Boehner’s Cuts Are Dollar-for-Dollar, and Real Too

by Daniel Foster

Andy and Mark, I think Marc is right to point out the fact that since there is no revenue component of the Boehner plan, a dollar of cuts is a dollar of cuts is a dollar of cuts. The Gang of Six got away with saying they were cutting taxes, when in fact they were raising them, because they assumed the enactment of an even bigger tax hike as a fait accompli and a starting point. But all Boehner is talking about is taking spending authority Congress currently has away from it. Taxes are a whole other can of worms and not the purview of the bill, except insofar as it refuses to raise them. In other words, regardless of what other law Congress passes, the Boehner Plan (which one Hill staffer hilariously described to me as the “Cut, Cap, and Get Your Ass in Line Act”), reduces Uncle Sam’s allowance by close to a trillion dollars. Perhaps more crucially, it sets the baseline for future negotiations about increasing Uncle Sam’s allowance at this new, lower level.

Look, folks are right to point out that back-loaded cuts promised now won’t necessarily materialize, since you can’t bind future Congresses. But that’s part of the weather around here, and it doesn’t make sense to me to judge the Boehner plan now on what may or may not happen in the future. Is the Boehner plan the wrong policy now because the Democrats may take over in 2012 or 2014 or 2016? I don’t understand that argument. Likewise, the worry about front-loading versus back-loading spending is somewhat misplaced. Of course I wish the upfront cuts were bigger (currently $22 billion in year one). But considering the plan as it stands is a long-shot to become law, I’m not sure how much play we have here. Besides, the main reason the cuts are back-loaded isn’t political per se, it’s mathematical. Current law assumes that spending on program x will increase at rate y every year for the next ten years. If you freeze spending on program x or even retard its growth, the real dollar value of the cut is thus greater in the out years. It’s as simple as that.

It’s also true, in some sense, that making the Bush tax cuts permanent would “wipe out” the savings achieved through the Boehner spending cuts. The problem with this line of thinking is that it subtly embraces the very mentality we conservatives are supposed to abhor. It assumes that money belongs to Washington until it extends us permission to keep it, and that letting people keep more of their money “adds to the deficit” in a way  not just materially but philosophically equivalent to increasing spending. You can come down however you want on whether conservatives should get used to the idea that eliminating deficits requires tax increases (for years now, Kevin Williamson has been arguing, brilliantly, that we should). But how you come down on that question doesn’t have the magical ability to transform the Boehner cuts from “real” to “fake” and back again. Again: the Boehner plan reduces government’s spending authority by close to a trillion dollars. Full stop.

Lastly, it is not quite right to say that raising the debt ceiling is equivalent to giving Obama “an extra trillion bucks in his pocket.” That money represents promises already made and funds already allocated by this Congress and its predecessors. Consider an allegory: Imagine your uncle husband*, a profligate spender, died and you inherited his liabilities, but you didn’t have nearly enough annual income to pay them off. A sensible thing to do would be to borrow to cover his debts and then reduce your own future spending by an equal or greater amount in order to pay off your loan. That’s precisely what the Boehner plan does. By contrast, folks like Michele Bachmann — who has otherwise handled her presidential campaign most impressively — are essentially refusing to pay their uncle’s husband’s debt, under any circumstances at all. That’s no less irresponsible than accumulating all that debt in the first place.

*thanks to Josh Barro for pointing out that my first analogy didn’t quite match up with how law works in most states.