This budget 'deal' looks even worse

The budget ‘deal’ being touted by President Donald Trump and House Speaker Nancy Pelosi will do nothing to solve the federal government’s fiscal issues. It’s more likely this ‘compromise’ is going to make problems even worse, especially once the debt markers are called in – whenever that happens.


One of the (if not the) biggest problems in the ‘agreement’ is the fact spending can go up without any worry about hitting some sort of artificial barrier.

2. The Agreement modifies the discretionary spending caps imposed by the Budget Control Act (“BCA”) for fiscal years 2020 and 2021 pursuant to the table below. The spending cap adjustments are intended to reflect the elimination of the BCA sequester for two years, plus a slight increase in spending for both defense and non-defense programs.

3. The parties agree to partially offset the Agreement’s modifications to the discretionary spending caps legislation by extending the BCA mandatory sequester and customs user fees to achieve a total offset level of $77.4 billion as scored by the Congressional Budget Office.

4. The debt limit will be suspended for two years, through July 31, 2021. No additional restrictions will be placed on the Secretary’s extraordinary measures authorities. The debt limit suspension, spending cap adjustments, offsets, and any necessary procedural matters, will be included as part of a single piece of legislation.

Supporters of the bill will say the offsets will help pay for any spending changes. However, this doesn’t appear to be the case if the number crunching by Committee for a Responsible Federal Budget is correct.

The deal reportedly also includes $55 billion of offsets, including extending the sequester on mandatory spending. These offsets would cover only a sixth of the direct cost of the bill and less than 5 percent of the ten-year impact. As a result, the plan would add roughly $1.7 trillion to the national debt, causing it to rise from 78 percent of Gross Domestic Product (GDP) this year to a projected 97 percent by 2029, compared to 92 percent under current law.


The number discrepancy from $55B in offsets versus the $77B Pelosi cities appears to be because CRFB is citing the part which will actually end up going into the deficit. It’s a clever little piece of number manipulation by Pelosi – and, more than likely, Trump – to make politicians feel ‘better’ about the amount of cash which is actually be saved. Plus, $77B sounds a lot better than $55B to voters.

CRFB’s policy analysts went a bit further in an email on how the $77B in offsets is not factual.

For instance, if some of the money in the first year gets allocated to a construction project or a long-term grant, the check might actually be written in year 2 or 3. “Outlays” represent what actually gets spent.

Much of the difference is that Congress is reducing spending in 2028 and 2029, near the end of the budget window used for estimating legislation. Some of the allocation that is being cut in 2029 wouldn’t have actually been spent until 2030 or 2031 – outside the window for scoring legislation. And some of the allocation might not ever have been spent at all, so those savings wouldn’t ever materialize.”

The ‘deal’ is indefensible no matter which way you slice it. Suspending the debt limit is a blank check, plus avoiding the sequester means we could see the deficit hit levels not seen since 2009. The CBO even warned debt could be at the highest in the nation’s history if Washington didn’t decide to actually do something about it.


Of course, the “do something” is what politicians tend to ignore. It’s much easier to essentially let things keep down the current financial road because any sort of change could lessen the chances of re-election. The fiscal sanity the so-called Tea Party rolled into Congress on in the 2010s has been replaced by politicians who conveniently forget their ideals when faced with an actual vote for lower spending. This is something no one should forget and constantly hammer their representatives on for failing to do.

The American public deserves a little bit of the blame for consistently re-electing so-called leaders who are able to continuously vote for the bare minimum – while railing on other hot button issues which may or may not matter in the grand scheme of things. It’s also possible the public really doesn’t care about spending unless they’re finding out their financial burden could increase over the short-term. Several friends of mine complained about the 2017 tax cuts reducing their overall IRS “refund” in April. Logic would dictate the “refund” would go down if the government was taking in less money paycheck to paycheck. Why no one considered it is beyond me, but not everyone gets invested in tax policy.

This deal is bad for Americans both now and in the future. Whatever economic greatness Trump is promoting would be much, much higher if government spending were much, much lower. The government would prefer people to think government expenses happen in a vacuum when the reality is much different. The bill will eventually come due when whoever owns the debt needs an infusion of cash. The fact it hasn’t is simply enabling politicians to keep spending more and more money.


Exit comment from Congressman Thomas Massie:

This isn’t going to end well. The only question is when.

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