WASHINGTON — There is something you should know about the deal to cut federal spending that President Obama signed into law on Tuesday: It does not actually reduce federal spendingHere's economist Russ Roberts:
By the end of the 10-year deal, the federal debt would be much larger than it is today....
“It does nothing to address the real drivers of our debt,” said Senator Tom Coburn, Republican of Oklahoma, explaining his decision to vote against the bill. “It eliminates no program, consolidates no duplicative programs, cuts no tax earmarks and reforms no entitlement program.”
According to the CBO baseline spending (go here, page 18), which I understand is the baseline for the cuts of $2.4 trillion, the Federal government will spend $46.1 trillion over the next ten years. So we’re going to go from 46.1 trillion over the next ten years to a mere $43.7 trillion?... For further perspective, in the ten years between 2002 and 2011, the Federal government spent $28.1 trillion dollars.I agree that not defaulting on our past obligations is a good thing, but do either of these descriptions make this deal sound like a win for champions of small government? Not a single program eliminated and spending reduced from $46 trillion to $44 trillion. What's left for Republican, but to declare victory and go home. The only thing missing from this deal was a 'Mission Accomplished' banner.
To those on the right who are mad at Speaker John Boehner because he cut this deal to raise the debt ceiling, I can only say the problem with Boehner is not this deal. It's that he's been in Congress since 1990, and since then the federal government has continued to expand. This is not to say that this is all Boehner's fault, but why would anyone believe that this time around John Boehner is willing and able to reduce the size and scope of federal government in any meaningful way. (To those on the left who think Boehner's deal "slashes" government spending, please see above.)
As part of Boehner's campaign to round up votes for the deal, he apparently sent around this slide show (pdf). I hope this was actually a joke and I just never figured it out because one of the slides includes this:
Failure to remain below these caps triggers automatic across-the-board cuts ("sequestration"). Same mechanism used in 1997 Balanced Budget Agreement.The national debt outstanding in 1997 was bout $5.5 trillion. By 2010 it was $13.5 trillion.
Wisconsin's Paul Ryan voted for this deal and so did my Congressman, Reid Ribble, whom I respect a great deal. In fairness to them, my preferred solution would have been to raise the debt limit with absolutely no strings attached and then work as hard as possible to actually reduce the size and scope of the federal government. This position is probably less politically viable than the agreement they ultimately reached, unpopular though it is.
I believe the debt ceiling had to be raised, I just wish it could have been done without giving so many people the utterly mistaken impression that this deal made the government smaller in the process.