Comparing Spending in the House and Senate Budget Plans

Via Stanford University economist John Taylor, here's what you get when you compare proposed federal spending as a percentage of the economy in the budget plans put forth by Rep. Paul Ryan for House Republicans and Sen. Patty Muray for Senate Democrats: 

Courtesy John Taylor

Taylor notes that "the obvious differences between the plans are that the Senate would (1) tax more than the House by .7% of GDP, (2) spend more than the House by 2.8% of GDP, and (3) run a deficit larger than the House by 2.1 percent of GDP, where the percentages are based on 2023."

Both budgets would increase total federal spending. But if we adopted and stuck to the House GOP budget plan as presented (and yes, there are a number of missing details and some unrealistic assumptions built into its framework), it would keep its spending increases in check enough to zero out the annual budget deficit in a decade. The Ryan budget is far from ideal, but it aims for a sort of spending moderation that the Senate Democrats' doesn't remotely attempt. 

Comments

[Fist of Etiquette]

What if we took Murray's plan but still did away with Obamacare? That's a compromise I think we can all get behind.

[John]

Look at the historical outlays line. IN 2007 is when it starts to go through the roof. And then amazingly starts to fall in 2011. It is almost like who controls the House is more important than who controls the Presidency.

[Fatty Bolger]

You'd almost think that all spending originates in the House, or something. Weird.

[John]

Spending actually went down from 04 to 06. Amazing.

[Bardas Phocas]

I recall that year of austerity.
I hunted children to feed myself, but they were small and stringy. I found it better to set traps near fast food resturants to get those fattys. Succulent.

[LTC(ret) John]

A pit trap in front of an Old Country Buffet, and you ate for weeks!

[some guy]

I think that spending was more tied to the economy at the time than who controlled the House. A big part of the reason spending as a percentage of GDP rose is that GDP fell precipitously during that time. Democrats in Congress used the Stimulus to drastically increase spending on top of the recession, but I find it hard to believe a Republican controlled Congress would have behaved very differently. The spending increase might have been a bit smaller and certainly would have been focused in different areas, but there still would have been an increase.

[John]

But the economy was still goo in 07 and a lot of 08. The economy didn't tank until late 08. Look at this table. Spending had flattened out even in absolute terms in 05 and 06 and then went crazy in 07 and 08. It is almost like something happened in early 07.

http://www.whitehouse.gov/omb/budget/Historicals

[Palin's Buttplug]

That is true. John can't read a fucking graph though.

[The Late P Brooks]

where the percentages are based on 2023.

In other words, meaningless, made-up numbers.

[Mike M.]

No shit. These ten year budget "plans" are the biggest time and money wasting bullshit going. There wasn't a single person in America ten years ago really knew what our debt would be today.

[sarcasmic]

Glenn Beck is sobbing about having to put down a pet. What a fucking pussy. It's only an animal.

[John]

But animals are generally better than people. I am with Beck on that one, although I wouldn't be sobbing in public over anything.

[sarcasmic]

He's crying like a little girl. Wait. He just turned off the waterworks. Just like a girl. Glenn Beck is a girl!

[some guy]

Why the hell are you watching Glenn Beck?

[sarcasmic]

Who said anything about watching?

[Stevie OneLeg]

Beating off?

[Shine on, Nikki Diamond]

You know crying like a little girl is like, kind of his thing, right?

[Hugh Akston]

I thought that was your thing.

[Shine on, Nikki Diamond]

Yeah but I don't do it on TV or the radio.

[sarcasmic]

I dunno. I only listen to his show a couple times a month.

[Shine on, Nikki Diamond]

Only the subtitle of this book is inaccurate.

[sarcasmic]

I like to keep his show in the background once in a while. He's always good for a laugh.

[Palin's Buttplug]

Beck is a libertarian! He actually talks to Penn Jillette once in a while. That proves it.

[sarcasmic]

Yeah. Earlier he was mockingly talking about the drug war as if ending it was something only silly liberal collectivists would support.
Quite the libertarian.

[Palin's Buttplug]

I really have developed an LP Purity Test even though I mock the idea. It only took about 30 minutes on Excel.

Beck scores lower than Bill Maher but neither comes close to Penn Jillette.

[Night Elf Mohawk]

Three of my four grandparents are dead. None of those deaths was as traumatic as one of my dogs dying.

[R C Dean]

Yeah, well, I cry when my pets die, too.

In private, though. Like a man.

[Marshall Gill]

Yeah, well, I cry when my pets die, too.

In private, though. Like a man.

Yep.

[Lord Humungus]

+1 Man Mist

[The Late P Brooks]

Glenn Beck is a girl!

Good morning, Rip Van Winkle. Have a nice nap?

[OldMexican]

Taylor notes that "the obvious differences between the plans are that the Senate would (1) tax more than the House by .7% of GDP, (2) spend more than the House by 2.8% of GDP, and (3) run a deficit larger than the House by 2.1 percent of GDP, where the percentages are based on 2023."

But... aggregate demand! We'll spend our way into perplexity!

The other interesting thing about these budgets - whether the Senate version or the House version - is that the committees continue to assume future growth patterns that were only conceivable when people were more free to pursue their endeavors, like back in - oh, dare I say - the 20's. Most people here in the U.S. do not seem to remember that the last two decades of "growth" were fueled by cheap money from the Fed, and that the ONLY industries that grew in strides were the computer and telecom industries only because the government wasn't quick enough to regulate either into oblivion, albeit it is not like they didn't try.

So on what exactly are these bozos basing their assumptions? They're either they're fooling themselves or they're playing *us* for fools. There's NO way the U.S. can outgrow its current obligations. Both House and Senate are simply playing for time.

[R C Dean]

Its the growth assumptions that are a, if not the, fundamental flaw here. You need to factor in the drag of our now-massive outstanding debt, which knocks growth down. Not to mention the drag of our massive regulatory state.

I don't think anyone who assumes average growth of more than 2% is being the least bit serious.

Throw a 2% growth assumption at these projections, assume tax revenue tracks growth, and I suspect you'll get a much grimmer picture. Sounds like a de Rugy article to me.

On the revenue side, assume 19% of GDP gross federal tax revenue (a hair above the historical average, just to be nice). Grow it at 2% a year. See what you've got, and you'll have a target for spending.

[R C Dean]

Just to get the ball rolling, US GDP for 2013 should be around $16TT. 19% of that is $3TT (note: this requires a tax increase, I believe, so we're still being crazy "optimistic" on the spending front). At 2% growth, that leaves you with $3.65TT in ten years, in 2013 dollars.

During FY 2012, the feds spent $3.54TT. Theoretically, you could balance the budget in 10 years if you raised taxes now to 19% of GDP and put a hard cap on spending. Given the growth wired demographically in to entitlement programs, that hard cap will require actual cuts.

[The Late P Brooks]

Based on my rigorously structured 10-year revenue projections, I see no reason why I should not break ground this spring on a 12,000 sq ft concrete steel and glass monument to myself. I'm sure the bank will be happy to give me a couple million bucks to get the ball rolling.

[eyeroller]

I'd prefer a graph with a baseline of zero, so it wouldn't exaggerate the difference.

[AdamJ]

I had the same thought. This graph is Krugman-esque.

[The Late P Brooks]

Not to mention the drag of our massive regulatory state.

No kidding. Every time I hear the President and his minions jibberjabbering about getting the economy going again I laugh.

It's a sad, slow, pained laugh, but a laugh nonetheless.