"Submit a budget that reduces discretionary spending (excluding defense and veterans funding) to 2008 levels, adjusted for inflation. That 2008 budget was already a record-setting $3 trillion. Returning to 2008 levels would reduce our annual budget deficits by hundreds of billions of dollars over the next five years. This step alone would not solve all our fiscal woes, and it does not address the entitlement programs that make up the lion’s share of our budget, but it would be an important step in the right direction."
That sounds similar to a widely-reported story about Obama calling for a budget freeze in his State of the Union address Wednesday night, but they're actually very different.
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Obama, according to reports, is calling to freeze most discretionary spending — excluding both entitlements like Medicare and Social Security and discretionary spending on defense and veterans — at levels in the most recent budget, the FY2010 budget. Obama would not adjust that for inflation, so this would mean actual cuts as the dollar lost value in future years — an estimated $250 billion over 10 years. That's about 3 percent of the expected cumulative deficit over that time.
Also, Thune is proposing exempting only the departments of Defense and Veterans Affairs from the freeze. Obama also proposes exempting Homeland Security and State.
Obama also is proposing an overall cap, under which departments can gain or lose. Total discretionary spending will stay the same, but, say, the Department of Education might get more money while the Department of the Interior (to pick two random agencies) might get less, as long as it all balances out.
Thune is proposing not freezing spending at current levels, but freezing it at the levels of FY2008, plus inflation since then. That's two years in the past, back to the Bush administration.
In FY2008, discretionary spending excluding the military and veterans affairs was $593.2 billion, per Wikipedia. Adjusted for inflation from 2007 (when the FY2008 budget was proposed) to 2009 (the most recent year for which inflation data is available), that would be $613.78 billion.
The FY2010 budget in those same areas included $651.8 billion in discretionary spending.
That's a difference of $38.02 billion, or about 6 percent of the non-military FY2010 discretionary spending.
(All discretionary spending from $1.152 trillion in FY2008, adjusted for inflation, to 1.368 trillion in FY2010, or $215.34 billion. That's because the Department of Defense's budget increased by $182.3 billion over that time. Wikipedia and my recollections suggest that that a big part of the increase there is due to accounting — the Bush administration had paid for overseas military operations in Iraq and Afghanistan outside of the main budget process, while Obama budgeted for the wars.)
I'm not quite sure how to account for the difference in what departments the two different proposals would exempt, because I'm having trouble recreating Obama's math from news reports. The Wall Street Journal story I cited above referenced $447 billion as the total amount of discretionary spending affected; by my math, if I subtract the $663.7 billion Defense, $52.5 billion Veterans Affairs, $51.7 billion State and international affairs and $42.7 billion Homeland Security budgets from the $1.368 trillion total discretionary spending I end up with a total of $557.4 billion. I'm guessing part of the difference might include homeland security-related programs under other departments and classified intelligence budgets — the FY2010 budget includes $100 billion in "other" funding.
Anyway, confusion aside, the Homeland Security and international affairs budgets from Wikipedia totalled $104.2 billion in FY2010. In FY2008 those two departments were budgeted at $69.3 billion, or $71.7 billion adjusted for inflation. That's an extra $32.5 billion in savings under Thune's FY2008 freeze compared to Obama's FY2010 budget, plus more due to the money I can't account for.
$32.5 billion is about a 31 percent cut from those two department's FY2010 combined budgets.
(I also can't say for certain whether Thune is actually calling to cut Homeland Security money or not. He doesn't mention it in his Politico letter but I can certainly see him exempting that.)
So based on this back-of-the-envelope math based on Wikipedia figures (so take this with a grain of salt), Thune is proposing a FY2011 budget with at least $70.52 billion (and probably more) in discretionary spending cuts compared to Obama. $70 billion is about 12 percent of discretionary spending minus defense, veterans, international relations and homeland security.
Roughly speaking, then, Thune is calling for a double-digit percentage cut in federal non-military discretionary spending.
Big picture: the biggest chunks of the budget include the military and entitlement spending. Non-military discretionary spending is about one-sixth of the total budget. See this Wikipedia image:


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