CBO scores Boehner’s new bill: $22 billion in savings this year, $917 billion over 10 years

posted at 7:32 pm on July 27, 2011 by Allahpundit

A modest improvement, but let’s face it: At this point, no one’s supporting the bill on its merits. If you’re backing it, it’s because it’s the best we can do to avert a default right now and because, if it passes the Senate somehow, it would force The One to choke on his quasi-threat to veto any short-term deal at the last minute. There’s some fun in that, I suppose.

The new bill does, at least, keep his promise to produce savings in an amount greater than or equal to the amount of the debt-ceiling increase, which will be $900 billion if this is enacted. It’s hard to get excited about the difference between $1 billion in savings next year, which the old bill provided, and $22 billion, which the new one ensures, when we’re running multitrillion dollar deficits. But Yuval Levin makes a fair point. The lower we can get CBO’s baseline now, the deeper future Congresses will have to cut to sell their proposals:

These are still very small numbers in the scheme of federal spending, but the greater front-loading actually matters a lot. One reason is that the 2012 and 2013 budgets are the only ones that will actually be under the control of this congress. But even more important is the greater reduction of the baseline itself since, as we’ve witnessed in the past 24 hours, the CBO baseline is the measure of all future cuts—it sets the bar. This debt limit fight has set a precedent that from now on increases in the debt ceiling will need to be accompanied by equivalent cuts in spending, and those cuts will be measured by the CBO baseline, so cutting it by this much in the first two years will really shape the next round of the budget wars, which will come very soon. Front-loaded cuts have a kind of ratchet effect. And the larger cuts to the baseline in the following years (the revised bill’s cuts are larger every year than the original bill’s cuts) matter for the same reason—even if they don’t fully materialize (since one congress can’t bind another), they define the measure of future spending in every round of budget debates, which means that they make all future cuts larger in real terms.

Reid’s bill would produce $30 billion in savings this year, but guess where that comes from. Right: The phantom “savings” from winding down in Iraq and Afghanistan. Which, contra Levin, reminds us that it’s not that hard to beat those CBO baselines with a creative gimmick or two.

As of early evening, another member of the Cut, Cap, and Balance coalition has peeled off to join Allen West in supporting Boehner’s bill. And Darrell Issa, on a conference call with bloggers, thinks they have the votes — sort of. Exit quotation: “I don’t think all the people whose votes we have yet know it.”

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Reid’s bill would produce $30 billion in savings this year, but guess where that comes from. Right: The phantom “savings” from winding down in Iraq and Afghanistan.

And why can’t Boehner throw those into his bill?

Esthier on July 28, 2011 at 10:34 AM

Reid’s bill would produce $30 billion in savings this year, but guess where that comes from. Right: The phantom “savings” from winding down in Iraq and Afghanistan.

And why can’t Boehner throw those into his bill?

Esthier on July 28, 2011 at 10:34 AM

It could be that he knows their phony and simply won’t contribute to Reid’s hypocrisy.

rplat on July 28, 2011 at 11:20 AM

This debt limit fight has set a precedent that from now on increases in the debt ceiling will need to be accompanied by equivalent cuts in spending

This is an out-and-out lie.

There is no equivalency between a 900 billion dollar increase in debt that happens immediately and is expected to be eaten up by April and 917 billion as-of-yet undefined cuts that mean absolutely nothing as of January 2013.

And keep in mind, there is no way we can possibly believe even that first 22 billion in cuts will even happen. Given the most recent history, that number will end up being $3.50.

runawayyyy on July 28, 2011 at 11:23 AM

And the band plays on………

grapeknutz on July 28, 2011 at 11:53 AM

I’ve been crunching the numbers and DarkCurrent has some valid points. If you’re talking about cutting 40% of the budget, there’s simply no place to do it quickly. Now, we could certainly cut about ten percent right away by cutting discretionary spending in half. With that 10% in hand – some $330 billion – we can avert calamity for months. But at the end of the day, there needs to be a real plan that almost certainly involves reducing entitlement spending.

Here’s one set of factoids. There are currently nearly 60 MILLION people on Social Security and/or disability. That’s about one out of five Americans. Their average monthly stipend is about $1000. Looked at another way, a family of four is on the hook for nearly $800 a month to support their fellow Americans on SS. And that’s with today’s demographics of roughly 4.6 working age adults per retired person. The numbers only get worse as the population ages.

And the expenditures are rising, tens of billions a year. And the only way to reduce the number is by reducing the number of beneficiaries and/or reducing the benefits. Nobody, and I mean nobody wants to be on the hook for reducing existing benefits.

Will it be easier with a Republican Senate and White House? Probably. But it will most definitely be easier with a Conservative administration and Congress, so maybe, just maybe, it makes sense to give a little on the debt ceiling and focus on the 2012 elections. I hate sounding squishy; I’m as ardent a TEA Party supporter as you can get. But the reality is that it may be time to start focusing on the election. Cut a significant portion of discretionary spending, raise the debt ceiling only to support what’s already been promised, defund any new expenditures, and start NOW on a plan to be implemented in 2013.

And then, even if the elections go sideways (remember, anything can happen – Stuart Smalley is a Senator), we have a plan.

AJsDaddie on July 28, 2011 at 12:02 PM

And the expenditures are rising, tens of billions a year. And the only way to reduce the number is by reducing the number of beneficiaries and/or reducing the benefits. Nobody, and I mean nobody wants to be on the hook for reducing existing benefits.

AJsDaddie on July 28, 2011 at 12:02 PM

You admit benefit expenditures are rising at an unsustainable rate, then admit no one wants to fix it for political reasons. You are correct on both counts. But it doesn’t matter anymore, we’re broke.

The recipients will have to take a cut in benefits, and means testing will have to be implemented. The good news is that we’re talking about the wealthiest demographic in the history of the planet, the American senior citizen. Between the 2 fixes you outlined, this will actually be pretty easy. The tough one is medicare.

runawayyyy on July 28, 2011 at 1:32 PM

Agreed, runaway. I just think we have a better chance of doing that with a Conservative administration and Congress. I can only imagine the demagoguing that will ensue from the Liberal punditry when we as a country start to address these stark realities.

And you’re right, Medicare is an even bigger gorilla in the room. Check out the NHS across the pond (the folks we’re supposed to be looking to as our shining examples). They’re going to ration cataract surgery, hip replacements and even tonsillectomies. That’s whart we’re going to see on a bigger scale.

NHS Begins Rationing Standard Procedures

AJsDaddie on July 28, 2011 at 2:04 PM

Comment pages: 1 2 3