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Congress’s $38.5 Billion Scam

April 13, 2011 By: Scott Spiegel Category: Economy

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The deal Congressional Republicans made with Democrats last week to cut the federal budget and avoid a government shutdown is the scam of the decade.

Mainstream media, conservative commentators, and Republican politicians call it a grand victory for the GOP, showing as it does Speaker of the House John Boehner’s suave negotiating skills, the GOP’s ability to nudge Democrats from their opening position, and Republicans’ luck in getting $6 billion more in cuts than Boehner had asked for.

FOX News’ Carl Cameron crowed, “Who Won the Shutdown Showdown?  It Wasn’t Even Close…  Democrats claimed they met Republicans halfway after the $10 billion in cuts that already passed this year were approved.  They settled late Friday night at three and a half times more.  Boehner came in $8.5 billion higher than the halfway point between his high offer of $61 billion in cuts and the Democrats opening bid of zero cuts.”

All of these numbers are meaningless, constituting as they do microscopic slivers of the federal deficit.

To put the cuts in perspective, CNS News reported that the federal debt jumped $54 billion in the eight days before Congress approved the $38.5 billion in cuts.  The cuts leave the 2011 budget $773 billion greater than the 2008 budget, higher by about the same amount as the Democrats’ 2009 stimulus bill.

Congress is negotiating over grains of sand while a dune is about to collapse on us.

Also riding the self-congratulatory bandwagon was the CATO Institute’s Chris Edwards, who declared, “It is a victory for freshman conservative Republicans.  The real question is whether this is the beginning of a sustained movement, or a one-shot deal?  I’m an optimist, so I think it is the first of many spending-cut actions…”  I’ve seen wily Democrats and spineless Republicans in action, and I’m a pessimist.

Edwards: “Also, if the baseline is down $38 billion this year and that is sustained or built upon, it’s down $380 billion or more over 10 years.”  The operative word here is ‘and.’

The other operative word is ‘if.’  Not only do the alleged $38.5 billion in cuts constitute just 1% of Obama’s proposed budget, they consist of: things that had no chance of being funded, unused funds from prior years, funds that hadn’t been specified for projects, non-renewals of things meant to be one-off expenses, one-time cuts that will be reversed next year, and salaries for czars who have already resigned.

Half the cuts involve, as The Associated Press put it, “simply mopping up pools of unused money spread across the budget” and using them “to shore up day-to-day agency budgets and other programs like health research.”  In other words, half the cuts don’t involve actual cuts.

But the Heritage Foundation’s Ron Utt gushed, “Without examining the numbers in any detail I consider it an important win for our side, and a momentum boost for the bigger issue to come: the FY 2012 budget battle.”  Without examining Lindsay Lohan’s parole record in any detail, I declare her fully rehabilitated and fit for polite society.

There’s also the nature of the cuts to consider.  Here are a few things Republicans cut: $2 billion from Defense, $1 billion from Homeland Security, $600 million from the Army Corps of Engineers, and $5 billion from a crime victim compensation fund.

Here are a few things Republicans didn’t cut: ObamaCare, the Agriculture Department, NPR, PBS.  Republicans also left out resolutions blocking the Environmental Protection Agency from enforcing global warming restrictions and preventing implementation of new Wall Street regulations.

Republicans’ defense—they had to compromise on the 2011 budget so Democrats would work with them on the debt ceiling and the 2012 budget—is as fallacious as they come.  If Republicans can’t stand up to Democrats on pennies, what chance is there they’ll stand up on dollars?

Why should we believe Boehner will side with us tomorrow?  Boehner concluded a recent op-ed in USA Today saying, “[W]e are committed to using our limited power to maximum effect in the effort to end the uncertainty facing job creators and put our economy back on a path to job creation and prosperity.”  That’s not a strategy for fighting Marxist Democrats, it’s a campaign slogan.

Even Paul Ryan, bless his Path to Prosperity proposal to cut $5.8 trillion from spending over the next decade, fell for the trap.

If Republicans do anything to prevent the $14 trillion debt ceiling from being raised and make meaningful cuts to entitlement spending, it will be in spite of the first step they gutlessly refused to take on the 2011 budget.

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