Paul Ryan's budget conference: beware of fake cuts

Rep. Paul Ryan might lend his name to a budget deal with Sen. Patty Murray that’s set to come out of conference at the end of this week. One of the items high on the agenda is a way to repeal-and-replace budget cuts scheduled to take effect due to sequestration. That totals $109 billion in 2014 alone, and it’ll take a lot to get to an equivalent amount of deficit reduction. Democrats, of course, want to replace some of that with tax hikes, but it’s important to take note of how it might also cut spending.

The Committee for a Responsible Federal Budget says to be wary of fake spending cuts like time-shifting and double-counting:

Lawmakers may be tempted to reduce the size of the sequester cuts in the near-term by shifting the cuts later in the decade. While some amount of “smoothing” might make sense in the context of a permanent sequester relief plan, simply trading cuts today for even deeper cuts tomorrow would have little credibility… this sequester shifting could lead to a continuous cycle in which Congress continues to avoid current cuts by pushing them to the future in perpetuity.

Lawmakers must avoid relying on budget gimmicks to offset sequester relief, claim savings for deficit reduction, or hide the true costs of their decisions. Considering the long-term trajectory of federal debt, lawmakers will need to undertake serious and difficult steps to improve our fiscal situation.

One of President Obama’s favorite fake savings is to claim drawing down from overseas military operations as a saving. The way the federal budget is accounted, the most recent year-long cost of our military deployments in Iraq and Afghanistan (called “overseas contingency operations”) is assumed to be spent every year in perpetuity. It’s unlikely that the cost of our military support overseas will equal our 2012 budget, but President Obama’s budget proposal just last year claimed over $800 billion in “war savings” – and used that money to expand spending on other favored programs.

Rep. Paul Ryan would deal a massive blow to his own credibility as a deficit hawk if he lends his name to a budget full of gimmicks and illusory savings. It’s becoming more likely that the shape of this budget will be less about actually putting legislation into place and more about political posturing. Rep. Paul Ryan’s role in the budget conference will say a lot about his political career in both the short- and long-term.

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