Snake-Oil Deficit Savings
Like things you spot in your side-view mirror, many of the budget numbers flitting around the debt talks are larger than they appear
As those talks on avoiding the so-called fiscal cliff meander along, it's no surprise that lawmakers are lining up to protect or promote their special interests.
Boosters use a variety of tactics, but one favorite is to claim the policy or program would reduce the deficit and so can be used to offset the across-the-board cuts slated to start on January 2. But it's a case of budgetary "buyer beware" because, like images in your side-view mirror, many of the budget numbers are larger than they appear.
My favorite example is the Agriculture Committee leaders' generous offer to include a Farm Bill that would save up to $35 billion over the next 10 years as a budget offset in the pending deal. Yes, the Congressional Budget Office (CBO) cites those figures, but let's look a little closer.
Only in Washington can legislation that is going to cost nearly $1 trillion be used for deficit reduction because it spends a couple percent less than would have been spent without the bill, a scenario known as a baseline. And the CBO's track record on estimating Farm Bill costs is worth a look. Its estimates for the 2002 and 2008 Farm Bills fell short of the mark by more than $400 billion.
The last thing the fiscal cliff deal should include is major agriculture policy that doesn't save much and would leave us with new headaches for the next five years. It's just these kinds of spending policies that got us into trouble in the first place. Nice try, Agriculture Committee Chairs Sen. Debbie Stabenow (D-MI) and Rep. Frank Lucas (R-OK). But you've had your chance for the last 22 months. Let's wait for the next Congress to wrap up the Farm Bill.
Another special-interests tactic is wrapping your pet project in the guise of creating new revenue. You could, say, push for more oil and gas development and then count speculative increased revenues as an offset.
Considering the industry isn't drilling on all the land it has access to right now, it doesn't seem likely that we'll be seeing increased royalty revenue from new drilling sites for quite some time.
We're also hearing politicians talk endlessly about savings that have already been agreed to as though they were something new. While President Barack Obama can claim the savings in the Budget Control Act as an achievement, talking about them as part of a new fiscal deal is almost like counting them twice.
The fiscal deal must not be used to enact new and irrelevant policies.
In the end, Congress and the White House need to avoid all these snake-oil deficit schemes. Our elected leaders need to come up with the offsets to delay implementation of sequestration by six months, hammer out a deal to extend tax cuts for the short term, patch the Alternative Minimum Tax, and fix the Medicare doctor payment cut. Then they need to establish a rigid process using the existing budgetary mechanisms to force our lawmakers to come up with trillions of dollars in spending cuts, revenue raisers, and entitlement reform over the next two years.
That's a lot to ask from the least productive Congress since WWII. But to paraphrase former Pentagon chief Donald Rumsfeld, you go to legislating with the policymakers you have, not the ones you might want or wish you had. It's time to get it done without the gimmicks.
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