Dec 2013 Budget Deal: Chris Edwards, “How could a deal composed of spending and revenue increases possibly be the right direction when the government is already far too large?”

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

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!!!!!

Dec 2013 Budget Deal: Chris Edwards, “How could a deal composed of spending and revenue increases possibly be the right direction when the government is already far too large?”

December 16, 2013 12:31PM

Even More on Ryan-Murray Budget Deal

In the Wall Street Journal, Peggy Noonan calls the Ryan-Murray budget deal a “step in the right direction,” which echoes a claim by Rep. Paul Ryan. She says the deal “goes in the right general direction, not the wrong one.”

But how could a deal composed of spending and revenue increases possibly be the right direction when the government is already far too large? Noonan points to savings from “a little entitlement reform” that will “compound in the outyears.” She seems to be referring to planned health care provider cuts in 2022 and 2023, but those tiny trims are purely smoke and mirrors.

Noonan says “the deal breaks the caps for discretionary spending but fortunately leaves most of the sequester intact.” But that is not true for 2014, which is the only year that matters in a discretionary spending deal since appropriations is an annual process. Indeed, this deal proves that Congress can’t be trusted on caps or other sorts of promises for future discretionary spending restraint.

Before this deal, 2014 discretionary spending was to be sequestered $20 billion and capped at $967 billion. I had thought that GOP leaders would perhaps agree to put aside the $20 billion cut in exchange for some actual entitlement reforms. But the deal hikes 2014 spending to $1.012 trillion, or $45 billion above the current law amount. That’s not “moderate progress” as Noonan says, but a total GOP cave-in.

Noonan calls the deal a “confidence-building measure” that could “encourage both parties toward bigger agreements, such as tax reform.” In fact, approval of this tax-and-spending deal will blow the trust of fiscal conservatives that GOP leaders could negotiate any reasonable deal with Democrats on bigger issues such as tax reform. Rather than build confidence, this deal will undermine the confidence of conservative voters that Republican leaders are on their side. Sadly, this deal shows that today’s GOP leaders would probably be taken to the cleaners by the Democrats on a major tax or entitlement reform deal.

Other observations on this bad deal are here and here.

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

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