Debt Plan Gimmicks Are Go!


So much for devastating debt-deal cutbacks: House Republicans are pointing to news reports noting that the debt deal proposal put forth by Democratic Senate Majority Leader Harry Reid fails to meet his stated deficit reduction target of $2.7 trillion. According to the Congressional Budget Office, Reid's plan undershoots its deficit goal by about $500 billion.

Nor is that the only way in which Reid's plan falls short: $1 trillion of its scored deficit reduction comes from war-spending gimmickry: Typically, the Congressional Budget Office factors in war spending at constant level that grows with inflation—even in the midst of a troop drawdown. Reid's plan takes advantage of this by essentially instructing the CBO to go ahead and price an already-planned troop reduction into the budget. So Reid's plan gets credit for roughly a trillion bucks in savings that would happen anyway, regardless of whether or not his plan passed. The AP calls this a "glaring $1 trillion ploy."

Reid, however, wasn't the first Congress critter to rely on this all-too-obvious trick: House Republicans used the same scoring gimmick in the budget plan they voted for earlier this year. Of the roughly $6 trillion in deficit reduction they claimed Budget Committee Chairman Paul Ryan's plan would produce, about a trillion bucks came from factoring in the troop drawdown.

And while House Majority Leader John Boehner is pointing to the lower-than-promised CBO numbers posted for the Reid plan, his plan is having scoring trouble of its own. As Mike Riggs noted this morning, Republican leaders promised that their plan would produce a trillion-plus in deficit reduction—but the number crunchers disagreed, giving Boehner credit for just $850 billion in actual deficit savings. Boehner's staffers are reportedly ransacking the Capitol looking for savings (here's a few ideas that don't require budget trickery), but in the end, reports National Journal, they may simply opt to aim a little lower:

[Republican] leaders are considering finding additional deficit-reduction measures or lowering the amount by which Boehner's proposal would increase the debt ceiling, currently at $900 billion, to a number lower than the $850 billion deficit cut projected by CBO. Lowering the debt-ceiling figure would maintain the GOP pledge to enact spending cuts in excess of the debt increase.

Even the officially scored savings in the Boehner plan are far from certain: The cuts trickle into effect slowly over the course of the decade, with a mere $5 billion coming in the next budget year. But delayed cuts planned by one Congress are hard to enforce on the next: Appropriators can just give themselves the authority to spend more money. And while Boehner's plan supposedly enforces them with a trigger mechanism, deficit triggers aren't a surefire mechanism either: In the 1980s, Congress passed Gramm Rudman Hollings, a deficit trigger mechanism that called for automatic across the board cuts if certain targets weren't met. But Congress failed to meet the targets, the enforcement mechanism didn't produce the intended results, and after a few years, they ditched the system entirely.

Both the Reid plan and the Boehner plan, meanwhile, call for the creation of Joint Congressional Commissions instructed to find further deficit savings. Boehner's deficit committee is tasked with finding $1.8 trillion in cuts, which would be required in order to further increase the debt ceiling. Reid's commission is charged with looking for ways to pare deficit spending down to about three percent of GDP, which many economists consider the maximum sustainable amount. 

Creating a commission to solve a problem that you don't want to solve yourself is the oldest move in the Congressional Dodgeball playbook. As political point scoring, it works well enough: You create the commission, pat yourself on the back for having done something, and then wait for voters to forget about it.

But as practical policy, congressional commissions are usually about as useful as a stack of clever white papers: They may (or may not) have great ideas, but it doesn't matter if legislators ignore them. And in both the Reid and the Boehner plans, each house of Congress has the option to give the commission's recommendations a thumbs down. If legislators in the two parties can't come up with sizable cuts they can agree on now, is it reasonable to believe that assigning a commission to do it for them will somehow pave the way? The only certainty is that it creates a politically useful delay. 

Digging into the structure of the two plans is like tearing opening a giant package only to find out it's full of packing peanuts: They may look big on the outside, but there's precious little of substance within. The debt limit showdown, if it ever had a point, was supposed to be about finding a way to address the reality of America's unsustainable debt. Instead, it turned into a cheap game of political brinksmanship, with both parties trying to distract voters while they conjure up ways to avoid the problem.