Here comes the deflation in the U.S.

White House to Cut Energy Assistance for the Poor
President Obama’s proposed 2012 budget will cut several billion dollars from the government’s energy assistance fund for poor people, officials briefed on the subject told National Journal.

It's the biggest domestic spending cut disclosed so far, and one that will likely generate the most heat from the president's traditional political allies. Such complaints might satisfy the White House, which has a vested interest in convincing Americans that it is serious about budget discipline.
GOP cuts deep as right revolts
More than any single event in the new Congress, the standoff captured what’s become a rhetorical nightmare for GOP leaders — having pledged to cut $100 billion from spending this year but then single-mindedly targeting just one narrow segment of the budget covering domestic programs and foreign aid.

The whole intellectual framework for the $100 billion pledge was based on rolling back these same programs to the 2008 appropriations levels set in the last year of the Bush administration. Two bites were always expected to be needed, and the $40 billion in reductions represents a major down payment. But that 2008 marker is largely ignored now in the devotion to $100 billion, a number that has taken on a currency of its own and seems to defy any effort by the leadership to rationalize a lesser figure.

Republican freshmen, having just returned from their recent recess at home, complained at the morning meeting of being embarrassed now after telling their constituents that the $100 billion target would be met.

“The first rule of politics is when you are explaining, you are losing,” Rep. Jeff Flake (R-Ariz.) told POLITICO. And as a new member of the Appropriations Committee, Flake had warned the leadership Tuesday that $40 billion would not be enough. “After we spent a significant portion of the conference trying to explain why it really is closer to $100 billion than it is, we’ve lost.”
The federal government is the borrower of last resort, pumping credit into the American economy while the private sector deleverages. As spending in Washington comes down, so will the artificial boost to the economy.

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