In a rather amazing post on the White House blog, President Obama’s OMB director, Jack Lew, comes to the defense of the original Boehner bill, arguing that its use of the January (rather than March) CBO baseline was in line with what all the negotiators had agreed to throughout the process, and therefore insisting that in fact the Boehner bill should be scored as cutting $1.2 trillion and not $850 billion. He’s wrong, I think, but in a revealing and important way. Lew writes:
While we disagree with the approach that Speaker Boehner chose to take in this bill, there is one thing that we all still agree on, and that is the size of the problem. Both the House Republican budget proposal unveiled by Congressman Ryan on April 5 and the President’s fiscal framework that he introduced on April 13, set as our goal deficit reduction of $4 trillion. Since both of these plans were introduced before the agreement on appropriations for FY 2011, the baseline used for them did not reflect the spending cuts enacted this year in that legislation. Indeed, throughout our weeks of talks, all parties have worked off a January baseline because we all recognized that we needed to start from the same place.
That is why it would be confusing to judge the current proposal’s savings from the “adjusted March 2011 baseline” which CBO released in May. Conveniently, CBO notes the January baseline numbers in its analysis, and pegs the savings from the Boehner plan at $1.1 trillion. Furthermore, an additional adjustment was also assumed in the talks for the projected costs of Pell Grants under a special Congressional rule. That adjustment brings the savings up to $1.2 trillion.
Don’t get me wrong: there is a lot in Speaker Boehner’s plan that we do not like and actively oppose. But, as this debate continues and intensifies in the coming days, it’s important that we compare apples to apples, and make sure that we are all understanding the facts.
This doesn’t really make sense, of course. The March CBO baseline is more recent and current than the January one, and it makes sense to use that one now, even if the Biden talks and subsequent negotiations used an earlier baseline (which led the architects of this bill, working off their prior efforts, to do the same). Republicans are right, therefore, to be re-writing their bill to match the later baseline.
But the more interesting question is why would Jack Lew write this, and essentially defend Boehner and his bill? I think the most plausible reason is that Democrats have just realized that the Reid bill, which the White House is backing, has made the same mistake, so that Reid’s cuts would also be scored as lower than its authors claim by CBO (probably at exactly the same level as the original Boehner bill). With House Republicans accepting CBO’s correction and re-writing their bill with deeper cuts to suit the later CBO baseline, Reid’s bill suddenly becomes a much weaker player in all this unless he also makes deeper cuts, which the Democrats are obviously not inclined to do.
In that sense, this baseline confusion could well strengthen Boehner’s hand. He has another chance here to design the bill in a way that addresses some of the concerns that House conservatives have raised today—that is, in a way that relies less on back-loaded caps, and that more generally just has effectively deeper caps but on its face is the same bill at the same levels that congressional leaders informally agreed to over the weekend. The same structure and the same level of cuts, but using the later baseline, gives him a chance to produce a stronger bill but one that should have no less of a chance of shaping the Senate debate and the ultimate outcome if it passes the House.
Boehner is right to use the opportunity to re-write the bill, and hopefully his team will re-write it along these lines. Reid may have no choice but to follow. And whether he does or not, the debate will have taken a rightward step that makes passage of the Boehner bill even more appealing and important…and perhaps also more likely.
Mr. Levin,
Thank you for posting this, I don't think it's especially wonky. I do keep coming back to what I call (with your forgiveness), Yuval's Lament: When does all this heat and anxiety transform from a green-eyeshade grudge-match to a discussion about what government is for and what essential limits must again define it....
Some of the loudest, purist voices are still saying: We can't AFFORD this!
Which isn't really the point.
Thanks again.
Reply to this commentLinkReport AbuseArguing about where the starting point is for future cutting reminds me of the grown-up explaining how to balance a checkbook to a young first time user. They don't quite grasp the concept of keeping track of the money going in AND out. In order to write a new check you have to first have some money in the account to start. In Washington though it seems more like the newbie account holder is explaining how 'they' balance things with the New Accounting procedures. No matter how you spell it we're all screwed.
Reply to this commentLinkReport AbuseLew's comments simply confirm my suspicion that, in fact, Obama and Reid WANT the Boehner plan to pass the House, so they can turn it into an even more blatant tax hike bill which they can then jam down the House Republicans' throats.
I believe Obama's goals in this fight are to 1) pose as a fiscal centrist, 2) force the GOP to swallow tax hikes, and 3) thwart entitlement reforms.
The Boehner plan would seem to be his best chance for securing all 3 of these goals. He just has to feign opposition to it, till it's safely out of the House. Then -- watch -- he will suddenly discover its virtues.
Reply to this commentLinkReport AbuseDead on, Dean.
You start with one negotiating position and you stick to it, and that was CCB. Dem Senate says it's DOA? Obama says he'll veto? Then say all their plans are DOA. That works both ways and that's how House AND Senate Republicans should have been negotiating from the start--CCB, take it or leave it.
Reply to this commentLinkReport AbuseObama wants a "balanced approach" meaning tax the rich and cut spending. Call his bluff and do a deal to tax all millionaires and billionaires at whatever rate Obama wants. Most of the rich in this country are democrats anyway and there's something poetic about democrats raising taxes on democrats.
Until the richest people in this country feel enough pain, they'll continue to fund the democrat party which continues to screw things up for the rest of us. Tax them, make them feel the pain until they've had enough.
Reply to this commentLinkReport AbuseA "balanced approach" will put us $26.1 trillion in debt in 2021. President Obama wanted a grand bargain: $4 trillion in cuts plus $1 trillion in taxes; all over the course of 10 years. That is $5 trillion total. This "balanced approach" allows for $11.6 trillion in more deficit spending instead of $16.6 trillion during the next 10 years. Adding that $11.6 trillion to our current debt of $14.5 trillion brings us to $26.1 trillion total debt by 2021 with a "balanced approach."
A balanced budget amendment cuts out all the borrowing. If we had it today we would be cutting all $16.6 trillion in deficit spending over the next 10
years. That means our current debt of $14.5 trillion...would take us 145 years to pay back (not including the interest) at the rate of $100
billion a year. But we plan to keep borrowing...indefinitely.
Can you imagine? Debtor says, "I would like to
borrow some money." Creditor says, "And what do you owe now?"
Debtor: "So much I need at least 145 years to pay it back." Creditor: "Tell me
your plan." Debtor: "I have no plan to pay it back. I will only pay
the interest." Creditor: "You want your kids, grand kids, and great
grand kids to pay it back?" Debtor: "It will be very painful for me
not to get the loan. I can print up some money if I need to."
Creditor: "You have no plan." Debtor: "I am working on a plan to borrow a little less
than usual - 10% less." Creditor: "You have no plan to balance the
budget, you plan only to keep borrowing, you print up money, you dump
your debt on 3 future generations and counting, and you want us to believe you have
integrity, and are worthy of faith and credit?" Debtor: "I want what I
want when I want it, and I want it right now. Give me the loan or I will print the money!"
We are incredibly destructive. We tax the unborn to get what we want right now, and we refuse to de-fund their aborter. Me, me, me, me, me.
Reply to this commentLinkReport AbuseThere's a debt ceiling. It seems that the GOP is in a position to refuse to accede to raising it. If the debt ceiling is not raised and if it has any meaning, won't massive spending cuts then ensue? Are not massive spending cuts justified? Cut the spending.
Reply to this commentLinkReport AbuseInteresting times we live in. Tag this with the WH press secretary's comment (wearing the supersillious (sic) mask passed on from his predecessor) that the 'senior advisors to the president' would counsel a 'veto' to the Boehner plan.
We all know Who's mill grinds slowly but exceedingly small. Kudos to the GOP whiz 'kids' who metagamed this.
Reply to this commentLinkReport AbuseThe plan John is meaningless. He is about to be played for a sucker.This silly idea that the spending cuts will be factored into future congress' budgets is the most fanciful pipe dream ever....even when they are as paltry as they are. We are spending 10 billion a day....and John plan will not touch that IN THE ONE YEAR THE PLAN HAS ANY TEETH....THE LAST YEAR OF THIS CONGRESS' SESSION.
Reply to this commentLinkReport AbuseMcConnel has been run over by Nancy Palosi so many times it's not funny yet senate Republicans retained him as leader, Now look a John....following in the same trodden path. We need more Tea Party Republicans
cw
"We need more Tea Party Republicans"..."SECOND".
Reply to this commentLinkReport Abuse"We need more Tea Party Republicans"
Yes, but to get them, we have to win this battle. It is only a skirmish but it sets the trend. With a GOP Congress and White House, Cut, Cap and Balance has a good chance. Now, it has none and losing the skirmish will lose the war.
Reply to this commentLinkReport AbuseGood point. And this plan may be more appealing to independents who would the look more favorably at Repubs come election time.
Reply to this commentLinkReport AbuseThis "debt ceiling debate" is reminding me of the scene in the movie "Dave". Too bad our leaders won't bring in their own Murray and fix this thing. Everyone has their own pet projects and to really cut the waste there have to be real leaders. Unfortunately, no Dave and no Murray.
Reply to this commentLinkReport AbuseReid is "weaker"? You do know that after (if) Boehner passes it out of the House, it's got to go to Conference Committee...with Reid's Senate, right???
Reply to this commentLinkReport AbuseHey, genius? Do you know that "conference committee" requires the Senate to actually pass a bill? There's no conference committee with only one plan on the table.
Conference committees are used to reconcile TWO different pieces of legislation. So, with Reid's Senate obstinately refusing for 820 days to pass either a budget or an authorization for an increase in the debt limit, there's nothing to conference about.
Thank you for ignorantly highlighting the impotence of Harry Reid's leadership.
Reply to this commentLinkReport AbuseI am not sure I can take anymore of these twists and turns. I realize it is all a kabuki dance of style over substance. But in order to win the substance war - we need to win the style fight. Too many people in this country are either greedy or just not engaged enough to understand what is occurring and losing any of these skirmishes will be deadly to allowing "We the People" to fix our spending problem as opposed to just letting the bond market do it.
By the way - it would appear the bond market isn't much worried at all. 10yr yield is still under 3%.
Reply to this commentLinkReport AbuseFurther evidence of the lack of seriousness about the problem. The answer for why they don't want to use the more up-to-date and accurate number is obvious -- because their cuts look better on paper with the out-of-date baseline. Is it too much to ask that politicians in Washington actually recognize the problem as it exists today, as it's going to exist in the years to come, and fix it for the good of the country, in a gimmick-free, real way? Maybe it is. It's important to note, however, that when Boehner's office learned their plan was going to be scored lower than expected, they delayed a vote on their plan to beef up the cuts. That's heartening.
Reply to this commentLinkReport AbuseBoehner is played for a sucker by Reid and Obama.
He needs to have the House pass something, pass it to the Senate, and adjourn.
Put Reid and Obama in the spotlight. And keep them there.
The objective is to prevent Obama's re-election. Period.
Reply to this commentLinkReport AbuseThank you for speaking the truth.
Reply to this commentLinkReport AbuseLet's let the U.S. economy and our government go down the drain so long as Obama doesn't get re-elected.
Enough of this B.S.
Vote for Boehner's plan.
Reply to this commentLinkReport Abuse