There are still plenty of details to be worked out with the budget deal, but based on what we know about its top-lines, I put together the following chart to show the impact it will have on overall federal spending in FY2011:

Notice that spending actually goes up in FY2011 compared to FY2010? That's because despite cuts in discretionary programs, increases in mandatory programs will drive spending higher. In fact, excluding TARP, spending will go up by 2.9%—about $103 billion. Yay, tea party!

You may wonder how I came up with the numbers in these charts. Well, the historical numbers are from CBO's Budget And Economic Outlook of January 2011. The 2011 numbers used CBO's figures as a baseline, but took into account what we know about the deal:

The overall package of cuts amounts to $38.5 billion. Defense spending will increase by about $4 billion, so foreign and domestic spending will actually drop by $42.5 billion. Foreign and state department funding will go down $8 billion. Of the $34.5 billion in remaining cuts, $17 billion will be so-called CHIMPs—changes in mandatory programs—meaning $17.5 billion will come from domestic discretionary programs.

Based on the above details, I simply adjusted the defense, foreign, and domestic discretionary numbers from 2010 levels by the appropriate amounts (+4, -8, and -17.5, respectively). I used CBO's projection for FY2011 mandatory spending, less TARP, as a baseline and subtracted the budget deals $17 billion in cuts from CHIMPs.

You'll also notice that I excluded TARP from the chart. If I had included it, FY2011 spending would have gone up by even more relative to FY2010, but not for the reason you think. Because TARP is a credit program, loan repayments in FY2010 made spending levels seem lower than they were, while the loans, when made in FY2009, made spending seem higher than it actually was. So while TARP actually added to the deficit in FY 2009, it reduced the deficit in FYs 2010 and 2011. See this CBO document for more detail.

So with all the boring stuff out of the way, for amusement's sake, let's compare what things would have looked like had we simply frozen FY2010 discretionary spending levels (and not had the $17 billion in CHIMPs).

Looks an awful lot like the first chart, doesn't it? (If you're really sick, check out this overlay I did of the two charts. It's sure to drive a teahadist nuts.)

Bottom-line: $38.5 billion is real money, but it's still a 1% decrease in what we would have otherwise spent in FY2011, and overall, spending is still increasing. It's not exactly a great day for Keynesian economics, especially given some of the rhetoric Democrats are throwing around, but it's worth remembering that if tea partiers really set out to actually cut government spending, they've already failed in their first test.