The new House GOP budget for fiscal 2016 declares that “we do not rely on gimmicks or creative accounting tricks” to slash spending by $5.5 trillion and balance the budget in less than 10 years without raising taxes, but many beg to differ.
“This takes budget quackery to a new level,” said Rep. Chris Van Hollen of Maryland, the ranking Democrat on the House Budget Committee.
Steve Ellis, of Taxpayers for Common Sense, bemoaned the Republicans’ “bald faced attempt to evade the budget caps put in place by the 2011 Budget Control Act.”
“This isn’t budgeting, it’s gimmickry,” Ellis said on Tuesday. “And its blatant nature reveals more than a little contempt for taxpayers. Like they’re not smart enough to see through the ruse.”
Truth be told, both parties for generations have played games with the numbers and economic assumptions in crafting long-term budget blueprints, and the House GOP document is no different. The new 10-year budget for taxes and spending would balance the budget within the next nine years and even show a small surplus by 2024.
Asked how he responds to criticism of gamesmanship in crafting his budget, House Budget Committee Chair Tom Price (R-GA) said in a brief interview: “Well, I just don’t believe it. We lay out a very specific plan for how we get to [balance], in contrast with the president’s budget which never, ever, ever balances.”
Despite the chairman’s protest to the contrary, there is a widely held belief among many federal budget watchers that Price and his Republican colleagues had to resort to budgetary smoke and mirrors to create a pathway to a balanced budget without raising taxes. Here are five of the biggest gimmicks used:
End-running the defense budget cap: In a sop to fiscal disciplinarians, the budget technically adheres to the 2016 defense spending cap under the Budget Control Act. But in order to placate defense hawks who want to see a lot more spending, the new budget would slip the Pentagon an additional $40 billion through a new “Defense Readiness and Modernization Fund” using money from overseas contingency operations that are not affected by the cap.
Double-Counting on Obamacare: The budget once again calls for the repeal of the Affordable Care Act and elimination of the tax increases that help finance the health insurance program. At the same time, the budget assumes the same level of federal revenue over the next 10 years as the Congressional Budget Office forecast with those tax increases in place. In short, the new budget is counting on $1 trillion of tax revenue from a program the Republicans are trying to kill off.
Dynamic Scoring: For sure there are conflicting views on the long-term economic impact of federal tax and spending policy, but the GOP goal of balancing the budget hinges on the assumption that their policies will generate $147 billion worth of “dynamic economic growth.” Once dismissed as “voodoo economics,” the Congressional Budget Office reached the $147 billion figure based on assumptions provided the agency by Price and his committee. If the forecast proves inaccurate, then the $13 billion budget surplus projected for 2014 could turn into a substantial deficit.
Exploiting expiring taxes: The budget assumes that a slew of temporary tax breaks will be allowed to expire, which would result in about $900 billion of tax increases in the coming years — although almost nobody thinks Congress will actually allow those tax breaks to expire. The tax “extenders,” as they are known, are virtually certain to be reinstated.
Unspecified cuts to social services: Price is proposing $1.1 trillion of cuts in social safety net programs, but the budget proposal released Tuesday doesn’t say what they are. As Congress has found in the past, promising to cut from a huge category of spending is easy to do. Actually identifying the programs that will bear the cost is politically a lot more complicated.
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