Budget Myths

At this moment in history, there is one clear imperative: the Republicans must not agree to a last-minute, closed-door deal that would chart the nation’s fiscal course for years to come on the basis of a half-baked, poorly-understood “compromise” in which trillions of dollars are committed, based on bullet points written on the back of a napkin. We need an open, legal, transparent budgetary process in which the inevitable compromises are reached in the light of day, not another Charlie Brown and the football moment.

Ranking Budget Committee Republican Jeff Sessions has been our most consistent and reliable voice on this issue. Today he gave a speech on the Senate floor that exposed some of the myths that are circulating in the budget debate:

First, I would like to address the myth that the president has a $4 trillion deficit-reduction plan. The only plan the White House has ever put on paper is his February budget, which doubles our national debt.

The president has never put a single spending cut plan on paper and he has no proposal to slash the deficit. If he does, it’s a closely guarded secret. And if such a secret plan does exist it should be made public this very afternoon. I’d like to see it. I’m sure millions of Americans feel the same.

We also have no debt plan from Senate Democrats. In fact, they haven’t even passed a budget in 813 days.

As of now, there is only one debt limit plan on paper. Only one plan available for public scrutiny and review. That’s the plan we are debating today: cut, cap, and balance. It cuts spending immediately, it caps it so it doesn’t go up, and it requires the passage of a balanced budget amendment to ensure Washington ends the deficit spending once and for all. The American people do not trust Washington to pass some grand budget deal with tax hikes that never go away and spending cuts that never materialize. …

Another myth I’d like to address is the idea that our current budget crisis is the result of two wars and a tax cut. Let’s consider that claim. The total cost of the wars in Afghanistan and Iraq, over the entire last decade, is $1.3 trillion. Again, that’s over the last decade. This year alone the deficit is expected to be $1.4 trillion dollars. War costs represent only 4 percent of total outlays over the last ten years. The total amount of money spent since the president took office is $8.5 trillion dollars. By the end of his first three years in office we will have added $5 trillion to our gross federal debt. We are borrowing almost half of what we’re spending every single day. In the last two years, non-defense discretionary spending has soared 24 percent. The stimulus package alone—enacted into law in a single day in 2009—cost more than the entire war in Iraq. Annual spending when President Bush took office was less than $2 trillion. Today, it’s almost $4 trillion. It will be almost $6 trillion by the end of the decade.

There is only one honest answer to the question over why our debt is rising so fast: out-of-control domestic spending.

Another myth that’s circulating which I’d like to address concerns the budget summary from the Gang of Six. The authors of the summary claim that their approach would reduce the deficit by $3.7 trillion. But my staff on the Budget Committee can only find $1.2 trillion in reduced spending, along with a tax increase of $1 trillion. Where does the other $1.5 trillion in deficit reduction come from? Chairman Conrad, one of the members of the Gang of Six, even says the outline has a $1.5 trillion tax cut. But this is compared against a baseline that assumes a $3.5 trillion tax increase. It’s just an accounting gimmick. The real cost of the tax changes could be an increase as large as $2 trillion.

This is why we need more than a handout—we need legislative text.

The last myth that I’d like to address is perhaps the most important of all. This is the myth that we only need about $2 trillion in spending cuts over the next ten years.

Democrats have said—although no plan has ever been made public—that they could get behind a budget deal that reduces the deficit $4 trillion over the next ten years, half of it comprised of spending cuts. I’m skeptical that even this minimal level of spending cuts would occur. But even if it did, it’s not even close to what is needed to ultimately balance our budget. We are projected to spend $46 trillion over the next ten years. A $2 trillion cut is only about a four percent reduction in spending that is set to increase almost sixty percent.

The current “deals” that are being bandied about would be disasters for the American people. The debt ceiling should be raised, in exchange for a FY 2012 spending cap. Assuming the Senate doesn’t pass cut, cap and balance, as it won’t, all further budgetary matters should be taken up in an orderly process consistent with the Congressional Budget Act.