Tag: budget

Ryan directed the Congressional Budget Office to score his budget plans back in 2012. The score of his plan showed the non-Social Security, non-Medicare portion of the federal budget shrinking to 3.5 percent of GDP by 2050 (page 16).

This number is roughly equal to current spending on the military. Ryan has indicated that he does not want to see the military budget cut to any substantial degree. That leaves no money for the Food and Drug Administration, the National Institutes of Health, The Justice Department, infrastructure spending or anything else. Following Ryan’s plan, in 35 years we would have nothing left over after paying for the military.

Just to be clear, this was not some offhanded gaffe where Ryan might have misspoke. He supervised the CBO analysis. CBO doesn’t write-down numbers in a dark corner and then throw them up on their website to embarrass powerful members of Congress. As the document makes clear, they consulted with Ryan in writing the analysis to make sure that they were accurately capturing his program.

Dean Baker, writing for the Center for Economic Progress. This is exactly right and cannot be repeated frequently enough. The fact that it isn’t even said, much less repeated ad infinitum is why The Democrat fails and but also is why this nonsense within the GOP led House is allowed to continue. Democrats, when people are showing up outside the doors of the House with pitchforks, torches, and large logs you’ll know you’ve repeated it frequently enough. Please start now. It’s going to take decades.

Every year we get a slightly different version of the same old [Paul Ryan budget proposal], and every year we have to waste entire man-years of analysis in order to make the same exact points about it. And the biggest point is that his budget would force enormous, swinging cuts in virtually every domestic program, especially those for the poor. If this bothers Ryan, he’s had plenty of time to revise his budget roadmap to address it.

But he hasn’t. He knows perfectly well that his budget concentrates its cuts on the poorest Americans. It’s been pointed out hundreds of times, after all. If he found that troublesome he’d change it. Since he hasn’t, the only reasonable conclusion is that this is exactly what he intends. Let’s stop pretending otherwise.

Kevin Drum and I are in agreement. Stop making excuses for Ryan. Stop calling him “serious” or “wonky.” He’s neither. He simply puts an unachievable yet comfortingly numerical face on the GOP broader policy goal. Namely, reduce taxes on rich to as close to zero as can be achieved in a single go-round. Then make a show of balancing this huge deficit driver by a) failing to name any substantive tax reforms and but also specify that you’re going to be relying on extensive, substantive tax reform –and– b) cutting all programs for the poor to the bone or entirely. Can’t have a safety “hammock” after all.
When this still fails to balance the budget, you are free to go after Medicare, which was the plan all along. While there, may as well functionally end Social Security; even though it’s not a deficit driver, you’ve got huge constituencies and the MSM convinced that it is so why the Hell not? Then you call it a day and can efficiently sand the gears against putting any of it back in place even if you find your party in the legislative minority for decades. Huzzah for democracy.
Source: Mother Jones

Compare and contrast with this exchange on NPR yesterday (emphasis added):

[NPR’s Melissa] BLOCK: Let’s move on to the budget questions that are pending here. You sent a rather lengthy letter to the Defense Secretary Leon Panetta about a month ago, making the case for the Marine Corps in a time of, what you called, considerable fiscal austerity. And the message to Secretary Panetta seemed to be, as you’re slicing an ever small, an ever shrinking pie, protect us, protect the Marines. I wonder if this becomes a battle essentially among the service branches of who is most worthy. And if that is the battle, what’s the case from the Marines?

[Marine Corps Commandant General James] AMOS: Well, I think in anybody budget crisis – when you’ve got multiple services – in some cases, it can relegate into roles or missions. In other words, what’s the role of this service, the mission of this service? I think it can happen that way. And if you’re not careful, it can break out probably the worst of behavior.

So, what I was really trying to say is that as we come down and reduce capabilities and capacity in our nation, one of the ways that you can – and you assume a level of risk when you do that. You know, we’re going from what we are down to something less. When that happens, how do you mitigate the risk?

Indeed, it’s going to take a lot of risk mitigation to even begin thinking about some smallish cuts to this budget. And but also: this is what they call a “budget crisis” and “considerable financial austerity.”

Source: ilovecharts

2.96

Emphasis added:

…if even 1/50 of the austerity-induced decline in current output flows through to reduce the economy’s productive potential, that austerity today worsens the debt burden.

This is an unusual result: it applies only to a country with a substantial fiscal multiplier that can fund its debt at very low interest rates. But we are a country with a substantial fiscal multiplier that can fund it’s debt at very low interest rates…

Indeed we are. But no one seems interested in noticing. We can borrow against a 10-year Treasury at a 2.96% yield. The money behind that rate is clearly not concerned with either deficits or the capability of the United States to meet the debt incurred by their purchase yesterday or all the days before that. As Jared Bernstein notes, the current “budget math” still strongly favors a jobs target and not a deficit target.

This is very simple stuff. How many ways do you have to prove that cuts today worsen our long-term fiscal situation before somebody with a D after their name starts talking about this in a compelling, no-nonsense fashion? We can borrow, cheaply, and those dollars (when pumped into the economy) would hasten the closing of our current output gap. This would simultaneously a) obviate the need for further borrowing, b) close the revenue shortfalls of Great Recession, and c) coupled with a do-nothing legislative approach relative to the Bush tax cuts would almost entirely close the existing budget deficits within a few years.

But, by all means, let’s go on pretending that deep, punitive cuts to the social safety net and eliminating access to abortions are the only Serious Person positions possible given the current situation.

2.96

Shocking News about Gang of Six

A bipartisan effort to rein in the national debt stalled Tuesday, as members of the Senate’s so-called Gang of Six signaled that an agreement is unlikely to come this week in time for the start of White House-led budget talks.

Also unlikely to come in the weeks following the start of White House-led talks. And in the months and years after that. And, you know, forever. Just like the Baucus-led Gang of Whateveritwas on healthcare reform, these talks were never going anywhere. Ever. They were solely an attempt to get >50% of the Ryan plan and then stamp it with the Broder-approved Seal of Bipartisanship. And then demand another 20-30% on top of that “bipartisan” plan when the mess hit the floor. Period. That is all that was ever going on in there. All that is going on in there.

Though never mentioned in the mainstream media, there is one party, the GOP, that has categorically ruled out any revenue increase from any source and intends to “balance” the budget by eliminating Medicare, fundamentally ending Medicaid, and then passing those “savings” on to the very rich in the form of more tax cuts. And then, of course, raise the debt ceiling to pay for it by borrowing ever-more. This is their plan. Magically, they also plan to reduce all government spending to levels below what just the military consumes today. And this all seems likely to the Serious People. Sensible and courageous, even.

Notable that Tom Coburn, one of the vanishingly few people with ® after their name that actually accepts revenue probably has to increase, has suddenly left town. Shocking. I’m sure it’s truly pressing business back home.

Can we finally be done with time-wasting and air-sucking idiocies such as the Gang of Six and, for that matter, all these other “Gangs of” now and forever? I know Serious People love their Gangs, but there simply is no middle ground, or anything approaching “middle ground” between Ryan and the status quo. There just isn’t. And though Serious People will never, ever accept it, sometimes doing nothing is indisputably the best way forward when faced with intransigent and unthinking opposition such as that presented by the modern GOP.
In this case, doing nothing fixes at least half of our budget problem. But let’s not talk about that. Everyone knows that Medicare has to go away. Anything less would destroy America.

All I have to say is: All hail gridlock!

Shocking News about Gang of Six

Shutdown Number One

jasencomstock:

Senate Majority Leader Harry Reid, D-Nev., said Thursday morning that he and House Speaker John Boehner, R-Ohio, have agreed on a deal to cut about $38 billion from current spending levels, but added that Republican insistence on including a policy rider blocking federal funding for Planned Parenthood, is the only stumbling block.

“We agreed on a number last night,” Reid told reporters in the Senate Press Gallery. He said he is “really upset that this government is going to shut down” because of GOP efforts to limit access to abortion.

A spokesman for Boehner has challenged Reid’s account, saying that continuing differences over spending cuts, not the abortion rider, remains the problem.

On the wager: Planned Parenthood will be the Newt Gingrich bad seat on Air Force One of this shutdown. Simple and easy to understand, and it pushes most of sensible America’s “that’s just rank insanity” button.

Ryan’s Motivations (or: Pie-O-My)

Kevin Drum wonders what drives Ryan to produce such a uniquely partisan budget document:

I don’t know what motivates Ryan, but it’s certainly not a genuine search for plausible grounds for negotiation. Instead, he’s produced a document carefully crafted to produce a universally negative reaction from Democrats, presumably because he thinks that will make Democrats look intransigent while the Beltway press is praising Ryan for his courage.

Sorry, but that’s just wrong. Ryan crafted his document to produce a Beltway press that praises him for his courage and demand that The Democrat must now compromise based on that starting point. This is why the Democratic party needs to come out with its own pie-in-the-sky progressive budget. Then you could compromise in a way that would represent a legitimate compromise of opposing ideas and not just yet another rightward lurch at the hands of the ever-triangulating Democrats.

Instead, what seems likely to happen is the Democrats will counter with the deficit commission document and then compromise to the right of that. Which is precisely the outcome Ryan likely considers “worst but acceptable.” The sad reality, of course, will be that in the absence of a GOP President, a GOP Senate, and with only a fractionally lunatic GOP House they will have delivered the biggest far-right reshaping of American budgetary priorities (and politics) ever achieved in anyone living’s lifetime. And the Democrats will have only themselves to blame.

Ryan’s Unicorns

Krugman on Ryan:

Ryan is claiming that unemployment will plunge right away; that by 2015 it will be down to the levels at the peak of the 1990s boom (and far below anything achieved under the sainted Ronald Reagan); and that by 2021 it will be below 3 percent, a level we haven’t seen in more than half a century.

[…]

According to the CBO analysis, a typical senior would end up spending more than twice as much of his or her own income on health care as under current law. As Dean Baker points out, this means that seniors would end up paying most of their income for health care. Again, right.

[…]

Ryan is assuming that everything aside from health and SS can be squeezed from 12 percent of GDP now to 3 ½ percent of GDP. That’s bigger than the assumed cut in health care spending relative to baseline; it accounts for all of the projected deficit reduction, since the alleged health savings are all used to finance tax cuts. And how is this supposed to be accomplished? Not explained.

Now that’s what I call a truly serious and courageous budget proposal. Obviously it won’t pass, but it’s not meant to. It is meant to move the debate rightward. And it already has. Dread Liberal Mouthpiece the Boston Globe has already run a “Where’s the Democrat Version of Destroy Medicare?” editorial. The implicit expectation is, again, that Serious People know the sensible outcome is, by definition, in-between Ryan’s plan and status quo: thus the GOP moves policy ever rightward while The Democrat simply stays in defensive crouch, hoping to scratch out minor concessions along the way. Forever.

How’s that been working out for you?

Ryan’s Unicorns

Zero

That would be the number of Republicans that voted to end taxpayer subsidies for Big Oil. Companies that are enjoying record profits of ~$100 billion per year, often pay no taxes whatsoever, and receive taxpayer provided subsidies to the tune of tens of billions of dollars per decade.

But, by all means, let’s cut $100 over here that just gets wasted on food for starving children. Furthermore, let’s agree not to discuss any of this. Shrill.

Zero

Delusion, Failure, Recrimination

Jonathan Chait ably describes the Republican cycle:

The loop begins with Republicans gaining power on the basis of promising to cut unspecified programs, or perhaps programs accounting for a tiny proportion of the federal budget. That is the stage of the cycle we are currently in. Then Republicans obtain power and have to confront the fact that most spending programs are popular, and so they must choose between destroying their own popularity by taking on programs like Medicare, or failing to materially cut spending. So they settle on tax cuts instead of spending cuts. Then eventually their supporters conclude that they have been betrayed by their leaders, and cast about for new leaders with the willpower to really cut spending this time.

I’d add that even if they zeroed the entire non-defense discretionary budget they’d still be less than halfway to balance. And that’s before they formalize the permanent status of the Bush tax cuts and inevitably start adding in new tax cuts, which, of course, never have to be budgeted or paid for.

That the previous paragraph is news to most Americans is why the Democrats fail. And, just to name one, the elimination of the NIH and NSF through this zero budgeting process would basically doom the United States to second or third tier status in science, research, and development for decades, if not forever. So there’s that.

But let’s not talk details.

Delusion, Failure, Recrimination