Beating the “Budget Cuts”
I know I’ve beaten and flayed this particular
horse unicorn (a unicorn is a mythical creature, just like actual government “cuts”), but I continue to stress that there are no “cuts” in the recent deficit deal because it undermines the hyperbolic sturm und drang being propagated by liberals like Froma Harrop who are calling Tea Partiers “terrorists” for supposedly “holding America hostage” while demanding “cuts”: Again, and slowly, there are no “cuts” to the budget in the deficit ceiling deal.
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 spending.
Indeed, both the government and its debts will continue to grow faster than the American economy, primarily because the new law does not address federal spending on health care.
That is the reason that the ratings agency Standard & Poor’s and its rivals still are threatening to remove the United States from their lists of risk-free borrowers, although the other agencies, Moody’s and Fitch, both said Tuesday that they would watch and wait for now.
That from the NY Times. Reason’s Jacob Sullum gives a bit more detail:
The debt deal, which authorizes the federal government to borrow another $2.1 trillion on top of the $14.3 trillion it already owes, supposedly includes “$2.5 trillion in cuts.” But as Sen. Rand Paul (R-Ky.) emphasizes, those are cuts from a projected baseline in which the national debt grows by $10 trillion during the next decade, which means “the BEST case scenario is still $7 trillion more in debt over the next 10 years.”
Paul also notes that the vast majority of the “cuts” are not scheduled to take effect for years, raising serious doubts about whether they will happen at all. “Why do we believe that the goal of $2.5 trillion over 10 years…will EVER be met,” he asks, “if the first two years’ cuts are $20 billion and $50 billion?”
Well, you might say, the debt deal is only the first step. But even at their boldest, House Republicans do not envision a federal government any smaller than it is now. Under the supposedly radical budget plan approved by the House in April, Cato Institute budget analyst Chris Edwards calculates, federal spending would rise by 34 percent during the next decade, compared to the 55 percent preferred by Obama. The budget would not be balanced until 2030, while the role of the federal government would be essentially unchanged.
Imagine the rhetoric if Tea Partiers were able to enact real cuts? Maybe we’ll find out after 2012.