Analysis: Budget deal only reduces real discretionary spending by around $15 billion

posted at 4:17 pm on April 12, 2011 by Allahpundit

See this AP piece for the grim details. Quote: “[T]he cuts that actually will make it into law are far tamer, including cuts to earmarks, unspent census money, leftover federal construction funding, and $2.5 billion from the most recent renewal of highway programs that can’t be spent because of restrictions set by other legislation.” Another $4.9 billion comes from a Crime Victims Fund that wasn’t going to be spent this year anyway.

Based on the number of Republicans who voted no and Democrats who voted yes on the short-term funding resolution passed late last week, Boehner’s got something like a 40-vote cushion for Thursday’s House vote on the package. How much of it will be left after this starts making the rounds?

The specifics show that finding nearly $40 billion in cuts during the 2011 fiscal year required clever accounting and, for the White House, a willingness to concede on rhetoric to find gains on substance.

For example, the final cuts in the deal are advertised as $38.5 billion less than was appropriated in 2010, but after removing rescissions, cuts to reserve funds and reductions in mandatory spending programs, discretionary spending will be reduced only by $14.7 billion.

White House officials said throughout the process that the composition of the cuts was more important than the top-line number, and that including mandatory cuts allowed that top-line to grow while limiting the immediate impact of the cuts.

The move also keeps the 2011 discretionary baseline slightly higher, a terrain advantage for the Democrats heading into the 2012 spending process.

The overall spending baseline for the year will still end up being $773 billion higher than it was in 2008, before TARP was enacted and our Keynesian adventures began. (Even the deepest cuts demanded by Republicans didn’t imagine a return to that level this year.) The bill does eliminate four of Obama’s czars, as Ed noted this morning — but those positions were already being phased out.

John Podhoretz surveys the scene and wonders if freshmen Republicans won’t be so angry at the specifics of the deal that we’ll end up with a shutdown after all. The short-term resolution that they passed on Friday night expires this Thursday, so if the initial vote fails in the House on Thursday morning, that could spell the end. Podhoretz:

Already there are indications that a great many House members are going to vote against the deal. What we don’t know, or can’t know, is whether grass-roots velocity has sped up to such a degree over the past several years that we could be looking at a major meltdown of support when the votes are cast, as Republican members honestly balk at the clear deceit of the negotiators in making non-existent cuts in federal spending—and as they fear the wrath of the voters (particularly tea partiers). Meanwhile, Leftist Democrats who feel betrayed by Barack Obama and Senate Majority Leader Harry Reid might also decide to teach them a lesson by withholding support.

And then, all of a sudden, there will be a shutdown. And no plan to end it. And make no mistake—the public will blame the GOP.

All of this makes perfect sense from the Democrats’ perspective. It’s win/win. If Boehner can convince his caucus to suck it up and vote yes on the package anyway, great — Obama and Reid get to claim credit with independents for being newly minted deficit hawks or whatever while conceding a scant $15 billion in real cuts. If Boehner can’t convince his caucus to suck it up and the vote fails in an eleventh-hour revolt, great — Obama and Reid get to blame the GOP for shutting down the government by rejecting a deal that was, after all, approved by John Boehner himself. Voters are already more likely to credit Democrats for last week’s compromise than Republicans, so the GOP goes into this as the “stubborn” party; and according to Pew’s eye-popping poll this morning, Americans are also already plenty disgusted with the budget standoff. If the deal falls apart and the government shuts down, there’s a severe risk that that disgust will land squarely in the GOP’s lap.

So the specifics make this an obviously good deal for Democrats — but what were Boehner and his deputies thinking in signing off on it? Are they simply stuck at this point, having already agreed to a climactic compromise last week, and desperate to get the 2011 budget off the table as The One delivers his big response to Paul Ryan tomorrow and the debate shifts to entitlements? Maybe they’re counting on the fact that the caucus simply won’t be willing to desert Boehner with a gigantic vote coming soon on the debt ceiling. He needs all the leverage he can muster to extract concessions in those negotiations with Reid and The One; if this vote collapses in the House and we end up in a shutdown with the GOP bearing the brunt of the blame, he’ll be crippled. No doubt Boehner’s selling this deal to them in those terms too, especially since Hoyer’s being cagey about how many Democratic votes will be there in the end. As much as Pelosi’s caucus might want to protect Obama by approving a compromise that he’s blessed, if they think the party can do better by letting the government shut down, they may very well decide to abandon Boehner and let him choke on the result. Gonna be an interesting couple of days.

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Obvious the GOP meant it when they said they learned their lessons from 2000-2006.

F the GOP.

Clark1 on April 13, 2011 at 11:34 AM

So you’re saying it wasn’t massive government spending that stimulated the economy, it was massive government spending that stimulated the economy.


crr6 on April 12, 2011 at 4:56 PM

1920 Depression: Lasts 18 months, no government spending
1930 Depression: Lasts 10 years, lots of government spending

No, it was government spending alright… that caused a Depression (as experienced by the rest of the world) to turn into a GREAT Depression (as experienced by us) that lasted 10 years.

Pop Quiz… Which would you prefer?

dominigan on April 13, 2011 at 12:02 PM

Oh, and before the word lawyer starts correcting, by “government spending”, I mean “government stimulus spending”

dominigan on April 13, 2011 at 12:03 PM

>improved the economy until the Democrats were elected in >2006 and started their drunken spending binge.

FACT: During Bush’s first six years, federal spending increased by nearly 40%. When the Dems took control of one legislative branch in 2006, federal spending increases actually declined in size.

Bush spent too much. We all know this. The Democratic Congress spent much, much more. This is a matter of actual fact.

It’s also a matter of actual fact that the economy was much better during Bush’s first six years, and that it started going downhill after the Democrats were elected.

I’m not even discussing how the Democratic Congress refused to allow reforming Fannie Mae when it was clearly causing a badly-inflated housing bubble. I’m sticking with the simple subject of tax increases or cuts and their effects on the economy.

And on that subject, the Bush tax cuts led to an improved economy, exactly as I indicated.

Keep in mind that your’e being very selective in presenting facts across the board You name administrations that lowered taxes and simultaneously created massive federal deficits that largely contributed to today’s problems.

Every time taxes were cuts, overall tax revenue increased. So how exactly did the tax cuts contribute to massive federal deficits, if they brought the government more money?

You also fail to mention the numerous situations where higher taxes were accompanied by strong growth, such as the tax hikes enacted by President Clinton. I’m not saying that tax cuts stimulate economic growth because, obviously, the opposite is generally true. What I’m saying is that many variables affect the nation’s economy, and even Alan Greenspan supported Clinton’s tax increases to reduce the national debt as a long-term benefit to interest rates.

Foolish, since the tax increases did not reduce the deficit. Clinton takes credit for a balanced budget, but it was balanced before the first budget he proposed even went into effect. That is, he announced a balanced budget in, as I recall, April or May of 2001. Clinton had been in office for about 3 months or so. His first budget was proposed during this time frame, and actually went into effect in October of 2001. Unfortunately, the media is full of economic illiterates who gave him full credit for the deficit reduction that was begun by Reagan and completed under Bush 41, all the while Clinton was calling it, “The worst economy in 50 years.”

You can come up with endless reasons why today’s historically low taxes are perfectly acceptable in an era of record deficits. It’s not even that you need to make a personal sacrifice, since the tax rates that need to increase will affect only the wealthy.

bayam on April 13, 2011 at 1:50 AM

Classic liberal “thinking.” Clinton proposed an increased tax on yachts, which would surely be the perfect example of a tax that only affects the very wealthy. The effect was to nearly destroy the yacht industry, which employed people who couldn’t afford to buy yachts themselves, but were paid to produce them. So this tax that would “affect only the wealthy” put people out of work.

Moral: Keep liberals away from business. They break things because of their simplistic answers.

tom on April 13, 2011 at 12:39 PM

The dems give Boehner the boner once again. These repubs are pathetic. If the dems ever start embracing true conservatism I am going to switch parties because at least they know how to win.

jistincase on April 13, 2011 at 2:52 PM