Last week the long-awaited budget deal created by the House and Senate conference committee was made public. The deal fell far short of what is necessary for America to avoid a fiscal crisis, and even fell short of the low expectations fiscal conservatives have for Congress’ ability to reduce spending.
In short, the deal increased spending, raised fees, and eviscerated the sequester — the latter being the first deficit reduction measures Congress has implemented in over a decade, and the cause of discretionary spending going down for the first time in decades.
Over the weekend, it was revealed that the deal is even worse than expected. From Matthew Boyle of Breitbart:
“Ryan’s (R-Wisc.) claim, for instance, that this plan ends up resulting in $23 billion in total deficit reduction is not true. Ryan and Murray did not ask the Congressional Budget Office (CBO) to estimate interest payments on the $63 billion in increased spending that will need to be borrowed for the first couple of years of the budget. As such, the CBO score does not represent the full financial picture of the plan.
“A Senate GOP aide with direct knowledge of these matters whom Breitbart News contacted estimated the interest payments over the course of the 10-year budget window on the $63 billion that will need to be borrowed to be approximately $8 billion. That means the plan increases spending by $71 billion and only includes $15 billion in deficit reduction in the out years of the budget window.
“When asked to respond to why Ryan did not seek a CBO score that included an estimate of the interest payments on the borrowed money, Ryan spokesman Will Allison told Breitbart News that the ‘CBO does not as a matter of course include debt service in its cost estimates of legislation.’”
In other words, they did not ask the CBO for an accurate picture of the costs and alleged savings in the budget deal. Even worse — and what a senior Senate aide told the Coalition to Reduce Spending — is the deal functionally fails to offset over $8 billion in new spending.
Specifically, according to the aide, the budget deal offsets a two-month “doc fix” worth $8 billion. The offset for this spending doesn’t take place until near the end of the 10-year budget window CBO calculated for the budget deal. And since it does not include interest payments, the cost will be well above $8 billion.
Technically, the budget deal offsets the near-term spending with long-term cost offsets. However, given that Congress — led by the not-so-fiscally-conservative Chairman Ryan — is overturning sequestration a mere 28 months after it became law, trust in Congress to uphold past spending cuts is clearly foolish. Related, from a purely legal perspective, no Congress is held to a past Congress’ legislation, and may change it at any time through new laws.
In all, this means the budget deal shaves less than $7 billion from deficits over a 10-year period.
The argument by many fiscal conservatives who support this budget deal is that it helps Republicans with the 2014 elections by avoiding another shutdown fight and doesn’t raise taxes (though it does raise fees). The question to ask now is whether awaiting electoral victory before doing what’s right and necessary — reducing spending — is a worthwhile strategy, especially given the inherent dishonesty in this ever-worsening budget deal.