The new debt plan is reporting to cut federal spending by $2.1T over the next ten years, but is that accurate?
According to a number of economists and politicians who have been looking through the final plan, it really doesn’t come close to cutting spending by the amount being reported.
Senator Lindsey Graham of South Carolina says the new debt plan only cuts $21B in 2012 (which is only 2 ½ days of federal spending) and will result in an additional $7T of debt over the next 10 years added to the current deficit of $14T.
Chris Edwards of CATO reports that the new debt plan only cuts $22B from the 2012 budget of $3.6T, which is less than a 1% spending cut. He also points out that the $917B cut in discretionary spending as certified by the CBO is a not a cut at all. Looking at the graph above, the discretionary cuts only relate to the co-called CBO baseline. This CBO baseline is something created by Washington to reflect the steady increase in spending. If you notice, the red bars continue to rise each year. The cuts are suppose to include a $156B savings in interest, which Edwards points out is imaginary since the underlying cuts it is based upon are also imaginary.
Both of them agree that the new plan only cuts between $21-$22B from the 2012 budget and that the deficit will rise by $1T next year alone. I’m sure that the Democratic leadership will use these figures to continue to push for tax hikes and use the newly proposed committee to accomplish the hikes.
Budget cuts? Do they really believe those two words or is this just smoke and mirrors to fool the American public into thinking they’re cutting spending while they carry on with business as usual?
There were two Senators, Tom Coburn and Rand Paul, that proposed some deep and drastic budget cuts, but none of those proposals were included in the final debt plan. It’s time we get all new politicians who have the courage to actually do what is necessary to avert the financial slide we continue down as the current debt plan seems to only forestall the inevitable.