free for the poor and continues to strive to reduce costs to the General Fund through progressive taxation and the sale of reasonably priced Medicaid premiums to those earning more than the poverty line.  To respect the Court HHS must make immediate downward revisions in spending in FY 2012.  Until 2014 when Medicaid will be obligated to pay for the medical costs of the poor the current FY 2008 derived spending limit should be more than enough to pay for ACA instructional costs until FY 2014. Medicaid enrollment is expected to be 50% shy of universal coverage of wage earners, only about 24 million of 48 million uninsured are expected to be covered under current law, but the poor will be covered in FY 2014.  The actual cost of implementing the ACA, or any universal health insurance program in the United States, is estimated at $50-$150 billion by American Health Insurance Programs (AHIP) that represents the state regulated health insurance companies who benefit from the ACA and would be put completely out of business if their $4 trillion in assets were nationalized by Medicaid.  Using 3% growth from FY 2008, HHS spending should not exceed $784 billion in FY 2012, $808 billion in FY 2013 and in FY 2014 when the ACA promises Medicaid will be obligated to pay for all the necessary medical treatment of people 133% of the poverty line, $832 billion plus $50-$150 billion - $882-982 billion.  $1 trillion is a reasonable price for universal health insurance coverage to prohibit medical billing in the United States but the General Fund seems to overestimate their worth.  It is not too late for Medicaid to sell health insurance premiums to residents with earnings over the poverty line and put extortionate premiums of private health insurance companies out of business.  HHS must limit spending to not more than $784 billion in FY 2012, $808 billion in FY 2013 and $882-982 billion in FY 2014.   

 

HUD 2009-2012 (in millions)

 

2008

2009

2010

2011

2012

2013

Housing and Urban Development OMB

50,930

61,019

60,141

57,002

56,788

46,283

HUD Budget Request

 

40,720

43,720

48,913

47,900

44,800

Savings

 

 

 

 

8,888

1,483

Source: HUD. FY 2011 Budget. February 1, 2010. Pg, 39; Housing and Communities Built to Last: Budget FY 2013

 

C. HUD is not under any spending limits. HUD offers to reduce the budget by more than any other delinquent federal agency by folding TARP returning > $300 billion of TARP repayments, and all future repayments therefrom, to the General Fund, and claiming <$47 billion in un-administrated distressed homeowner to pay for HUD’s entire FY 2013 budget on October 1, 2012.  Under the current Secretary OMB is improving their command of HUD’s $700 billion annual loan authorizations and $47.9 billion welfare administration in FY 2012 and $44.8 billion in FY 2013 saving the deficit $8.8 billion in FY 2012 and $1.5 billion in FY 2013.  Like some other agencies HUD is proposing to reduce their budget, but unlike Education and Transportation does not exhibit a tendency for a “boom-bust cycle”, just better efficiency.  Section 8 vouchers are not universally accepted by landlords in any state but Connecticut.  The Secretary is a Harvard educated architect.  Although his economics may not be free of subsidy propaganda the HUD budget appears to be.  He claims the 2 year wait for Section 8 has been reduced by over 80%. 

 

1. Is the HUD Secretary fast enough to save FY 2012 from plunging the nation into federal debt exceeding 100% of the $15.6 trillion GDP?  Not alone, folding TARP can reduce the FY 2012 deficit to $1 trillion by increasing revenues $300 billion. Would it be better for HUD to wait for FY 2013?  $100 billion must be saved prohibiting overspending in DOL and OPM in FY 2012 and $50 billion in FY 2013.  Pardoning former Illinois Governor Rod Blagovich’s 14 year federal sentence rather than the “boom bust cycles” of the Secretaries of Education and Transportation reduces the deficit $109 billion in FY 2012 at the stabilizing cost of $24 billion in FY 2013.  Correcting SSA’s on-budget OMB account and taking the +/-1 billion real costs of Defense-Civil for Hospitals & Asylums (HA) properties off-budget by the VA the deficit would be reduced by $77.1 billion in FY 2012 and $109.4 billion in FY 2013.  Holding DOD and HHS to pre-agreed spending limits would save FY 2011 $173 billion, FY 2012 $238.3 billion, and FY 2013 $253.6 billion.  HUD’s meticulous accounting also reduces the deficit by $8.8 billion in FY 2012 and $1.5 billion in FY 2013.  Is this small enough for HUD to do Aristotelian justice and rally Cabinet reports around Art. 2(2) of the US Constitution to keep the federal debt from ever exceeding 100% of GDP in FY 2012 without folding TARP?  Without TARP revenues these reasonable spending limits reduce the deficit by $540 billion to -$787 billion, 4.7% of GDP, which would increase federal debt to $15.55 trillion, 99.7% of GDP – disaster averted, mission accomplished.

 

a. Would folding TARP balance the FY 2013 budget?  Without folding TARP it is estimated that the FY 2013 deficit could be reduced by an estimated $494.4 billion from -$901 billion, 5.5% of GDP, to -$407 billion, 2.5% of GDP, this would bring the debt adjusted in the previous paragraph, down to a roughly estimated $15,958 billion, without accounting for interest, 97.8% of GDP.  A budget deficit less than 3% does not incur austerity European Union (EU) measures. Returning TARP FY 2013 would reduce the deficit to $107 billion, which could be reduced by another $50 billion by requiring SSA to pay for SSI, to $57 billion which could be easily covered with the help of $23 billion offered by the Department of Agriculture, a balanced FY 2013 budget would reduce the federal debt to 95.2% of GDP.  Achieving balance would probably be good for the economy but would be very difficult to sustain with the full costs of the ACA looming in FY 2014.  It is therefore rewritten that $325 billion in TARP funds be returned to the General Fund in FY 2012 reducing the deficit to -$412 billion, 2.6% of GDP, which would reduce the debt as a percentage of GDP 1.4% from the previous year to 97.3%, and set good precedence for all future years.  In FY 2013 the debt would go down to 95.4% of GDP.  Carpe diem.

 

Bibliography

 

2012 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds

2012 Annual Report of the SSI Program

Housing and Urban Development. Housing and Communities Built to Last: Budget FY 2013

Office of Management and Budget. Public Budget Database User’s Guide: Budget of the United States Government FY 2012. Budget Analysis Branch. February 2011

Sanders, Tony J. Federal Budget in Balance FY 2011: Comparison of Bush and Obama HA-28-2-10

n  As codified in Sec. 148 Balanced Budget Application; Article 11 System of National Accounts. Health and Welfare. Book 3. 8th Ed. Hospitals & Asylums HA-4-7-12