Wednesday, July 27, 2011

The White House Explains Why $950 Billion Equals $1.2 Trillion

If you want to understand D.C. math, check out this OMB defense of the Boehner plan, as explained by Ezra Klein:
On Tuesday, the Congressional Budget Office assessed Boehner's proposal and concluded it would cut spending by about $950 billion over the next 10 years. Boehner had promised something closer to $1.2 trillion, and so his office immediately promised to head back to the drawing board and amp up the cuts. "We promised that we will cut spending more than we increase the debt limit – with no tax hikes – and we will keep that promise<" said Boehner spokesman Michael Steele. "As we speak, Congressional staff are looking at options to re-write the legislation to meet our pledge."

Enter OMB Director Jack Lew. Earlier in the day, his office had issued an almost-veto threat on behalf of the White House. So no one would mistake them as fans of the Boehner plan. But in a blog post Tuesday evening, Lew rallied to the plan's defense, arguing that Boehner's plan only undershot its spending target because the CBO tested it against the "adjusted March baseline," which includes the cuts passed as part of the appropriations deal that kept the government's lights on earlier this year.

Why does that matter? Because depending on which baseline you use, the cuts don't need to be as deep. Lew argues that the two parties have agreed we need to cut $4 trillion starting from the CBO's January estimate. And if you start from that estimate, Boehner's plan cuts $1.1 trillion.
Keep in mind that this is also the budget plan that puts the biggest spending cuts off until the year 2021.

No comments:

Post a Comment