MY VIEW: Maya MacGuineas
While we continue to hope for a substantial budget deal that would address our long-term fiscal problems, it looks like a smaller deal is more likely. Replacing part of the sequestration with permanent long-term savings would represent progress, though more work will remain.
However, as CRFB President Maya MacGuineas wrote in zpolitics over the weekend, if lawmakers are looking toward a smaller deal, it becomes that much more that the avoid budget gimmicks and worsening the fiscal situation. Writes MacGuineas:
What is a budget gimmick? Simply put, it’s an accounting trick that allows lawmakers to artificially create or inflate budgetary savings. Imagine if you make some tough choices one month and are able to put away $100. When planning your budget for the next month, you decide to use those savings to pay your $100 heating bill and buy a $100 cell phone. It doesn’t take an economist to realize that budget isn’t going to work.
The example may seem extreme, but MacGuineas notes that Congress does the same thing on a larger scale. By taking advantage of the scoring conventions of the Congressional Budget Office, lawmakers are able to mask the deficit impact of their policies with phony savings:
For instance, the Congressional Budget Office only scores legislation based on its budget impact over 10 years, so Congress will often make sure that provisions that will increase the deficit don’t take effect until the second decade after a bill is passed. Projected war and emergency spending, including Superstorm Sandy relief, grows with inflation. If lawmakers rein that spending in by applying budgetary caps, they can claim bogus savings for unspent money. Lawmakers have also considered willfully disregarding the inevitable, like counting savings from expiring provisions — the Child Tax Credit or Pell Grants — that will almost certainly be renewed. Talk about counting your chickens before they hatch.
With our fiscal outlook the way it is, we cannot afford to move backwards on the budget. No matter what a final deal includes, policymakers at the very least need to make sure it's gimmick-free:
Our elected officials are smart enough to know that this issue is too important for tricks. The conference committee has an opportunity to stop the games and get serious about the debt before it is too late. We are counting on them to do just that.
Click here to read the full op-ed.
"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.