With a number of budget resolutions coming out, honest budgeting might be too much to ask for. As we took a look at the Republican (Ryan) and Democratic (Van Hollen) budgets, in fact, we found a number of gimmicks. Some of the major ones include:
- Doc Fix Gimmick: The House Republican budget creates what is known as a "deficit-neutral reserve fund" for the doc fix. Essentially, this is budget resolution-speak for having placeholder savings to offset the cost of the doc fix. This magic asterisk saves the budget from $271 billion of additional cost over ten years. There is no hint as to where these savings might come from, nor does the budget count the costs of enacting a doc fix. Although the House Democratic budget does include the cost of the doc fix in their numbers, they claim to pay for it with war savings, which brings us to our next gimmick described below.
- War Spending Gimmick: In the past, we've criticized the use of the "war gimmick," where policy makers take savings from a war drawdown already in place and use it to pay for new priorities. When the President's budget did this, CRFB President Maya MacGuineas reacted by saying:
Drawing down spending on wars that were already set to wind down and that were deficit financed in the first place should not be considered savings. When you finish college, you don’t suddenly have thousands of dollars a year to spend elsewhere – in fact, you have to find a way to pay back your loans.
The House Democratic budget goes further than this. It eliminates war spending after 2014--whereas the President spends $44 billion per year beginning in 2014--even as it claims to reflect the President's policies. This means that either they support paying for the war out of the regular budget -- which is a responsible policy if true but means they are proposing $350 billion of spending cuts without admitting so or including a plan to achieve them -- or else they are reverting to a Bush-era practice of failing to budget for war spending which they fully expect will occur.
- Sequester Gimmick: The Republican budget claims to replace the sequester with savings from reconciliation instructions to committees. As they claim, "There is bipartisan agreement on the devastation to America’s national security that would result if these deep cuts go into effect...this budget reprioritizes sequester savings." As we've explained, this statement is true for FY 2013: the budget replaces most of the sequester in that year with spending cuts required from other Congressional committees. However, the budget does nothing to address the sequester after 2013; instead, the budget keeps it in place and counts it toward their low debt numbers. As we've explained:
On the mandatory side, the sequester is allowed to cut spending across-the-board to various programs. On the discretionary side, the budget retains the overall levels of the sequester but keeps them classified as "allowances" -- which is budget speak for unspecified savings. In this way, it allows the apparent defense numbers to substantially exceed sequester levels (and BCA levels as well), while counting all of the sequester savings on the non-defense side.
If you remove the sequester entirely, it would add $900 billion of additional spending through 2022.
Getting our debt under control will require honest budgeting. In the meantime, we'll keep calling out gimmicks as we see them.