Despite all the rancor and political infighting on both sides of the aisle, the final Continuing Resolution (CR) for fiscal year 2011 was passed by comfortable margins in both chambers of Congress. In the House, the vote was 260-167, with 59 Republicans and 108 Democrats rejecting the deal. In the Senate, the final vote was 81-19 with 14 Republicans and 5 Democrats dissenting. It will head to the president’s desk where Mr. Obama is expected to sign it. Thus, the latest threat of a government shutdown has been averted. But much like the president’s 2012 budget plan just unveiled Wednesday, the remainder of the 2011 budget is an exercise in fuzzy numbers deception. And probably as many Republicans as Democrats are hoping that the public won’t take notice of the ruse.
First, the compromise itself. Republicans, under pressure from their freshman class in Congress, many of whom were the beneficiaries of Tea Party politics, started out with the intention of lopping $100 billion from the 2011 budget. $100 billion became $61 billion in fairly short order, already upsetting many of the new members who expressed their displeasure when 54 of them voted against the last continuous resolution designed to prevent the government from shutting down. When an 11th hour compromise among the president, House Speaker John Boehner, and Senate Majority Leader Harry Reid was reached, the number had been whittled down to $38 billion, with Boehner calling it the “best deal [Republicans] could get,” and president Obama touting it as the “biggest annual spending cut in history.”
Both men were apparently wrong. According to a Congressional Budget Office (CBO) estimate, the “make-or-break” deal funding the federal government through the remainder of the fiscal year saves only $352 million. Much of this is due to the kind of sleight-of-hand accounting in federal budgeting that makes hard numbers elusive, to say the least. For example, $8 billion in cuts to domestic programs and foreign aid are offset by nearly equal increases in defense spending. Other “cuts” come from projected spending that may never occur, and still others from seemingly arcane budget rules which allow them to be declared as such if they take away spending from one program, even if the money is used to fund increases in other parts of the legislation. Such “savings” amount to $17.8 billion, yet virtually none of it is used to actually reduce the deficit. Another factor is timing: since the current fiscal year is more than half over, cuts in new spending authority, along with slower spending grants used for infrastructure projects, won’t be immediately registered on deficit summaries.
Some Republicans expressed their disdain. First-year Rep. Tim Huelskamp (R-KS) characterized the deal as “phantom savings” and promised to vote against it. “It’s worse because of the expectations,” said an aide to another conservative House member. “We knew that not all of the $39 billion would be real cuts, but to find out that almost none of it was real was very disappointing.” An aid for the GOP senator questioned the deal as well. “We were getting $2 billion a week,” he offered. “Then we end up with $350 million for six months?”
Yet Republican leadership successfully endeavored to keep yesterday’s vote in context, saying that it was the result of “cleaning up the Democrats’ mess from last year,” a reference to the fact that the Democratically-controlled 111th Congress punted on their obligation to enact a budget for 2011. This was the first time since modern standards were adopted in 1974 that Congress failed to enact an annual budget, which is why a series of continuing CRs–including this one–became necessary. GOP leaders further reminded their members that this budget had to be resolved before the far more important work on the 2012 budget could begin.
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