3 Things You Need to Know About Congressional Budget Deal

December 11, 2013 - 1:39 PM

Many had high hopes that the first budget conference in four years would make a substantial down payment toward fixing the U.S. spending and debt crisis. The new "Bipartisan Budget Act" thoroughly disappoints. While we dig through the details for a more complete assessment, here are three key facts on the sour deal:

1. It busts through supposed spending "caps." The way Congress operates, it's ridiculous for Members to set spending caps. They just keep busting right through them. The deal announced yesterday raises discretionary spending above the bipartisan spending agreement forged in 2011 as part of the Budget Control Act. Spending for defense and non-defense domestic programs would be raised by $45 billion in 2014 and by $18 billion in 2015.

Once again, Congress has fallen into its old and destructive habit of trading more spending in one area for more spending in another. This is a bad "compromise" that keeps increasing spending, when just a little more effort to eliminate bad government programs and reduce wasteful spending could have saved taxpayers money instead.

2. It taxes and spends. The agreement says that the increased spending is fully offset elsewhere in the budget, using a mix of spending cuts and non-tax revenue. Make no mistake, raising revenue to spend more is simply taxing and spending. If anything, automatic spending cuts could be exchanged for targeted spending cuts. Trading spending cuts for more revenue, however, grows the burden of government. After all, Washington suffers from a spending problem, not a revenue one.

3. It spends now and delays savings till later. The budget deal would spend $63 billion more over the next two years-but take 10 years to make up for this splurge. This is a common Washington gimmick. To the conferees' credit, the deal suggests one-third in additional deficit reduction-the details of which remain to be evaluated.

The budget conferees failed to make substantive reforms to the real drivers of spending and debt: the entitlement programs. Representative Paul Ryan (R-WI) and Senator Patty Murray (D-WA) forged a deal that would increase spending immediately, while delaying deficit reduction till later and trading spending cuts for more revenue. Far from simply being another missed opportunity, this deal keeps the nation on its fiscal collision course.

Editor's Note: Romina Boccia focuses on federal spending and the national debt as the Grover M. Hermann fellow in federal budgetary affairs in the Roe Institute for Economic Policy Studies at The Heritage Foundation.