Americans understand that this summer’s debt deal was baloney. They know the Washington Establishment is incapable of doing the right thing now, which is why they do not trust promises that stretch over the next decade. And after just a few months, their worst suspicions have been confirmed: despite all the talk, government spending is on the rise!
This is the real, untold story; just three months after striking a “historic” deal to reduce America’s debt and cut spending, the Washington Establishment lost its collective will to tackle our nation’s most pressing problem and instead reverted to its old, wasteful habits.
The failure of the so-called “super committee” confirmed what most of us knew from the start; the Budget Control Act (BCA) would not work as advertised. In exchange for increasing the nation’s credit limit by a record $2.1 trillion, Americans received a promise that Washington would reduce the amount of debt it planned to accrue over the next ten years by the same amount.
Of course, Washington’s penchant for profligate spending means they will blow through their newly extended credit limit in less than 18 months. They will then spend the next 102 months trying to “offset” their newly acquired debt. In Washington, however, reducing “future debt” is not necessarily synonymous with reducing spending. And through it all, Washington will continue to borrow.
We were led to believe this summer’s deal marked the end of Washington’s blank check culture. From a rhetorical standpoint, it did. The popular outrage over our nation’s unsustainable debt forced the Washington Establishment to come to terms that their reckless spending was driving our country to the brink.
Unfortunately, as is often the case in Washington, strong rhetoric obscured less than virtuous actions. As many dissenting lawmakers and Americans noted at the time, we cannot guarantee that future congresses will actually make the reductions promised by the current congress. Absent a constitutional amendment, future congresses will act with very little regard for what a previous congress considered important.
What is even more amazing is that the current congress appears to be ignoring what they themselves deemed important: cutting spending. As the experts at The Heritage Foundation note, once all the gimmicks are accounted for, discretionary spending will actually increase in 2012.
The numbers are stunning and by design a bit convoluted to make scrutiny difficult.
For fiscal year 2011, base discretionary spending totaled $1.049 trillion. The authors of the Budget Control Act are quick to point out they capped base discretionary spending for fiscal year 2012 at $1.043 trillion. Using those numbers, the BCA appears to bring about $6 billion in real cuts in fiscal year 2012.
Here is the catch: the BCA also included an additional $10.4 billion in so-called “disaster relief” spending. Therefore, the correct baseline to use is base discretionary spending plus “disaster relief.” For fiscal year 2012, that number comes to $1.053 trillion. For fiscal year 2011, it was $1.052 trillion.
Only Washington could claim with a straight face to enact $6 billion in real cuts while actually increasing spending by $1 billion.
The duplicity is as outrageous as its cause. Much of the $10.4 billion in “disaster relief” is aimed at recovery efforts from previous disasters. Rather than budgeting for these known expenses under the BCA caps, the backroom dealmakers decided to move them off budget to hide the deal’s real costs.
By way of comparison, the House-passed budget authored by Representative Paul Ryan (R-WI) included zero dollars in faux “disaster relief” spending and capped base discretionary spending for fiscal year 2012 at $1.019 trillion. While still above pre-stimulus levels, it represented a solid step in the right direction.
Washington is not going in the right direction, though. With his request for another $1.2 trillion in debt authority, President Obama confirms the debt deal simply enabled Washington’s bad habits. It was akin to giving an alcoholic a wad of cash in a bar because he promised he would not spend it all that night and he would go to rehab sometime soon.