Debt Ceiling Bill: Where are the Spending Cuts?

I correctly argued that the so-called debt deal impasse was only a theatrical display meant to pander to voters (and the tea party movement) that there has been a standing opposition.

In truth, politicians from both camps had no desire to enact fiscal discipline. Instead, they colluded to use market hobgoblins to arrive at the 11^th hour deal.

Now that the debt ceiling deal had been passed at the Congress, we ask; where are the spending cuts?

Cato’s Chris Edwards says there’s none

More from Mr. Edwards,

the budget deal doesn’t cut federal spending at all.

House Speaker John Boehner’s bullet points on the deal say that it cuts discretionary spending by $917 billion over 10 years, as “certified by CBO.” These discretionary “cuts” appear to be the same as those in Boehner’s plan from last week. The chart shows CBO’s scoring of those spending cuts.

Wait a minute, those bars are rising! Spending isn’t being cut at all. The “cuts” in the deal are only cuts from the CBO “baseline,” which is a Washington construct of ever-rising spending. And even these “cuts” from the baseline include $156 billion of interest savings, which are imaginary because the underlying cuts are imaginary.

No program or agency terminations are identified in the deal. None of the vast armada of federal subsidies are targeted for elimination. Old folks will continue to gorge themselves on inflated benefits paid for by young families and future generations. None of Senator Tom Coburn’s or Senator Rand Paul’s specific cuts were included.

The federal government will still run a deficit of $1 trillion next year. This deal will “cut” the 2012 budget of $3.6 trillion by just $22 billion, or less than 1 percent.

The legislation does create a “Joint Committee” to design a second round of at least $1.2 trillion in spending cuts by November. Presumably, interest savings will be included in those “cuts” as well, reducing the amount of actual program cuts needed to about $1 trillion.

The debt ceiling bill looks more like legal skulduggery or prestidigitation

As Cato’s David Boaz neatly puts its

most of which promise to cut spending some day—not this year, not next year, but swear to God some time in the next ten years. As the White Queen said to Alice, ”Jam to-morrow and jam yesterday—but never jam to-day.” Cuts tomorrow and cuts in the out-years—but never cuts today.

Now that debt ceiling has been raised, expect the next round of asset purchase program from the US Federal Reserve