More than a third of the way through fiscal year 2011, and we’re finally getting to the end game on finalizing the federal spending bills. Good thing, too, as the President’s budget request for FY2012 emerges Monday. A roughly $3.5 trillion box of Valentine’s chocolates for budget geeks. And like Forrest Gump observed, we don’t know what we’re going to get.

But we do know one thing: cuts are going to be front and center.

Budget cutting is the hottest new trend in Washington. Lawmaker after lawmaker has introduced proposals. Don’t get us wrong, TCS was for cutting before cutting was cool. In fact, we've already thrown our hat in the ring with more than $350 billion worth of low-hanging fruit cuts, and we're not done yet.

After all, we’ve been talking about responsible budgeting for 16 years. It's not just about mindlessly whacking away at the budget with a meat cleaver, but it’s not about only using a paring knife either. Congress and the President have to decisively and judiciously go after waste, duplicative and underperforming programs, and even some nice-to-have initiatives we can no longer afford. Everything has to be on the chopping block. Not just non-security discretionary spending, but security spending, entitlements, and tax provisions, too.

We’ll see, but the early reporting on the President’s budget request is that there will be a five year freeze on non-security discretionary spending. Some cuts to education, science and research, and energy assistance, but boosts to high speed rail and other initiatives. And although it’s not in the budget, the administration has rolled out reforms for Fannie Mae and Freddie Mac , the troubled government sponsored mortgage giants. But these are all just proposals. It’s up to Congress to set the final funding levels.

Meanwhile, House Republican leadership is trying to finish the FY11 spending bills. The details aren’t clear, but to quell a rebellion in their own ranks they went from promising $74 billion in cuts to $100 billion in cuts almost all of which are in non-security discretionary spending. These range from a $1 billion cut at National Institutes of Health and $1.7 billion to the General Services Agency (GSA) buildings fund to $7.3 million from the Smithsonian. It’s hard to parse the exact impact because it’s based against the President’s FY11 budget request from a year ago , and as we stated before, that’s also just a proposal, not the reality of what was actually spent in FY10. Furthermore, it’s not clear what cuts the Senate and the President will go along with. Sheesh, we may be halfway through the fiscal year before federal agencies actually have a budget.

Let’s put all this rhetoric swirling the budget in perspective. Last month, the Congressional Budget Office predicted a $1.5 trillion budget deficit for FY11 . That’s against $3.7 trillion in predicted spending. Depending on how you count it, the non-security discretionary part of that budget is a little north of $500 billion. So if you eliminated every agency outside of Defense and Homeland Security, you would still be left with a nearly $1 trillion deficit. While it has to be part of the equation, we cannot balance the books on the back of non-security, discretionary spending. We have to look beyond. We have to make judicious cuts in security spending. We have to look at “tax expenditures” (tax breaks for everything from the home mortgage interest deduction to energy companies' overhead costs) that causes Uncle Sam to lose out more than $1 trillion in tax revenue each year. And we have to tackle the burgeoning fiscal crisis in entitlement spending. Most importantly, we have to do it efficiently and effectively so that we are left with a government that works.

Taxpayers for Common Sense has rolled up its sleeves and is ready to work . We expect Congress and the Administration to do so, too.

TCS Quote of the Week:

“Don’t blow smoke up my ass. There’s no time for it. There’s no patience for it. Okay?”

– Air Force Chief of Staff Gen. Norton Schwartz, who told contracting firms to stop “blowing smoke” and over-promising about what they can deliver. The Hill