Not a Victory for Taxpayers

by Veronique de Rugy

Reading what Dean Baker and Katrina vanden Heuvel have to say about the budget deal in the Wall Street Journal, one would think that $1 trillion was trimmed from the budget last Friday night. Here is Baker:

In a deep downturn like the one we’re experiencing, government spending will create jobs under the theory that people work for money. That argument shouldn’t be too complicated for the president to lay out to the public. Instead, he is celebrating the fact that he signed a deal that will throw hundreds of thousands of people out of work.

Here is vanden Heuvel:

Republicans have doubled down on their reverse Robin Hood agenda. When they speak of “fiscal responsibility,” get out your decoder ring. Because what they really mean is that middle-class and working Americans should shoulder the responsibility of tackling debts and deficits. And—natch—in this budget, the toughest cuts will come from education and health.

What are these guys talking about? The average annual increase in federal spending over the last decade was roughly $170 billion, which is more than four times the proposed $38 billion cut. In 2009, federal spending surged $384 billion in a single year, or ten times more than this year’s relatively tiny cut. Under the president’s budget, spending is slated to increase $363 billion from 2010 to 2011, ten times the size of the cuts.

But these remarks seem even stranger now that we all have had time to look at deal’s fine print — not only is $38 billion a ridiculously small amount of money, but there isn’t even $38 billion in cuts in that deal. Many of the proposed cuts result from accounting tricks, cutting funds left over from previous years, and going after programs already intended for elimination by the current administration. Here are some examples:

­$10 billion comes from targeting appropriations accounts (Republicans had already engineered a ban on earmarks when they took back the House);

$5 billion comes from capping payments from a fund awarding compensation to crime victims.  Under an arcane bookkeeping rule – used for years by appropriators – placing a cap on spending from the Justice Department crime victims fund allows lawmakers to claim the entire contents of the fund as budget savings.

­$1.5 billion comes from cutting the administration’s $2.5 billion request for high-speed rail funding to $1;

­$650 million from not renewing a one-time 2009 infusion into highway programs;

­$350 million from cutting a one-year program enacted in 2009 for dairy farmers then suffering from low milk prices;

­$6.2 billion in cuts (16% of total) comes from census money that the government did not use last year

Nearly $18 billion in cuts will come from “changes in mandatory programs,” or CHIMPS which involve programs funded for multiyear blocks that don’t require annual spending approval by Congress.

This maybe a political victory for Speaker Boehner (I admit that politics makes no sense to me), but it’s not a victory for taxpayers.

The Corner

The one and only.