Beltway politicians like to pretend that smaller spending increases amount to spending “cuts.” As Dan Mitchell has pointed out numerous times (see here for one example), that’s baseline budgeting baloney. Now that the 2011 Budget Control Act’s spending caps are in place, politicians are making an even more ridiculous claim: the so-called “cuts” have already occurred.
To save America from the supposedly “savage” and “draconian” budget cuts caused by sequestration, President Obama has instead asked Congress to approve an alternative fiscal package containing additional tax increases.
The odds that $85 billion in “unthinkable, draconian” sequestration spending cuts will go into effect in March as scheduled are looking better. The odds must be getting better because, as if on cue, the horror stories have commenced.
It’s my job to advocate for spending cuts. It’s a job I’ve been doing in one form or another for over a decade. If I’ve ever experienced a victory, it must have been a pretty small one, because I can’t recall any.
So why do I persist?
Speaker Boehner says that the House will not pass another increase in the debt ceiling unless the White House and congressional Democrats agree to cut spending by an equal or greater amount. That’s the same line in the sand that Boehner drew during the previous debt ceiling showdown in 2011.
One of the few things that politicians in the United States are good at is dealing with a problem by kicking the can down the road. That’s what happened in August 2011 when Republicans and Democrats reached an agreement to avoid breaching a statutory ceiling on the federal government’s mounting debt.
After last night’s debate, I watched the postgame on the Fox News Channel. They had some problems with their fact checking.
Two months ago, Cato published a study by economist Benjamin Zycher, a senior fellow at the Pacific Research Institute, that showed that military spending contributes very little to GDP growth, and concludes that cuts would have very little long-term impact on GDP. On the contrary, Zycher estimates that cuts on the order of $100 billion a year would reduce costs in the wider economy by $135 billion per year. I wrote about that study when it was published here.
Following the House’s passage of a six-month continuing resolution last week (my comments on the CR here), House Appropriations Committee Chairman Hal Rogers (R-KY) chatted about fiscal policy with a couple of reporters on C-SPAN. The interview did nothing to change my 2010 opinion that the House leadership handing Rogers the chairman’s gavel was “about as inspiring as re-heated meatloaf.”
Back in May, I said that Congress would avoid the ‘fiscal cliff’ by agreeing to some sort of deal that would effectively kick the can down the road (yet again). According to Politico, a group of Senators are considering a can-kicking idea that immediately brought to my mind the movie Groundhog Day: