Failed, Now What?
Now that the super-committee and Congress failed to act on further deficit reductions, automatic across –the-board cuts of $1.2 trillion in both defense and non-defense program will happen.
The failure of our government officials in Washington to act underscores the attitude of Washington. It seems that most of the politiaican are more interested in party goal rather than the good of the country. So now let’s take a look at what cut are coming:
These cuts will start in 2013 and may be effect until 2021
- - There will be caps on any new Congress-approved spending on defense programs, will be reduced from 10 percent in 2013 to 8.5 percent in 2021, saving about $454 billion.
- - Caps on Congress-approved spending on non-defense programs will be reduced from 7.5 percent in 2013 to 5.5 percent in 2021 saving about $294 billion.
While it looks like the bulk of the cuts will happen in defense spending, there will also be cuts in programs such as Medicare.
Medicare spending would be reduced by 2 percent a year, Saving about $123 billion. Other mandatory spending program would produce another $47 billion.
Cuts to mandatory programs include about $10.8 billion in Medicare payments to providers and insurance plans and about $5.2 billion to other program such as farm price supports
There is some good news, programs that are exempt from Congress-approved cuts include Social Security, Medicaid, food stamps and the Children’s health program.