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U.S. Tax Expenditures for 2008 and 2010, Where can we make cuts?

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In 2008 the IRS collected approximately $2.5 trillion dollars. Congress spent $3 trillion dollars, which amounts to 21% of the U.S. Gross Domestic Product (GDP), $500 billion dollars had to be borrowed to meet spending. Projected for 2010; the IRS is expected to collect approximately $2.2 Trillion dollars (current recession is resulting in is less tax revenue). Congress is expected to spend $3.6 trillion dollars, or 24% of GDP, $1.4 billion dollars will have to be borrowed. The breakdowns are as follows and illustrate spending differences between the Bush administration in 2008 and the Obama administration for 2010. 2009 figures are left out, since decisions on TARP and other bailout related expenditures were shared between administrations. Where can U.S. citizens realistically expect congress to cut spending? Spending can be divided into discretionary and non-discretionary. Non-discretionary spending represents those budgetary expenses that are required by law and have built in cost of living increases. These include Social Security, Medicare, Medicaid, interest on the national debt, and the Farm Bill. Discretionary spending includes the remaining half to one third of our overall spending. Of that amount, military expenditures represent more than 50% of discretionary spending and non-military expenditures the remaining 45% – 50%. Non-military expenditures consist of net safety programs which are designed to provide assistance to families and individuals facing financial hardship (25%), veterans benefits (6%), education (4%), transportation (3%), environmental (3%), international aid (2%), science & technology (2%), agriculture (2%), energy (2%), and justice administration (1%). There are certainly areas in all these sectors where fat can be cut.

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