This is your semi regular reminder that our years long focus on the deficit in the face of very high unemployment and tepid growth is both terrible and stupid, having resulted in needless suffering by many.
Posts Tagged ‘federal budget’
I’m just going to pass along this Kevin Drum post in its entirety:
This is just a quick arithmetic reminder. If the sequester goes into effect, here’s how we’ve done on deficit reduction over the past few years:
2010 continuing resolutions: $450 billion
FY2011 budget: $200 billion
Budget Control Act: $960 billion
Fiscal cliff deal: $840 billion
Sequester: $1.2 trillion
Total: $3.6 trillion
The original Simpson-Bowles plan, which is Washington’s holy grail, called for $4.1 trillion in deficit reduction. All calculations include debt service savings, so this is an apples-to-apples comparison.
If you want to move the goalposts, feel free. But facts are facts: by this time next week we will have achieved very nearly the total amount of deficit reduction that everyone was gaga about a mere two years ago—more than 80 percent of it from spending cuts. It’s truly unfortunate that we’ve been so fixated on this, since we would have been much better off investing for the future and leaving deficit reduction for later, but that’s water under the bridge. Love it or hate it, over the past 27 months we’ve accomplished nearly 90 percent of the deficit reduction everyone wanted.
So we’re all happy about this, right? Right?
Reason has a short piece lamenting that OMB’s report on the impact of the sequester included information about an agency that does not exist:
The first line item on page 121 of the OMB’s September 2012 report says that under sequestration the National Drug Intelligence Center would lose $2 million of its $20 million budget. While that’s slightly more than 8.2 percent (rounding error or scare tactic?), the bigger problem is that the National Drug Intelligence Center shuttered its doors on June 15, 2012–three months before the OMB issued its report to Congress.
They go on to ask what other errors are contained in the report.
I suspect that the only error here is that Reason seems to not understand the federal budget process. The NDIC may have closed in June, but the fiscal year didn’t end until September, which meant it was still funded. But, congress did not pass a new budget at that time. Rather, they passed a continuing resolution, which continues to fund all of the various agencies that were previously funded. Cuts can be made indiscriminately, ie you can say the CR will fund the government at 2% below current levels, but you can’t zero out line items in a CR. That’s what a budget is for.
So even though the NDIC does not exist, it exists. It’s money is appropriated. Presumably the next budget will zero it out and its unused funds will be returned to the treasury, but until that time it exists, at least on paper. And as such, OMB was correct to include it in the report.
This is, incidentally, one of the many reasons why governing via short term CR is bad.
Seriously. Just stop.
[Obama] is also open to a bill that would avert the sequester for as little as two months.
Just cancel the goddamn thing. Or just implement it. Or do anything other than this. Constant, monthly fiscal fights and unceasing budget uncertainty prevent anyone from doing anything.
Oh, that’s the point, isn’t it?
These are not the words of a president serious about cutting the debt. Cutting “waste” in government isn’t going to get you anywhere near what you need. And the president needs to get serious about the burgeoning long-term costs of Medicare. That requires real honesty about real future sacrifice – not blandishments about how we might be able to bend the cost curve slightly.
Can we, please, get something other than typical deficit-scold group think? Andrew seems to think that all we need is more seriousness and more sacrifice and then we’re golden. He decries the President’s desire to raise additional revenue as not serious because it won’t raise enough. Well, OK, I agree it won’t raise a whole hell of a lot. But previously Sullivan complained that the President wanted too much (relative) revenue!
I would ask how much, specifically, is thecorrect amount?
More importantly, I would ask how much deficit reduction, specifically, is the correct amount?
We’ve already done $2.4 Trillion. But I guess that’s just not enough serious sacrifice for the deficit scolds. They won’t be happy until, well, they will never quite say. Is stabilizing the debt to GDP ratio sufficient? We can do that with another $1.2 Trillion. Obama’s “not serious” revenue ask gets us half way there.
Alas, we will now continue our charade of THE DEFICIT WILL KILL US ALL MORE AUSTERITY NOW I’M VERY SERIOUS AUSTERITY NOW! followed by AUSTERITY WILL KILL US ALL! (remember the fiscal cliff?) and then back again.
If you’re having trouble making sense of the Very Serious beltway opinion on fiscal matters, its because it doesn’t make a goddamn bit of sense.
If you want to go small, Mr President, and leave the real debt cutting to your successor, that’s your prerogative. But it is not the change we believed in. Or voted for.
Well, actually that’s exactly what we voted for. Obama made no secret of his desire to squeeze revenue out of the rich via sunsetting the Bush tax cuts for only high earners and via closing Mitt Romney’s favorite loopholes. In fact, it was the entire premise of his campaign. Voters overwhelmingly rejected Mitt Romney and Paul Ryan’s (conflicting) versions of austerity for Obama’s “balanced” and minimally austere (by comparison) approach.
I don’t ever recall Barack Obama running on a platform of “serious” austerity. Sullivan has been lamenting Obama’s failure to “embrace Bowles-Simpson” for two years, a lamentation that made as little sense then as now. On spending, Obama actually has (very nearly) embraced BS (in terms of net amounts, if not line items). On revenues, he never intended to. He’s made that abundantly clear for almost two years.
House Budget Chairman Paul Ryan (R-WI) told the Wall Street Journal that Republicans “are discussing whether to support a short-term increase in the nation’s borrowing authority, possibly linking the debt ceiling to future talks aimed at reaching a major deficit deal.”
Predictable outcomes etc etc.