Republicans and Democrats have come together on a “historic” budget deal that cuts federal spending by more than $2 trillion over 10 years. The Washington Post’s lead story calls the cuts “sharp” and “severe.”
However, the budget deal doesn’t cut federal spending at all.
House Speaker John Boehner has revised his budget plan in response to an unfavorable analysis by the CBO. The CBO has examined Boehner’s new plan and finds that it would cut spending by $917 billion over 10 years. Of the total, only $761 billion would be cuts to programs. The rest of the savings would be from reduced interest costs.
The USPS is proposing to close 3,700 post office locations across the country, as mail volume falls and the agency is losing billions of dollars.
House Speaker John Boehner is scrambling to revise his budget plan after the CBO found that it would only cut spending by $850 billion, not the $1.2 trillion promised.
These are the times that try budget analysts’ souls—especially budget analysts who’d like to see Washington dramatically cut spending. The debate over lifting the debt ceiling has produced a number of proposals from Capitol Hill—none of them have been worth celebrating. We can now add House Speaker John Boehner’s latest proposal to the pile.
I testified to the Senate Finance Committee today regarding federal spending and debt.
Here are some of the points I made:
Between the lines of a front-page Wall Street Journal article about farm subsidies [$] is an instructive example of the ratchet effect:
If it is true that a failure to increase the debt limit on August 2nd has the potential to bring about economic Armageddon, shouldn’t we be asking ourselves if it’s a good idea to allow the political class in Washington to continue collectively play God with our lives? After all, these people are fallible human beings.
An op-ed by Peter Singer and Michael O’Hanlon in today’s Politico questions the impact of spending cuts on the military. “Substantial defense budget cuts are possible, make no mistake,” the Brookings’ scholars concede, “But they could mean loss of capability, and some may increase security risks.”
My colleague Dan Mitchell discussed the good, the bad, and the ugly in the deficit reduction plan released by the bipartisan group of senators known as the “Gang of Six.” As Dan noted, the plan is more of an outline and a complete assessment isn’t possible until more details emerge. However, the fact that President Obama immediately embraced the plan ought to tell proponents of limited government all they need to know.
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