Dec 2013 Budget Deal: Scholars at Heritage warned that sacrificing short-term budget constraint for savings that would occur in the long-term future is a dubious proposition!!!!!!

Should Congress approve the budget compromise?(Includes
Romina Boccia of the Heritage Foundation)

Published on Dec 11, 2013

Avoiding provisions that sharply divide the two parties, budget negotiators reached a deal to fund the government for two years. Kwame Holman reports on reaction to the deal. Judy Woodruff talks to Steven Rattner of Willett Advisors, Douglas Holtz-Eakin of the American Action Forum and Romina Boccia of the Heritage Foundation.

Bipartisan Budget Deal

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Scholars at Heritage warned that sacrificing short-term budget constraint for savings that would occur in the long-term future is a dubious proposition!!!!!!
Bill Clark/CQ Roll Call/Newscom

Bill Clark/CQ Roll Call/Newscom

Next week, the Senate will consider the Ryan-Murray budget deal — a spending plan that disappoints conservatives and believers in a limited government that manages its finances.

Earlier during the negotiations between House Budget Chairman Paul Ryan (R-WI) and Senate Budget Chairwoman Patty Murray (D-WA), my colleagues and I at Heritage warned that sacrificing short-term budget constraint for savings that would occur in the long-term future is a dubious proposition.

Budget historians know that previous agreements of more spending today and budget cuts tomorrow have resulted in more spending today and more spending tomorrow as well. Blowing through the sequester caps today doesn’t make us confident that future Congresses will abide by these caps in the next decade.

While the agreement does take some positive steps — having federal workers fund more of their own retirement plans instead of relying on taxpayer funding — the deal will put additional pressure on Medicare providers. To finance Obamacare, President Obama took hundreds of billions from Medicare providers and Medicare Advantage plans, and the sequester also reduced payment to Medicare providers. Policymakers go to future Medicare spending, because they know CBO will score these as big savings on paper, no questions asked.

There are better ways to reduce Medicare’s burden on the government and most of these provider cuts are simply price controls. The results are budget agreements that result in billions of paper savings, but much higher deficits in reality as politicians blow through these caps when Medicare doctors, hospitals, and, of course, beneficiaries are threatened. We believe that there can be a good trade using the sequester for entitlement reform, but this deal is not it.

Finally, conservatives should favor user fees in place of broader tax increases because fees are more closely tied to the government service delivered and thus more efficient and fair than income taxes. However, the higher fees in this case are simply a placeholder for tax increases since the fees are used as cover for higher spending. This defeats the purpose of fees, which should not serve as a vehicle for higher government spending.

Originally published by National Review Online.

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I am so sad about the Republicans caving in and letting President Obama and the Democrats get rid of the Sequester spending cap limits!!!! I have contacted my Representatives and Senators and told them what I wanted them to do. I am happy to report that Tom Cotton and Rick Crawford voted in the House to keep the Sequester limits. I AM SO PROUD OF THEM!!!!!

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By Everette Hatcher III | Posted in Cato Institute, Economist Dan Mitchell | Edit | Comments (0)

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