“Lord, make me chaste, but not yet.”-St. Augustine
I know a guy who’s 130 lbs. overweight, slowly dying from arthrosclerosis and diabetes. He’s been living a slouchy lifestyle for the past 10 years: fast food every night, hasn’t seen the inside of a gym since high school, smokes a pack a day. His doctors have been adamant: you must lose weight, start eating healthy, and otherwise get fit if you want to live much longer. Indeed, it was just this past summer when the doctors downgraded his life expectancy, telling him if he doesn’t get his act together, he’d better get his affairs in order.
So right then and there he made a resolution: “If I can’t lose 12 lbs. by Thanksgiving, I’m going to automatically trigger a new diet and exercise regimen, starting in January 2013. I’ll force my future self to lose 120 lbs. by 2021. It’s going to be painful, with half the weight loss coming from cutting calories and half from working out, so you can bet I’ll be motivated to start getting healthy right now.”
Think his plan will work? Neither do I. Yet when it comes to the actions of the Congressional “Super Committee,” which was attempting a fiscal version of this fitness plan, it’s amazing how reporters and pundits take this phony resolve seriously. The Super Committee did indeed miss its deadline for a massive “spending cut” plan. Their failure was so inevitable that they went ahead and announced it two days early.
I don’t know which is more absurd: that their goal was to find a paltry $120 billion in spending cuts each year for the next 10 years, or the idea that they could “trigger” future spending cuts in a budget that only a future Congress and future President will have full control over. (By the way, $120 billion is only 3% of total federal spending).
But it’s not as if any of these “cuts” would matter, even if the trigger actually worked. You see, real spending cuts—you know, the kind where next year’s number is lower than this year’s—are like sasquatch, space aliens, or this year’s NBA season (so far): lots of people are talking about them, but they don’t really exist.
As Veronique de Rugy, an economist at the Mercatus Center, points out, the “automatic triggers” in the 2011 Budget Control Act rely on the old political trick of baseline budgeting. Congress projects future spending at a given annual rate of increase, say 10%. An increase of only 5% can then be billed as a 5% “cut” from the baseline level. But spending still goes up, not down; therefore be advised that, in Washington, the word “cut” really means “smaller increase.”
It gets worse; even if the automatic cuts were real, and large enough to put a dent in the deficit, current Congressmen have already pledged to override them in the future. This should surprise no one with knowledge of how Congress traditionally operates. According to Stan Collander of the Washington Monthly, “Federal budget agreements have seldom, if ever, gone the distance. Instead, they have always been changed, waived, ignored or abandoned long before they were scheduled to expire.” Collander cites several sordid and sobering examples from recent US history where solemn budget deals were broken when their strictures became inconvenient for later Congresses.
So in summary, the Super Committee’s antics are irrelevant. Even if they could have somehow pulled off a major deal, there still would not have been any real cuts, and these “cuts” would be imposed on future Congresses who could simply ignore them by repealing the 2011 Budget Control Act and passing their own budgets.
If we ever hope to restore fiscal sanity to Congress, drastic measures will be required. Perhaps a balanced budget amendment would help us avoid a Euro-style meltdown, but alas that must wait until the next election. Most important is vigilant citizenry that refuses to accept this nonsense. I just hope enough of us can wake up before it’s too late.
Tyler Watts is an assistant professor of economics at Ball State University.
image from Wikipedia