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What do 'cuts' mean to federal lawmakers?

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    Bret Baier calculates 'The Cost of Spending'

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Here -- the word cut an awful lot here in Washington but lawmakers.

Don't use the term the way you would.

Part three of our series the cost of spending focuses on inadequate solutions.

The Bowles Simpson deficit debt commission report came out two years in eighteen days ago.

And on that brisk December morning democratic senator Kent Conrad painted a dire picture if lawmakers did not move quickly.

I really believe we are at a critical.

-- We -- borrowing forty cents of every dollar that we spend in this country.

Our revenue as a share of our national income is the lowest it's been in sixty years.

Our spending.

Is the highest it's been in sixty years as a share of our national income.

That is not sustainable.

If we fail to act now.

Our country could find itself.

In a circumstance.

In which we have to take draconian action at the worst possible time in the midst of the crisis.

I pray to god.

That we have the wisdom.

To act.

Before that point again more than two years ago the two commission chairs could not agree more this baby.

Mean going away.

-- play it reduces the deficit by four trillion dollars over the next nine years approximately -- four trillion dollar reduction in less than ten years.

Lawmakers called -- a real stars if he could pass congress.

It never hands fast forward to the current so called fiscal -- negotiations.

The deal on the table is smaller.

And yet the president Wednesday said Republicans should be pleased with the spending cuts they'd be getting him to sign on to.

Take the deal.

To -- you know -- will be able to claim that they have worked with me over the last two years to reduce the deficit.

More.

Than any other deficit reduction back.

There we will stabilize it for ten years that is -- significant achievement for them.

They should be proud of it but clearly they are not we are going to begin to solve our debt problems.

And we're not going to be able solve it by kicking the can down -- road.

And doing all the gimmicks that have been done in the past its time to address our spending growth will either party really ever do that.

Here's the inside Washington reason why many are skeptical.

Let's take a look at the full scope and size of the government of the -- -- years now in yellow you can see how the approximately ten billion of your tax dollars spent.

By our government in a day adds up to -- -- of three trillion dollars a year now above that in the red.

That's the interest were paying on that spending well into the hundreds of billions of dollars.

So when it comes time for Washington to make -- we lose some of that yellow right.

Well actually no you see this gray line right here.

Those -- the cuts.

Lawmakers when they're making cuts had ended up slashing away and amount of money that doesn't even cover the interest.

When they've been so called cutting.

And we continue spending more each year so what were actually spending.

Does it never truly get -- we never get into the yellow.

The word Qaeda is what government statisticians -- Budget officials call it but in fact it just really a slowing the growth.

And sometimes the growth is still quite high even after -- slow down.

They assume that if this year we spend 5% next you're gonna spend 8% of the European ever to spend 10% and -- -- tell you what.

Why -- we -- a percentage point off each one of those rates of growth OK hate for him.

Six and nine or something like that and and presto that's a cut or a -- cut.

But just slower growth but that's the way the government counts things you can't count things that -- the private sector.

But that's the way the public sector does it.

Former democratic senator Evan -- I think there was some passage and Alice in Wonderland that most of dealt with -- because -- in Washington and less of an increase is considered a cut even though that's more money.

Even with no family no business no philanthropy is operated this way.

If you're getting you know 2% more even if inflation was 2.2 percent you're still getting more.

But that's not the way Washington works that's where that is the political realities of this town and things -- difficult.

So why not scrap the system all together.

And start from scratch.

Or from zero well from time to time there have been suggestions made -- served in zero based budget.

You just go back and start over again and say okay how much money we do we have Howard -- -- And if we can do more we do more but you don't.

You don't judge yourself by some artificial and fictitious -- -- future escalation that may or may not be affordable.

That's the way every business every family every charitable foundation -- operating.

-- -- good federal government did that too.

It's hard to do the private sector -- and assume they're gonna spend the same amount of money with the same suppliers the same subcontractors every year they look at they say what should we spend -- money on it who's giving us the best deal.

The way the government assumes we're gonna do everything we did last year plus a certain percentage.

That's kind of how the way the government works -- the reason is because they're not responsible for raising the money the way the private sector does they can actually go to taxpayers and say pay up.

Or go to jail.

Where she can't do that the private sector but with a public sector doesn't have these constraints it doesn't have an incentive to do this.

Zero based budget to make the same kind of decisions that all of us Macon.

That's frankly Brett the reason were in the position we're in today.

Tomorrow night a look at the best way to measure debt.

Also the Federal Reserve interest rates.

And what could happen soon so what do you think about the way the federal government handles spending -- on Twitter you can follow me at -- there.

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