Even with more the details of the deal released early yesterday morning, the exact numbers are still shrouded in confusion, but it is clear the cuts are much less than meets the eye — the gimmickry is not merely around the edges.
The $38.5 billion includes real cuts, but also a dog’s breakfast of budgetary legerdemain. According to the Associated Press, the deal purports to save $2.5 billion “from the most recent renewal of highway programs that can’t be spent because of restrictions set by other legislation.” It gets another $4.9 billion by capping a reserve fund for the victims of crime that also wasn’t going to be spent this year — a long-standing trick of appropriators. The Washington Post reports that a notional $3.5 billion cut from the Children’s Health Insurance Program “would affect only rewards for states that make an extra effort to enroll children. But officials with knowledge of the budget deal said that most states were unlikely to qualify for the bonuses and that sufficient money would be available for those that did.” And so on.
There’s realism and then there’s cynicism. This deal — oversold and dependent on classic Washington budget trickery — comes too close to the latter. John Boehner has repeatedly said he’s going to reject “business as usual,” but that’s what he’s offered his caucus. It’s one thing for Tea Party Republicans to vote for a cut that falls short of what they’d get if the controlled all of Washington; it’s another thing for them, after making so much of bringing transparency and honesty to the Beltway, to vote for a deal sold partly on false pretenses.
The Washington Examiner's Philip Klein, another early supporter of the package, also pulled an about-face based on the new data:
On the night the budget deal was struck to avert a shutdown, I argued that it was a deal that conservatives should be happy about. In light of further details that have emerged, I would no longer make such a statement.
Today, the Associated Press reports on a new Congressional Budget Office report showing that the deal that purported to slash spending by $38.5 billion for the remainder of the year, really only reduces outlays by a fraction of that amount, and only cuts this year's deficit by a mere $352 million. If the $38.5 billion was chump change in the context of $14 trillion debt, I wouldn't even know what to call $352 million. Bread crumbs, maybe?
John McCormack at The Weekly Standard is pushing back against conservative apoplexy over the deal, citing a Politico story that puts the numbers in a more favorable context:
[W]hen CBO estimated the initial House bill in February, it projected that the $61.3 billion in nonemergency appropriations cuts would result in $9.2 billion in outlay reductions by Sept. 30 when measured against comparable outlay estimates two months earlier, on Dec. 20.
By comparison, the precise appropriations cut now, $37.7 billion, translates into a vastly smaller sum, $352 million, using the same standard.
A more accurate picture can be drawn by separating out the annual Pentagon portion of the bills.
When this is done, the House bill in February can be seen as having truly proposed to cut more than $68 billion from largely domestic and foreign aid appropriations. The resulting 2011 outlay reduction forecast by CBO was about $18 billion — a roughly 4-1 ratio.
By comparison, the deal now cuts $42 billion from non-Pentagon accounts, but the outlay reduction is about $8.2 billion — a 5-1 ratio.
In other words (I think), despite all the gimmickry, the deal does include the authority to reduce federal spending by tens of billions moving forward. Because of the way CR's are structured, the immediate amount of 2011 deficit reduction was always going to be comparatively paltry to the overall number -- and that most of the cuts will trigger beyond FY 2011. Boehner's office is circulating its own take on the new CBO estimates that sparked such an outcry last night:
- Will reduce budget outlays by $20-25 billion, clearing a path for the Path to Prosperity budget put forth by Budget Committee Chairman Paul Ryan (R-WI), which cuts trillions more.
- Will immediately reduce budget authority by nearly $40 billion versus fiscal year 2010, stripping the Obama Administration of its “license to spend” nearly $40 billion that could otherwise have gone to government programs and projects. This is $79 billion less than the President’s original request.
The above numbers have been reaffirmed by CBO, reinforcing congressional estimates indicating that the bill will cut hundreds of billions of dollars from the federal budget over the next decade – an estimated $315 billion in deficit savings over 10 years.
House Republican leadership will rely on this interpretation of the deal prevailing among their caucus when the vote occurs later this afternoon. Boehner and Cantor are sounding pretty confident about their whip count, although Democratic votes
UPDATE: CNN's Dana Bash is reporting that given the concerns and confusion among rank-and-file Republicans over the swirling reports about the CR, respected former CBO director Douglas Holtz-Eakin has been summoned to the Hill to brief members on how the cuts are structured. For GOP leadership seeking to allay conservative concerns, this seems like a much better approach than implying that reticent members are traitorous.
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