A $63.2 billion proposed increase in spending canceling almost 35 percent of the sequester cuts scheduled for 2014 and 2015 will be offset by just a $6.25 billion cut to spending and a $269 million increase of revenue in those years, reports the Congressional Budget Office (CBO).
The other $78.5 billion of so-called “deficit reduction” to be achieved under the proposal will not occur until 2016 through 2023, including $28 billion of proposed cuts to defense and non-defense spending that are not set to occur until 2022 and 2023.
“The supposed out year cuts are simply a cynical insult to taxpayers who now know that when push comes to shove, the cuts will not be kept,” Americans for Limited Government President Nathan Mehrens warned in a statement issued after the deal was announced.
“This is just one more example of how out of touch our national leaders are to the real priorities of the American public,” he added.
The eleventh hour deal struck by lawmakers will reduce the defense sequester by 41 percent for 2014 ($22.4 billion) and by 17 percent ($9.2 billion) in 2015, and the non-defense sequester was reduced by 61 percent for 2014 ($22.4 billion) and by 25 percent in 2015 ($9.2 billion).
Meaning even the spending increases called for in cancelling sequestration will disproportionately favor non-defense spending, just as cuts in the original sequester disproportionately hit defense spending.
But that’s not the only whopper in this grand bargain. It allegedly “reduces the deficit by $23 billion and it does not raise taxes. It cuts spending in a smarter way,” declared House Budget Committee Chairman Rep. Paul Ryan (R-Wisc.), who brokered the deal.
Doesn’t increase taxes, you say?
Besides the $6.6 billion of increased revenues CBO scores, tucked into the package is $12.6 billion over ten years from a fee of “$5.60 per one-way trip in air transportation or intrastate air transportation that originates at an airport in the United States” that was somehow magically scored not as revenue, but as a spending cut. Huh?
You got that right. In what universe is that a spending cut? It doesn’t matter. The next time you book a round-trip flight and it is $11.20 costlier, remember you’re not actually paying a tax, you personally are reducing federal spending — even though the provision itself does nothing to actually reduce transportation security spending.
Similarly, almost $7.9 billion of increased premiums paid into the Pension Benefit Guaranty Corporation is scored as a spending cut. So are about $6.8 billion of higher customs user fees collected in 2022 and 2023.
Just those three items total $25.9 billion — a full one-third of the supposed $78.4 billion of spending cuts are no cuts at all, but fee increases.
And, again, another $28 billion of cuts won’t occur until the 117th Congress, seated in 2021, meets to decide the 2022 and 2023 budgets. That is, if sequester has not been fully repealed by that time.
The other $24 billion of cuts are legitimate, but again, the American people will have to wait for $20 billion of them to be implemented in the out years starting in 2016.
Is postponing spending cuts really a “smarter” way to cut spending if those cuts never end up happening?
Immediately, spending will increase dramatically and air travelers will be hit with an average $1.2 billion tax hike every year.
House Speaker Rep. John Boehner (R-Ohio) called the proposal “modest,” and blasted conservative groups he said “came out opposed to it before they ever saw it.”
And maybe they did. But in their defense, the Ryan budget fraud is even worse after you take the time to read it.
Robert Romano is the senior editor of Americans for Limited Government.