House Republican Paul Ryan and Senate Democrat Pat Murray proudly emerged from crafting their back-room budget deal. Finally, an end to the dreaded “sequester” budget cuts that were promised to be so intense and so devastating that the sky might literally fall if they were enacted. Finally, an end to the threat of another government shut down when the continuing resolution passed in October expires in mid-January.
House Majority Leader Eric Cantor praised Ryan for “the hard work behind trying to get a deal in this divided government we’re in.”
Speaker John Boehner was so angry that conservatives in his caucus weren’t widely supporting the budget deal, he yelled “Are you kidding me?” at one point into a microphone at his press conference earlier today.
That’s funny. We think the question really should be asked of him and those who support the budget “deal” and think that something meaningful has actually been accomplished. Maybe a better question is “who are you trying to kid?”
The non-partisan Congressional Budget Office scores the deficit impact of the laws Congress passes. They evaluated this budget deal and reported the law would result in about $150 billion in deficit reductions. Over ten years.
Of course Representatives have two-year terms–meaning there will be five elections between now and the end of this projection. Even the Senate will go through nearly two full election cycles of its members during this timeline. What is the chance that the cuts enacted will be left in place? If you need a hint, the budget cuts that went into effect January 2, 2013 lasted until…well until about today, so not even a full year. What’s the likelihood that budget cuts enacted ten years from now actually remain in place?
This is the dishonesty of budget projections. All the budget pain is in the later years of the timeline. But politicians claim to have made “the hard choices” now and done “the hard work” now of getting a deal done today. They’re hoping you don’t notice when the cuts go into effect.
The “hard choice” made in the House today is to make NO change to the projected deficit in 2014. That’s right. Zero change. All changes take place after 2014. And we know 2014 is an election year, meaning in 2015, fresh faces in Congress may alter this budget blueprint at will.
The pie chart below shows the dollar value of deficit cuts in each year of the budget plan. Yes, 2014, the year when Congress could have actually enacted something that would stick, is zero. As each year passes, the likelihood of the cuts remaining in place drops–so we shaded the chart to reflect lighter pie slices until 2023 when the final slice is a pale white-green color.
Seventy cents of every dollar in proposed cuts won’t take place until after the 5 year mid-point (2019) of the budget plan. We won’t even have the same president by then. The remaining 30 cents in cuts will be realized between 2015 and 2019.
But the size of the cuts themselves are unbelievably small. Sure, politicians will claim to have cut the deficit by $150 billion (…*cough*overtenyears*cough*…)
But what does that mean? Even if every penny that is proposed to be on the budget chopping block remains on the chopping block, the size of the cuts is insignificant.
Over the same 10 year period where Republicans and Democrats are slapping each other on the back over their $150 billion in deficit reductions (…*cough*overtenyears*cough*…) your government is expected to spend some $46.6 TRILLION. Suddenly the $150 billion in reductions (your turn! *cough*overtenyears*cough) is little more than an insignificant rounding error–just 0.3% of funds to be spent.
We colored the area of the rectangle below green in a sea of red to represent the value of the cuts as a percentage of expected spending. You might need to zoom in to find the cuts.
This inability of Congress to address the country’s fiscal woes will lead to economic ruin in the form of crippling tax increases, inflation, and a damaged US Dollar in foreign currency markets. These effects in turn limit the freedom we have to enjoy a fruitful and prosperous lifestyle as we have less disposable income, must pay more for basic goods and services with the money the government was gracious enough not to tax, and an inability to afford goods and services that are not produced here.
All of which begs the question of Speaker Boehner and those who voted for the measure, “Are you kidding us?”