By USDR. Source: House Budget Committee
With both the Congress and the White House getting among the lowest approval rankings in history, it was with much fanfare that Congressman Paul Ryan (R-WI) and Senator Patty Murray (D-WA) discussed a budget compromise that will avoid major shut down for at least two years (according to both of their offices). The big question is whether their colleagues will be impressed.
“I’m proud of this agreement,” said Chairman Ryan. “It reduces the deficit—without raising taxes. And it cuts spending in a smarter way. It’s a firm step in the right direction, and I ask all my colleagues in the House to support it.”
“This agreement breaks through the recent dysfunction to prevent another government shutdown and roll back sequestration’s cuts to defense and domestic investments in a balanced way,” said Chairman Murray. “It’s a good step in the right direction that can hopefully rebuild some trust and serve as a foundation for continued bipartisan work.”
The “Bipartisan Budget Act of 2013” would “set overall discretionary spending for the current fiscal year at $1.012 trillion—about halfway between the Senate budget level of $1.058 trillion and the House budget level of $967 billion. The agreement would provide $63 billion in sequester relief over two years, split evenly between defense and non-defense programs. In fiscal year 2014, defense discretionary spending would be set at $520.5 billion, and non-defense discretionary spending would be set at $491.8 billion.”
The sequester relief is fully offset by savings elsewhere in the budget. The agreement includes dozens of specific deficit-reduction provisions, with mandatory savings and non-tax revenue totaling approximately $85 billion. The agreement would reduce the deficit by between $20 and $23 billion.
The House of Representatives is expected to take up the Bipartisan Budget Act first, followed by the Senate. If this bill is signed into law, the appropriations committees will then be able to work on spending bills at an agreed-upon level in advance of the January 15th deadline.
The Heritage Foundation, which is one of the country’s most influential conservative think tanks, was not impressed with the proposal and offered a scathing critique almost immediately. Here is what they posted:
Many had high hopes that the first budget conference in four years would make a substantial down payment toward fixing the U.S. spending and debt crisis. The new “Bipartisan Budget Act” thoroughly disappoints. While we dig through the details for a more complete assessment, here are three key facts on the sour deal:
1. It busts through supposed spending “caps.” The way Congress operates, it’s ridiculous for Members to set spending caps. They just keep busting right through them. The deal announced yesterday raises discretionary spending above the bipartisan spending agreement forged in 2011 as part of the Budget Control Act. Spending for defense and non-defense domestic programs would be raised by $45 billion in 2014 and by $18 billion in 2015.
Once again, Congress has fallen into its old and destructive habit of trading more spending in one area for more spending in another. This is a bad “compromise” that keeps increasing spending, when just a little more effort to eliminate bad government programs and reducewasteful spending could have saved taxpayers money instead.
2. It taxes and spends. The agreement says that the increased spending is fully offset elsewhere in the budget, using a mix of spending cuts and non-tax revenue. Make no mistake, raising revenue to spend more is simply taxing and spending. If anything, automatic spending cuts could be exchanged for targeted spending cuts. Trading spending cuts for more revenue, however, grows the burden of government. After all, Washington suffers from a spending problem, not a revenue one.
3. It spends now and delays savings till later. The budget deal would spend $63 billion more over the next two years—but take 10 years to make up for this splurge. This is a common Washington gimmick. To the conferees’ credit, the deal suggests one-third in additional deficit reduction—the details of which remain to be evaluated.
The budget conferees failed to make substantive reforms to the real drivers of spending and debt: the entitlement programs. Representative Paul Ryan (R-WI) and Senator Patty Murray (D-WA) forged a deal that would increase spending immediately, while delaying deficit reduction till later and trading spending cuts for more revenue. Far from simply being another missed opportunity, this deal keeps the nation on its fiscal collision course.
The Following is for further research from the House Budget Committee.
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