CBO Analysis: Budget Deal Cuts 2011 Spending by $352 Million, not $39 BillionPosted: April 14, 2011 | |
This is hilarious. From the National Journal:
A Congressional Budget Office analysis of the fiscal 2011 spending deal that Congress will vote on Thursday concludes that it would cut spending this year by less than one-one hundredth of what both Republicans or Democrats have claimed.
A comparison prepared by the CBO shows that the omnibus spending bill, advertised as containing some $38.5 billion in cuts, will only reduce federal outlays by $352 million below 2010 spending rates. The nonpartisan budget agency also projects that total outlays are actually some $3.3 billion more than in 2010, if emergency spending is included in the total.
The astonishing result, according to CBO, is the result of several factors: increases in spending included in the deal, especially at the Defense Department; decisions to draw over half of the savings from recissions, cuts to reserve funds, and mandatory-spending programs; and writing off cuts from funding that might never have been spent.
According to Fox News, Congress is in a uproar about it.
Liberal Democrats remain opposed to the plan because of its trims and because of policy points, like its restriction of abortion subsidies, but a rebellion is spreading among conservative members of the House and Senate.
The problem is that in heralding the deal, Obama, Boehner and Reid played up $39 billion in cuts, which were assumed to be for the current fiscal year. But those cuts include some gimmicky accounting and the savings obtained from not tapping reserve funds for programs like Medicaid.
When the CBO crunched the numbers on how the deal would affect the projected $1.65 trillion deficit for this year, the result was a reduction of .02 percent.
So I guess we could still be headed for a shutdown? The House will vote on the bill today.
The real danger zone for the deal would be around 70 Republican defections. That would cast doubt on whether there are enough moderate Democrats [i.e., DINOs] to fill the gap and get to the requisite 217 votes. It would also be nearly a third of the Republican caucus in opposition, a weak showing for the GOP ahead of the even bigger battle over Obama’s request for an increase to the government’s $14.3 trillion borrowing limit.
Bond buyers will be watching for major fractures here. If the House GOP is in a riot, watch U.S. debt prices start to climb.
We are so f’d.