Dueling Budgets; What Next?

The word in Washington is that there isn’t actually a lot of difference between John Boehner’s budget proposal and Harry Reid’s. Tonight, Boehner sent his budget back to the drawing board because the Congressional Budget Office, scoring the proposal on the fly, concluded that it would “reduce deficits by only $851 billion over 10 years.” A red-faced Boehner said he would revise his proposal to generate more savings.

What this episode mostly reveals is not disarray in the Speaker’s office, but rather the folly of trying to craft cosmic legislation, that supposedly will dictate spending and taxes for the next decade, on the back of an envelope. The Congressional Republicans’ fundamental mistake is going along with the Democrats’ scheme to turn the debt ceiling crisis into the opportunity for a grand fiscal bargain.

There are several reasons why this is a horrible idea, and we have elaborated on them at length. For the moment, let’s just emphasize one: both of the competing proposals take the easy way out by assuming savings primarily in the “out years,” the last of the ten years ostensibly covered by the budget plans. But this year’s Congress has no control over what a future Congress decides to spend years hence. “Cuts” in another Congress’s budget are entirely illusory. They will not materialize. The only spending cuts that have any significance are the ones over which this Congress has control, that is, the cuts that occur in the next one to two years. Beyond that, any budget document is a fantasy.

To illustrate the point, let’s look at the federal government’s budget for FY 2007. Not exactly ancient history, right? That was only four years ago, not ten. But how accurate did that budget’s projections for future years turn out to be? Here they are:

In 2007, the government’s budget projected that it would spend $3,240,000,000,000 in FY 2011. What actually happened? Federal spending exceeded that number by almost $600 billion. Did anyone notice? Do you recall a single person pointing out that the government’s FY 2011 spending vastly exceeded what it had projected just four years earlier? Of course not. That was then, this is now. Things change. Stuff happens.

So for Americans to accept tax increases today in exchange for promised spending “cuts” (i.e., increases that are smaller than those maniacally desired by federal bureaucrats) five to ten years in the future would be stupid. What should the Republicans do instead?

They should negotiate a deal for a short-term increase in the debt ceiling, no more than 12 months, in exchange for cuts that take place exclusively during the time period when the ceiling is raised. Forget about what happens five or ten years from now; this Congress can’t control it in any event. Negotiate for cuts today and tomorrow. They will be in the billions rather than the trillions, but they will also be real rather than fictitious.

The individual whose judgment has been soundest on these issues in recent months is Jeff Sessions, the ranking Republican on the Senate Budget Committee. He was prescient in arguing against last-minute, back-room deals that are voted on before anyone knows what is actually in them. We all know how that ends. Today, Sessions said:

I have warned from the beginning that if we skirted legislative process in favor of closed-door White House meetings, we would find ourselves in the 11th hour with gimmick-filled legislation being rushed through to a panic-driven vote. As feared, the Majority Leader’s bill does not achieve anything close to the promised savings. Given the late hour, rather than rush through poorly-vetted legislation to grant the president the largest debt ceiling increase in history, we should pursue a more reasonable approach: a short-term extension with real cuts during the immediate time period the extension covers, not ten years down the road. We should try the one thing that has been refused from the beginning: open hearings, regular order, and real legislative process.

To which one can only add: Amen. Our federal government has now gone for more than two years without a budget, to the everlasting disgrace of the Democratic Party. For now, let’s secure some real, immediate cuts in exchange for an increase in the debt ceiling. But then, let’s follow the law–that is, the Congressional Budget Act, which the Democrats have wantonly ignored. Let’s have committee hearings and craft legislation in the light of day; let’s debate the resulting bills on the floors of the House and Senate; let’s propose and debate amendments; let’s allow the American people and third-party experts to see and to evaluate the tax and spending proposals that our representatives want to enact. That’s the way the federal government is supposed to conduct its fiscal business. Let’s get back to it.