In Washington, the word “bipartisan” usually means “watch your wallet.” If anyone needs any further proof, just look to the bipartisan budget agreement announced yesterday.
Hailed in the name of “coming together” and “compromise” to “get things done,” the proposed deal is a dog’s breakfast of every bad budgetary idea to land on the table in recent months.
It’s a deal so bad that even incoming House Speaker Paul Ryan says it “stinks” (although, it appears, he will still be voting for it). Still, current speaker John Boehner, House Minority Leader Nancy Pelosi, Senate Majority Leader Mitch McConnell, and Senate Minority Leader Harry Reid, who hammered out the deal behind closed doors, can probably put together enough votes to push it through, with a united Democratic caucus and just enough pro-defense spending Republicans.
The deal essentially guts the spending limits in place under the 2011 Budget Control Act which brought about sequestration. It would increase spending by at least $80 billion over the next two years above current spending limits, split equally between domestic and defense spending. It would also increase funding for the military’s Overseas Contingency Operation slush fund by $32 billion, meaning the total spending hike would top $112 billion. More domestic spending for Democrats. More defense spending for Republicans. Everyone wins except the taxpayers.
But the deal is much worse than just the particular spending increases it contains. Sequestration may have been a blunt instrument but it has been one of the few successful restraints on federal spending in recent years. Without it and the caps in the Budget Control Act, federal spending would have been at least $200 billion higher since 2011.
This really would mark the second consecutive budget deal in which Congress agreed to ignore the caps. That’s a pretty clear signal that Congress plans to return to its wide open tax and spend past.
The deal would supposedly offset these increases through a rehashed collection of budget gimmicks such as selling some of the strategic petroleum oil reserves, auctioning telecommunications spectrum (again), and making changes to the crop insurance program. Been there. Done that. Still paying for the t-shirt.
In fact, this deal actually weakens long term entitlement reform. For example, it cancels coming increases in Medicare Part B premiums for the 30 percent of beneficiaries not already shielded from premium increases by a hold harmless provision. It would also allow Congress to avoid reforming the Social Security Disability Insurance program by shifting funds to it from Social Security’s retirement program. The move weakens Social Security’s overall financing, but props up the disability program for another six years.
So we will spend more on domestic discretionary programs, more on defense, and more on entitlements, while papering over the cost. Happy days all around.
The deal would also raise the debt ceiling by enough to last through March 2017. In fact, the deal doesn’t just raise the debt ceiling, it simply does away with it for a year and a half.
Of course, no one really expected Congress not to raise the debt ceiling eventually. But this deal surrenders even token Republican leverage.
We’ve been fortunate the last few years. A combination of renewed economic growth and sequestration-driven spending restraint has reduced our budget deficit to just (just!) $435 billion. But this is only a temporary respite. Within just a couple of years, deficits are expected to start growing once more. By 2025 we could again see $1 trillion deficits. Worse, our $18.2 trillion debt is scheduled to rise to $26.9 trillion over the same period. And all of this is before the big cost of entitlements really kicks in. By some measures, our real debt tops $80-90 trillion.
But at least we’ve found something everyone in Washington can agree on: screwing the taxpayer.
Cross-posted to Cato@Liberty