Rattner's charts: How sequester impacts different parts of the budget

>>> live look at the lincoln memorial at 48 past the hour. let's do the must read opinion pages and rattner's charts. david brooks writes in the "new york times," our second ad less sense. my dream obama would abandon the big government versus small government argument. he'd point out that in a mature aging society, government isn't going anywhere. the issue is not size but sclerosis. the crucial point is not whether a dollar is spent publicly or privately, it's whether it's spent on the present or the future. the task today is reform institutions and rearrange spending so we look like a young nation and not a comfortable seeking declining one. my dream obama wouldn't be just one gladiator in the zero sum budget wars, he'd transform the sequester fight by changing the categories that undergird it, he'd possess the primary ingredient of political greatness, imagination, the great presidents like teddy roosevelt see situations differently, they ask different questions. history pivots around their terms.

>> you know, great presidents also question initial assumptions. i think a lot of people's dream this would be the barack obama we were introduced to as a nation in 2004 have been dashed time and time again. he doesn't see the country as one country politically, he sees the country as blue america and red america and he campaigns to sure up support in blue america . that can all change. he's got three years, 3 1/2 years to be more inclusive, but i don't see it happening because i don't think he understands republicans. doesn't really talk to republicans that much. he comes from -- unlike bill clinton , he comes from very insulated political world .

>> one counter to the not talking to republicans from the context i've spoken to. you can roll your eyes at this, he is.

>> let me take off my glasses so people can see me roll my eyes more effectively, go ahead.

>> he is talking to them and in order to help some save face because boehner is having such a problem interacting with his own caucus, that has been kept quiet. i'm sure you won't believe that. you really think he's not talking to any. that's crazy. that's just my opinion.

>> democratic senators tell me that he's not talking. he hasn't for years. he could change. i believe in second chances. i believe f. scotts fitzgerald is wrong. i believe there are second acts in american society .

>> so the sequester is friday, steve --

>> there are three charts that will prove that right now.

>> explain.

>> i don't know if i have enough time to convince you, joe , i will do my best.

>> let's try.

>> you hear a lot of people on the right saying these cuts are no big deal , 2.3%. any business can cut 2.3%. they don't affect the entire budget . 40% of the budget . defense will be cut $42 billion, taking a 7.3% cut in its budget . non- defense discretionary, the investment we like to talk about.

>> 7.3% in the budget and we have to blow this out a little bit. be patient. is that in real dollars , in projected cuts?

>> in fairness from the project projected baseline budgets in itself has modest cuts. not real cuts but cuts.

>> we're slowing down the rate of growth.

>> true. but you also have inflation. anyway, let's do this in a relative one. 7.3% for defense . 5% for non- defense discretionary, education infrastructure, transportation kinds of programs we like. look at medicare, 2% out of medicare and nothing out of the rest of the budget . let's look at now just to remind everybody of what we had in terms of cuts so far. we actually had four rounds of deficit reduction. the first two were all spending all out of domestic discretionary spending and then you had this tax increase, joe , you like to emphasize and then you have the sequester, all out of spending, out of those categories we've shown you. if the sequester stays in place, we will have 3$3.5 trillion of deficit reduction, almost all of it, 85% of it out of spending. let's look at -- the really important point here, everybody agrees we should cut spending. the really important point how it affects different parts of the budget .

>> does everybody agree with that?

>> i will run out of time if i tell you how it affects the budget if i answer that question.

>> he's getting awfully short. wow.

>> just quickly, defense is 18%. defense is 18% of the budget . it will take 38% of the cuts. non- defense discretionary, education, transportation, infrastructure, is 16% of the budget . it's going to take 44% of the cuts. joe , this is one you should pay attention to. entitlements are 45% of the budget and they will take 4% of the cuts. so what you can see here is how unbalan unbalanced these cuts are. the bulk of them go to defense and non- defense discretionary, which only represent about a third of the budget . another way to look at it is non-definition discretionary is going to lose 17% of its projected budget over the next 10 years.

>> you know, it's -- again, therein lies the problem.

>> therein lies the problem. they always go to discretionary spending , they don't have the courage to talk about entitlements, that's like you said, 45% of the budget . it's hard to convince americans when you've got, i think our debt costs us $2.3 billion a day, it continues to grow with historically low interest rates, there are a lot of people i think in the capitol, republicans maybe, a lot of americans who say we have a 3$3.5 trillion budget , kikkan cut 2.4% without damaging the economy if we do it in a smart way.

>> the flip answer is cut 2.4%. the fact is we're doing it in a stupid way, the most stupid way you can imagine.

>> once again, we're cutting from discretionary spending when we have to reform entitlements.

>> still ahead on " morning joe ," his state could lose up to 200,000 jobs if congress fails to address the sequester by this friday. we'll talk to virginia senator, tim kaine , about the looming cuts and jack kingston joins the conversation.