False Balance in the Fiscal Cliff Deal: Real Tax Hikes, Fake Spending Cuts


Neither Democrats nor Republicans are providing much in the way of details about the fiscal cliff negotiations, at least not on the record. But Politico reports a few details about what kind of deal we might be able to expect: Taxes will rise by $1.2 trillion or a little less. At the same time, "there will be at least $1.2 trillion in spending cuts and 'war savings.'" Presumably the idea will be for the spending cuts and tax hikes to appear to balance each other out. But it's only an appearance.

That's because claiming that so-called "war savings" are a spending cut is Washington's favorite budget gimmick. Doing so would allow legislators to take credit for savings that are already going to happen. Counting war savings would mean that almost no real cuts are necessary: The Congressional Budget Office scored it earlier this year as "saving" about $850 billion. That's money that was never going to be spent, but gets counted as a "cut" anyway. 

Finally, Politico reports that some sort of entitlement cuts may be part of the deal as well. What kind? Who knows? Republicans won't say what they want. And Democrats won't make an offer of their own. Nor are they likely to show up any time soon. The report also suggests that the cuts could end up totaling about $400 billion, or perhaps more, at least eventually. "Democrats want most Medicare and other entitlement savings to kick in between 10 and 20 years from now," the story says. Which, given the congressional history of delay and avoidance on long-planned Medicare cuts, may as well be never. 

So if Politico's report is right, that's where things stand: Real tax hikes, fake spending cuts, and a half-hearted gesture toward Medicare cuts a decade from now. If that's the deal, it's not much of one. 

NEXT: Disabled Abused Under CA's Care, Complaints Ignored

Budget Government Spending

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61 responses to “False Balance in the Fiscal Cliff Deal: Real Tax Hikes, Fake Spending Cuts

  1. “No, fuck you, cut spending!”

    1. Can’t be said enough.

      1. Someone should commission a blimp with that running on the side in LEDs, over and over again, with the blimp flying around DC non-stop. Wait, make that a zeppelin.

        1. For each congressman, we’ll hire somebody to hold a golden wreath above his head and constantly whisper “No, fuck you, cut spending” in his ear.

      2. Someone should go to Washington and be in charge of saying that every time that Obozo or Boner open their mouths while at the same time cracking their heads together like Mo.

        1. Would it be possible to laser that on to the side of the Moon facing us?

          1. “Wait, Marge, let’s not put away the binoculars just yet, I’m seeing something that looks like words on the Moon! Um, wait, it’s kind of hard to read. Okay, No–definitely no–oh, dear, it’s the f-word, better not look, honey. Alrighty, then it’s you. . .I think it says cut spending. No, f___you, cut spending! Well, that sounds like a good idea to me.”

          2. Maybe if it was space-based, but not if it had to go through the atmosphere first. The energy required would be huge, not to mention it would probably turn the air that it passed through into plasma.

            1. XKCD covered it pretty nicely.

            2. Well, I don’t insist on some giant laser carving out the words from Earth. We could send the device to the Moon.

              1. Alright, but we’re going to need to raise taxes and start fifty new entitlement programs to be able to afford this laser.

                1. I was just going to ask the LP to give all of its money to SpaceX for this program.

    2. And the response:

      “No, fuck you. That’s why.”

      1. “No, fuck you, cut spending!”

        1. Who do you think is going to win this futile exchange? Really? Them or you?

          1. “No, fuck you, cut spending!”

            1. So…not you. Got it.

              1. “No, fuck you, cut spending!”

                I can do this all day.

                1. Sure, knock yourself out. In the end its effect is…niente.

                    1. “No, fuck you, cut spending!”

    3. Robert Reich disagrees. From his Facebook page:

      What worries me most about the tactical maneuvers over the “fiscal cliff” and “grand bargain” is that official Washington seems to be losing sight of the larger picture: We still have a huge number of unemployed, and many of those who have jobs continue to lose ground. If we were a sane society, we’d raise taxes on the rich in order to afford a first-rate system of public education for all our peo
      ple, starting with early-childhood and extending through four-year college or technical; we’d borrow at historically-low rates (the yield on the ten-year Treasury is still below 1.4 percent) to put millions to work upgrading our crumbling infrastructure; and we’d turn our extraordinarily inefficient and costly healthcare system — the single biggest driver of future budget deficits — into a single-payer system focused on prevention and on healthy outcomes. Instead, we’re locked into a game of chicken over the budget deficit, and preparing to cut public investments and safety nets.

      1. You made that up. Please tell me you made that up.

        1. Dude, he’s a friggin’ Marxist. When he’s been on NPR, he says stuff that makes me want to drive off the bridge on the way home.

          1. We’re talking about a Berkely economics professor, of course he uses tortured logic.

            Shit, they let John Yoo teach law there.

            1. IT DOESN’T MAKE ANY SENSE

      2. “No, fuck you, cut spending!”

      3. He has a point. Maybe we just need to spend more money on schools, enslave doctors, and submit to some sort of health commissar who will make sure that we eat lots of healthy whole grains and no eggs, and everything will work itself out.

        1. a world filled with diabetic fatties.

        2. “In the long run we’re all dead.”

      4. Robert Reich
        Robert Bernard Reich is an American political economist, professor, author, and political commentator. Wikipedia
        Born: June 24, 1946 (age 66), Scranton
        Height: 4′ 11″ (1.49 m)


        1. I swear there is a correlation between being a tiny short pussy and being a leftist. Height envy or something.

          1. Do you think anyone’s ever tossed him? I would love to see how far I can throw him.

            1. I think I’m going to toss my cookies after reading his insane drivel.

          2. Huh. I’m pretty tall and, of course, libertarian.

        2. Are you intentionally or unintentionally micro-aggressing against short people? Because we need to know which reeducation camp to send you to.

        3. Something just occurred to me. Friedman was very short–I saw him (and David) in person at a conference in San Jose back in the 90s. I’d say that he wasn’t a leftist.

      5. Why are we listening to Wee-Man?

      6. hahahahahahahaha-more money for the teachers union, thats the answer, it will solve every problem we have!!!

      7. Holy shit.
        So the kind of people running this country think that the best way for me to find a job is to raise taxes on the people who might hire me, spend more money we don’t have on gov’t programs, and completely take out market based incentives from the healthcare/insurance industry.
        Holy shit.

      8. What’s not to like about a better educated unemployed? Hey, even some of them can quote Satre as they pound pilings into the ground for the refurbished bridges. And a single payer system is ideal and the single payer simultaneously can knock the extra-large soda cup out of peoples’ hands as they cut the checks. It’s a virtual paradise on earth. It’s only the “pie-in-the-sky” libertarians who can’t see it.

  2. I just crossed through one of those theoretical worm holes and folded time to arrive in the past. Therefore the theory has been proven correct, because I already commented on this article today, and there were other posts as well, which proves that others fell through the wormhole also. I wonder if any of them will arrive back here also? Maybe if they were more lucky than me, they went to some parallel universe where proglodytes do not exist.

  3. Ask for a fifteen percent increase in a program’s budget, give a ten percent increase, and call it a five percent cut.

    1. Sounds par for the course coming from an administration that calls letting people keep their own money, a gift.

  4. Hey Suderman,

    Nick said “public debt – which stands at more than 100 percent of total economic activity (GDP).”

    you said it was 80% a few days ago. Who is right?

    1. Nick.


      It’s at 100.8% of GDP according to the above.

      1. But why even track debt to GDP? The GDP doesn’t belong to the government (except the G part, which never should have been included in the formula.)

        Debt should be tracked as a percent of government revenues (i.e. taxes and etc.), which is around 666% now.

        1. More accurately if you are going to compare it to GDP why not include ALL debt sources since Federal Debt is only 1 type of debt the people of the US will have to pay back.

          In that case out Debt to GDP ratio is closing in on 400% and even then only if you exclude unfunded liabilities, include them and it is closer to 1200%

  5. If the Republican party caves on the taxes, there won’t really be much in the way of tax hikes either.

    Almost all of the Bush tax cuts would be extended, as well as probably the payroll tax cut.

    If you ask me, the R’s should pass a bill that does nothing EXCEPT extend the Bush tax cuts for people making less than $250,000. Let the House pass that and then recess for the Christmas holidays and let Obama and the Senate Democrats decide if they want to hold “middle-class tax cuts” hostage to domestic spending.

    1. NO. Cut Spending.

    2. The house should pass a bill that keeps all the current tax rates (i.e. extends the Bush/Obama tax cuts). Then let the Senate explain why they’re voting it down and screwing everyone.

  6. Cuts to projected spending increases = spending cuts.

    Where have I seen this trick before?

  7. “Democrats want most Medicare and other entitlement savings to kick in between 10 and 20 years from now”

    5 years after the world stops lending money to the brokest nation in the history of the world.

  8. we’d borrow at historically-low rates to put millions to work upgrading our crumbling infrastructure.

    1. The low rates are all for short term bonds. When you want to roll them over next year, they might be at much higher rates.

      Our infrastructure is not really crumbling at the Federal level, and we already spent 800 billion on it a few years ago with nary a result in terms of employment. Turns out roofers and real-estate brokers can’t become bridge builders after all.

    2. Oh, great, now we start up with the infrastructure merry-go-round


      We write a check and wait 15 minutes

      “Of course you know, these projects will have to go through the appropriate environmental impact assessments. And the appropriate civil and social impact assessments. Oh, and of course you know we’re going to have to set aside a number of contracts for the historically disadvantaged. And you did know, I assume, that the construction of these projects IS going to be paid at union scale. While we’re at it we should spend some of this money on areas underserved with infrastructure. We should build a highway in Sen. Bumblefick’s district to help it develop. And what makes us so wedded to roads and bridges anyway. In Europe and Japan they’re doing marvelous things with bullet trains and public transportation. And let’s not ignore human capital infrastructure…what?… we’re out of money….OHMYGODD WE HAVE AN INFRASTRUCTURE CRISIS WE GOT TO SPEND LOTS OF MONEY OR WE’LL ALL DIIIIEEEEE!!!!!

  9. Put yourself in a GOP congressman’s shoes.

    The electorate voted for Obama. They voted against Republicans for Senate. They barely kept you in office.

    Now, what in the hell do the public really want?

    I have no clue. You can argue it so many ways.

    Personally, I would LIB, let it burn, and vote present, but the voters might be incensed by that too.

    I feel bad for the GOP housemembers because people want them to “do their job” but then they immediately get blamed by the media for doing anything but agreeing with Obama.

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