Debt Ceiling Deal: The Devil Is In The Details

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  • Anonymous

    Thank you, Leo, for the voice of clarity indeed.  Unfortunately too many who frequent progressive sites think that by typing out their dissatisfaction with Obama they are somehow going to effect change.  They think they’re getting their voice out there, and they’re “holding Obama’s feet to the fire.”  I stress over and over in these blogs that Obama doesn’t have time to surf the Internet, so the only effect of whining in the Comments sections of liberal sites is, through peer suggestibility, to reduce Democratic enthusiasm, voting, volunteering and donating.  Call or fax the White House instead.  Sure I wish Obama could accomplish more in some areas, but he has managed to push through a hell of a lot, in spite of unprecedented opposition.  People can whine all they want, but tag every post with, “And if you don’t get out and vote we’re all screwed!”  
    Thanks again–the voice of reason is so refreshing these days.

  • http://www.leosoderman.com Leo Soderman

    I might differ only slightly with your statement. I don’t think all Republicans wanted the economy to tank. I think that there are a significant number who understood the dangers of not raising the debt ceiling. But there are also significant numbers of Tea Party-affiliated Republicans who don’t believe budget projections, CBO statements, or anything else, and are bound and determined to remove as much power from the federal government as possible. In this case, they felt allowing it to default would be just fine.

    Most certainly, the stated goals – per McConnell – are to remove President Obama from the presidency. And they will work against him at every step. Most of the folks realize there are some limits. The Tea Party folks don’t care about those limits, and are more than happy to act like bulls in a china shop when it comes to governance of the country.

    Given that, there is this new dynamic that has to be dealt with on both sides of the aisle. Democrats have to realize that they are not dealing with just the Republicans, but with the Tea Party. A prime example of this is the fact that Boehner could not get *his own legislation* passed. That’s not the Republican mode of operation from the past. They have usually been in lockstep. But the Tea Party has changed that.

    Meanwhile, Republicans are coming to the realization that anything they do has to pass muster with the Tea Party, and that taints any dealings they are going to have. They can’t act as they might previously, because they don’t have the tight control they used to have on members.

  • Anonymous

    What do you find so enraging about the assertion that the left stayed home?

  • http://www.leosoderman.com Leo Soderman

    Let’s try some links:

    Young Voter Turnout Fell 60% from 2008 to 2010; Dems Won’t Win in 2012 If the Trend Continues – http://www.thenation.com/blog/156470/young-voter-turnout-fell-60-2008-2010-dems-wont-win-2012-if-trend-continues

    Young voters went overwhelmingly for the Democrats in 2008, yet didn’t show up in 2010. Plenty of qualified analysis there.

    Non-Voters: Younger, Single, Low Paid… Democrats? http://abcnews.go.com/Politics/vote-2010-election-voters-outnumber-voters-midterms-pew/story?id=11985301

    In the Pew survey quoted, 50% of non-voters identified as Democrats, while only 30% identified as Republicans. That’s a huge disparity. Why would there be 20% difference? Why did they not vote?

    These are the first two I found in just a few minutes. There are many more. Exit polls showing that although the country is fairly evenly split between Dems and Repubs, there was as much as a 15% difference at the polls with R’s having the advantage.

    Yes, independents broke for the right. But D’s did a poor job of getting the youth vote to the polls, and a poor job of getting people to vote D in general.

  • Anonymous

    Because it is a lie being told frequently by people who know better, and repeated by people who don’t, often in the name of “balance” by setting up a false equivalence between the “far left” and the “far right”. Tea Party Republicans lie, we Democrats don’t need to stoop to their level. We can acknowledge the truth, they did a good job last cycle in getting more of their people to turn out, and we need to do better.

  • http://www.leosoderman.com Leo Soderman

    This seems like a contradiction. Perhaps you can clarify:

    You say the left *did* show up, that statements to the contrary are lies.

    Then you say the R’s did a better job of getting people to turn out. Which implies that people who could have voted D *did not* turn out – which is what is meant when people say “D’s didn’t show up”.

    How are those two statements not mutually exclusive?

  • Gbledsoe

    Just a thought, though — even though the Bush tax cuts expire before the new Congress and “maybe” new President take office, there is nothing to prevent a Republican Congress and Republican President from pushing through an even more ridiculous tax cut in 2013. Moderate Republicans would have been defeated, and possibly moderate Democrats as well, so there would be nothing to restrain the Tea Party Republicans from doing whatever they want to cut taxes even further. Granted, a LOT of ifs in this scenario, but not allowing for a new tax cut bill as first act of new Congress is not implausible.

  • Anonymous

    mf2112:  Yes, we agree: we need to do better and get more of our people to turn out.  Unfortunately, I feel that too many of our fellow progressives think that a way to express their dissatisfaction or impatience with Obama is to not vote, or to complain in the Comments sections of liberal blog sites.  They think they’re “holding Obama’s feet to the fire.”  And if Democratic turnout is low, well, it’s all Obama’s fault.  I don’t think there’s anything wrong with voicing one’s opinion, but I prefer to look at what effect my words might have, because I think it’s all about results.  I think that the suggestibility of peers is a real factor in online “activism,” so, if anything, we need to stress GOTV above all.  I find nothing wrong with bemoaning the premise that progressives stayed home last November, if it does anything to motivate our peers the next time.

  • Anonymous

    But it is a FALSE premise.

  • Anonymous

    Because “the left” showed in relatively normal numbers for an off year election, AND the Tea Party Republicans showed up in higher than normal numbers for an off year election, AND the independents broke for the Republicans.

    Not mutually exclusive at all.

  • http://www.leosoderman.com Leo Soderman

    A reasonable response, but not what the surveys such as the Pew Research study I linked previously show. They showed depressed turnout compared to 2006 as well. In addition, what happened to the machine that turned out young voters so successfully in 2008? Why was that left behind? Reduced turnout because of a mid-term is one thing. But to have extraordinary turnout in 2008 followed by reduced turnout as compared to 2006 is a failure of GOTV efforts. 

    Not enough eligible D voters showed up to the polls. The turn out effort was insufficient. Rather than bash the President, more people should be working on how to eliminate the problem he faces trying to get things done – by voting.

  • Anonymous

    Okay, perhaps I should have said “some” Republicans would have been willing to allow the economy to tank, but I still think “most” would be more accurate.  And I guess part of Obama’s negotiating considerations had to involve helping Boehner find a way to appease his Tea Party contingent.  
    To point up the predicament you describe, we can look at John McCain first calling the Tea Partiers “bizarro” and “hobbits,” and then a few days later giving them credit for the agreement.  Bizarro indeed.

    http://www.politico.com/blogs/glennthrush/0711/McCain_teaparty_freshmen_foolish_on_balanced_budget.html
    http://thehill.com/blogs/blog-briefing-room/news/174657-sen-mccain-credits-the-tea-party-for-deficit-agreement

  • Anonymous

    Non-presidential election years ALWAYS have a lower overall turnout. Try again.

  • Anonymous

    Comparing 2008 results to 2010 is not fair and you know it. Non-presidential election years ALWAYS have a lower overall turnout than when people are voting for the president.

  • Dorothy Rissman

    I am thrilled to have discovered this site.  I will be reading on a regular basis and commenting when appropriate.  Dawn, thank you so much for reponding.  Hope to see more of you. dr

  • Anonymous

    I don’t see why we’re arguing this point.  Can we agree that progressives need to focus efforts on GOTV in 2012?

  • Anonymous

    Leo just proved that it isn’t a false premise.  And even if it were, of all the false premises floating around here, that’s not one that gets my panties in a knot.

  • Anonymous

    Sure, I totally agree with that. I just disagree that the best way to do it is to continue resurrecting a zombie lie and using it as a point to bash “the left” with “its all YOUR fault for sitting on your a$$” when that is NOT what actually happened.

  • Anonymous

    Leo did no such thing. His comparison of non-presidential election year turnout to presidential election year turnout was meaningless.

  • http://www.leosoderman.com Leo Soderman

    Ok – I’ll clarify – Turnout by D’s in 2010 was LESS than 2006. Republicans came out stronger in 2010. Democrats got less voters out than they did in the previous mid-term, and did not counter the Republican votes.

    I’m not comparing the presidential election to 2010. I’m comparing the effort. Obviously, turnout was higher due to the presidential race. And turnout will be lower. But given the extraordinary results of the GOTV effort on 2008, it is a failure of efforts for 2010 to have lower turnout that in 2006.

    Primary turnout *by Democrats* was the lowest in 80 years. That’s a significant failure of GOTV efforts. Only 8.3% of eligible voters turned out as Democrats. That’s lower than in 2006.

    In fact, the evidence is that Dem strategists believed that the first time voters that came out in 2008 would show up again in 2010. Less effort was put into getting these people to the polls. In the end, not only did they not show up, but their numbers dropped from 2006. 

    You can try hard as you can to make it sound like Democrats weren’t at fault here. But the reality is, their numbers were smaller compared to the previous mid-term, in some cases significantly smaller. 

    It’s not a lie. But acting like it is a lie will only result on more of the same come the next election.

  • Anonymous

    Okay.  Let’s say that progressives turned out in droves last year, but the tea baggers still prevailed at the polls.  What do we do now?

  • http://www.leosoderman.com Leo Soderman

    This is a key point that I think voters need to realize. Tea Party Congresscritters are having *far* too much influence compared to how many voters actually consider themselves Tea Party supporters. How is it that a small group of the Republican party is dictating how the entire Republican party, and by extension, the entire Congress operates? 

    If they are not voted out, it other candidates are not elected in – candidates that more accurately represent their full constituency – this will only get worse.

  • Anonymous

    “How is it that a small group of the Republican party is dictating how the entire Republican party, and by extension, the entire Congress operates?”  

    Good question!  I sure don’t know, other than unlimited Koch bros. funding and media complicity, perhaps. 
    But notice, as Thom Hartmann pointed out a few minutes ago, that the Tea Party operates WITHIN the Republican party, NOT as an outside third party–that would have gotten them nowhere and would have actually been a godsend for the Democrats, by splitting the Republican vote.  So if progressives united and got out the vote, instead of whining and threatening to go suicidal third party, perhaps we could influence the Democratic party as much as the Tea Party influences the Rs.  It could happen!

  • http://www.leosoderman.com Leo Soderman

    The Tea Party operating inside the Republican party isn’t the doing of the Tea Party. It’s a direct result of Republicans trying to co-opt the Tea Party momentum so they could win the midterms. Problem is, they didn’t realize they wouldn’t be able to control them once they got in.

    Republicans funded the Tea Party, sidled up next to them with a “nudge/nudge, wink wink”, and thought they could keep them in their pocket. How powerful could they be, right?

    Now, they’re finding them more of an anchor than a help.

    The one thing that the left hasn’t been able to fight is the massive influx of cash into the the right’s coffers. So the only choice available – short of finding lots of people with cash who are willing to use Citizens United to the left’s benefit – is getting more people to the polls to vote in progressive candidates.

  • lyris

    I have said this so many times before. The extreme left is as ignorant as the right and Leo Soderman pretty much proves it.

     

  • http://www.leosoderman.com Leo Soderman

    Head up the responses a bit and you’ll see my clarification. 2010 turnout was below 2006. One likely reason is that many strategists simply assumed the first-time voters that showed up in 2008 would also show up for the midterms.

    I am very aware that there is a difference between presidential and midterm elections. My point is that phenomenal *effort* was laid out in 2008, and that effort was not there in 2010, leading to a lower turnout than in 2006.

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  • Anonymous

    If Rush Limbaugh hates this deal, it can’t be all bad!

  • liberty

    No mention of the illegal, unconstitutional “super-committee/congress” that they foisted on the american people? What gives them the constitutional right to just create these consolidated power structures out of nowhere? Didn’t our forefathers set up our government with very little consolidated power for a reason? A very good reason? Do they even look at the constitution anymore?congress can’t even make AMENDMENTS anymore… and everyone is just relieved that they’re gonna get their gov’t cheese.

  • deeptruths

    The super-committee is an ‘out’ for both parties, plus, its an up or down vote – no amendments, no filibusters.  This is a compromise which allows Democrats who cringe at cuts to entitlements, and lets face it, they too have gotten out of hand, and allows Republicans to distance themselves from cuts to defense and, perhaps, the expiration on the Bush tax cuts.  

    To move the process along quickly, this committee should work the framework of the Simpson-Bowles Commission findings.  The administration should have planned on this framework from the beginning.  The WH, Reid, and Pelosi should have had a ‘budget’ somewhere, even if its locked up in a closet.  That omission lead to an opening for the Republicans.

    As I grieve for those 31 Navy Seals killed today, I’m hoping the fact that their bravery to keep on fighting even though the penultimate goal had been reached, will somehow emboldened the Democratic leaders to act in the same selfless vein. 

  • http://www.leosoderman.com Leo Soderman

    Thanks for the comment.

    Unfortunately it isn’t really unconstitutional to form the committee. Whether their decisions will hold water is an entirely different issue. Each house of Congress can make up their own rules. And since both houses voted on the legislation and passed it, they agreed to it.

    But, my understanding is that the committee is only empowered through the next set of cuts. Meaning, after 12/21/11, they are no longer empowered. That, of course, can be changed.

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  • Mlefcourt

    Fantastic article, Leo.  Deals are usually more complicated than they seem to be on the surface, and you pointed out something that many people missed.  You also presented the deal without the sarcasm, backbiting, and insulting incredulity that many writers employ.  

    Thank you.

  • Mlefcourt

    First of all, creating committees, even super-committees, is a Congressional right, and there are dozens of them right now; they’re just not usually created so publically.  Second, our forefathers did set up the government with little consolidated power… but that ended after the Civil War, so you’ve unfortunately been born about 130 years too late for that argument.  :(

  • http://www.leosoderman.com Leo Soderman

    Thank you for reading – and for the kind words. We’ve all had enough of the vitriol. We need solutions.

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  • http://twitter.com/mcclure111 mcc

    “To make it more difficult still, the deal makes it clear that those cuts must come in a 50/50 ratio between defense and non-defense spending, with Social Security, Medicaid, unemployment insurance, civilian and military retirement off the table. Medicare cuts would only come from the provider side, not the individual.”

    I am pretty sure this is not accurate. I believe you are confusing the “trigger” provision with the super committee thing. Can you give me a source for your claim that “those cuts” (i.e.: cuts Republicans must make under the deficit deal if they wish to extend the Bush tax cuts) must be 50/50 between defense and nondefense spending? You link a white house fact sheet upthread but even if that were an adequate source, the fact sheet quote refers to the “trigger”/sequester provision– in other words, it refers to the cuts that will happen if the super committee fails to reach $1.5 trillion. The cuts the super committee proposes have none of these “50/50″/”social security is protected” protections as I understand.

    I agree with much of your analysis but I feel like it is undercut when you make sloppy errors like this.

  • http://www.leosoderman.com Leo Soderman

    Not a sloppy error, sorry that you chose to describe it as such. Read the actual bill and you’ll find this:

    ‘‘(4) ALLOCATION TO FUNCTIONS.—On January 2, 2013, for fiscal year 2013, and in its sequestration preview report for fiscal years 2014 through 2021 pursuant to section 254(c), OMB shall allocate half of the total reduction calculated pursuant to paragraph (3) for that year to discretionary appropriations and direct spending accounts within function 050 (defense function) and half to accounts in all other functions (nondefense functions).

    Since an extension of the Bush Tax cuts results in an increase in spending, they must be offset. Per this section of the bill, ALL reductions is spending must come in the form of half defense and half in all else, through the budget year 2021, to be able to be scored properly.

    Now, this is indeed if they fail to meet the goals of the committee, which has to complete it’s recommendations in less than 4 months. In other words, as I have stated above, all the Democrats have to do to ensure this outcome is to do nothing, and the trigger kicks in. If they do reach a deal,

    As to why it it half defense otherwise, you have to go back to The Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987. The new bill modifies portions of that, but not 251(a)(3)(B), which says:

    Subject to the exemptions, exceptions, limitations, special rules, and definitions set forth in this section and in sections 255, 256, and 257, one-half of the aggregate required outlay reductions shall be made under accounts within major functional category 050 (in this part referred to as outlays under ‘defense programs’), and shall be made in accordance with the rules prescribed in subsection (d),and the other half of the aggregate required outlay reductions shall be made under other accounts of the Federal Government (in this part referred to as ‘non-defense programs’).

    Now, I am fully willing to admit that I have not researched all the possible amendments to that statute, but I am fairly certain that it has not been amended. If you have evidence otherwise, please let me know. If not, I must take exception to your calling my analysis “sloppy”

  • http://twitter.com/mcclure111 mcc

    Okay, thanks, that’s much clearer. I am using this as the text of the bill.

    Your reading still seems clearly incorrect. When I look up that section (4), it is a subsection of “‘SEC. 251A. ENFORCEMENT OF BUDGET GOAL”. The parent header for that section (4) clearly says:

    “‘Unless a joint committee bill achieving an amount greater than $1,200,000,000,000 in deficit reduction as provided in section 401(b)(3)(B)(i)(II) of the Budget Control Act of 2011 is enacted by January 15, 2012, the discretionary spending limits listed in section 251(c) shall be revised, and discretionary appropriations and direct spending shall be reduced, as follows:”

    In other words, the discretionary spending reduction applies *unless* the “super committee” enacts its bill by January 15. Therefore, the terms of this discretionary spending reduction do not apply *to* the bill passed by the “super committee”; if the “super committee” bill passes, then the discretionary spending caps of (4) do not apply at all.

    “Now, this is indeed if they fail to meet the goals of the committee, which has to complete it’s recommendations in less than 4 months. In other words, as I have stated above, all the Democrats have to do to ensure this outcome is to do nothing, and the trigger kicks in”

    Okay, but what you originally said was: “Now, take that in for a minute. If Republicans want to extend the tax cuts, they will need to cut an equal amount out of spending”. This is surely correct, but *only* applies if the super committee bill *does* pass– more properly it only applies if Republicans want to extend the tax cuts *as part of* the super committee bill. This is because the only enforcement mechanism to make Congress find savings to offset spending and tax cuts is the discretionary-spending-cap “trigger”– that is, Congress must bring the deficit down by $1.2 trillion from no-Bush-tax-cuts baseline by Jan. 15 2012 or else Sec. 251A does it for them. (If we simply wait until Jan. 16, 2012, then by that point EITHER the joint committee has passed its bill OR the trigger has triggered and discretionary spending caps are now in place; and Congress will be on that day free if they wish to do so to simply extend the Bush tax cuts, like they did last December, using deficit financing only.)

    So: If the super committee bill passes, these discretionary spending caps never go into effect and therefore terms of the discretionary spending limits, like the 50/50 defense/nondefense split, don’t apply. If the super committee bill does not pass, the discretionary spending caps go into effect and there is therefore no enforcement mechanism of any kind to ensure the Bush tax cuts are paid for at all, much less to ensure that *if* they are paid for 50% of the compensating cuts will come from defense spending. In neither case is there anything in place to make your original statement “If Republicans want to extend the tax cuts, they will need to cut an equal amount out of spending, with half of that coming from defense spending. Half.” accurate. What is the foundation of this claim?

    The 1985/1987 deficit control acts don’t seem relevant to this; from what I can tell they are simply the mechanism by which discretionary spending caps, when applicable, work.

  • http://www.leosoderman.com Leo Soderman

    The 1985/7 controls come into effect as the standards above any beyond, which is why 251A was modified with the additional language. In other words, those controls are already in place, setting spending caps and rules for sequester outside of the debt ceiling bill. If there is no bill, 215(a) will apply as the new rule and the cuts are automatic to the amount described in the bill. But any addition to spending would have to pass muster against 215(c), which describes the mechanism for reducing the deficit through spending caps and sequesters. This would be regardless of whether they pass a bill or not, because it is outside of the scope of the debt ceiling bill. So, even if they pass the requisite cuts, the baseline used by CBO already assumes the cuts will expire. If they want to add spending in the guise of tax cuts, they will have to offset that spending with additional cuts – to the tune of $4T – and under 215(c), that would have to come from defense/non-defense at a 50/50 ratio.

    The only real difference between the two sections is that one is the reinforcer if there isn’t a deal. The other is standard practice regardless of a deal.

    Again, I may not be aware of some other modification, but that’s how I read it.

  • http://twitter.com/mcclure111 mcc

    You are playing word games here. The caps are caps on *discretionary spending*. This is a specific part of the Federal budget. Tax cuts are not discretionary spending. They are tax cuts.

    If you do not believe me, the 1985 and 1987 budget control acts live at 2 USC Section 900. USC is explicit here:

    “(7) The term “discretionary appropriations” means budgetary resources (except to fund direct-spending programs) provided in appropriation Acts.”

    Both the original and new/”triggered” versions of these caps are formulated around the total dollar amount the caps allow to be appropriated in the federal government under the specific header of “discretionary spending”. They don’t place any caps on the 60% or so of the federal budget not classified as discretionary and they are agnostic to the amount of deficit or debt the united states has accumulated, which means changes to revenue (like taxes) don’t have bearing on the operation of these provisions (except to the extent that the debt ceiling bill consults deficit in deciding whether to lower the discretionary spending caps as part of the “trigger”– but again that stops mattering on Jan 16, 2012).

  • http://www.leosoderman.com Leo Soderman

    These aren’t word games. Per the CBO’s rules for scoring based on current law, the tax cuts are set to expire. This means that the current deal includes those cuts expiring and the additional revenue that generates is already in the mix. That has nothing whatsoever to do with what the new commission decides on. None.

    In other words, extending those cuts, per the CBO score, increases the deficit. Period. If Republicans – or anyone, for that matter – want to extend those cuts, they have to create offsetting spending cuts. This is outside of the framework of the current deal, and therefore falls back to the existing law. You’re right that the tax cuts do not fall under discretionary spending. They do , however fall under the category of spending, and the rules would apply to how that spending is offset.

    If you read section 903 (which is referenced in 900) you’ll find the same language I have previously quoted from the 85/87 bill.

    900 gives some basic definitions.
    901 addresses discretionary limits.
    902 addresses pay-as-you-go, which is where additional spending in the form of tax cuts would fall.
    903 defines how spending must be reduced. The reference to the 50/50 ratio is 903(c)

    Look them over. Hopefully, by looking at that breakdown, you’ll see that 900 is not a standalone, and that the sequestration limitation – outside of the debt ceiling deal – is in regards to all deficit categories, and that the section you cite is indeed only on discretionary spending, but is not the whole picture.

  • http://twitter.com/mcclure111 mcc

    Paragraph one; correct.

    “In other words, extending those cuts, per the CBO score, increases the deficit. Period.”. Correct.

    “If Republicans – or anyone, for that matter – want to extend those cuts, they have to create offsetting spending cuts. ”. False. Why would they?

    “If you read section 903 (which is referenced in 900) you’ll find the same language I have previously quoted from the 85/87 bill.” This section refers to maximum deficit targets for the years 1992, 1993, 1994 and 1995. I see no provision for setting a maximum deficit level for years after 1995 and, as far as I can tell, no maximum deficit level under that section 903 exists for years after 1995. Can you point me to where a maximum deficit target under this section would be set post-1995? I think you are looking at just some random cruft in the USC left over from a previous short-term budget compromise from the early 90s, which has not actually applied since 1996.

    Meanwhile, under both 903 (if it even still applied) and PAYGO (a thing which does still apply), the Congress can get around this sort of thing with the same one-sentence dodge they used in the Bush tax cut extension last year to get around PAYGO: “This Act is designated as an emergency requirement”. 903 (if it even still applied) has an explicit trap door in its deficit cap for “emergency” spending. (And from what I remember the 112th Congress’s version of PAYGO actually exempts tax decreases– period.)

    You seem to be just sort of cutting and pasting random sections of random laws at this point. You’ve yet to produce anything that seems at all relevant to your original dramatic claims (“if Republicans want to extend [the Bush tax] cuts, they will have to come up with $4T in spending cuts to offset the tax cuts. To make it more difficult still, the deal makes it clear that those cuts must come in a 50/50 ratio between defense and non-defense spending”– granted I’m agreeing the Republicans *do* have to offset tax cut extensions as long as they do so before January of 2012) and the thing you are claiming at this point in the comment tree seems pretty far away from that original claim. You seem to now be saying there is some kind of general principle in existing U.S. law where if legislators want to take an action which increases the deficit, they have to offset this elsewhere in the budget or automatic sequestration similar to what happens when year-to-year discretionary spending caps are hit will occur. You don’t really believe this do you? Have you not noticed that deficits do in fact keep expanding and no mechanism like this ever seems to come up in the recent discussions of explicitly deficit-increasing bills like TARP, the stimulus, or the Bush tax cut extension? If this were a regular feature of American legislation we probably wouldn’t have people calling for, for example, a balanced budget amendment, because we’d already have a BBA-like mechanism in place. At best what we have right now are periodic ad-hoc, temporary budget rules like PAYGO or that 1992-1995 thing you found, which are full of exceptions and can be dismissed by Congress as easily as they enacted them.

  • http://www.leosoderman.com Leo Soderman

    Well, it seems you have decided that you want to deliberately be difficult. I’ve done my research on this, and I’ll give you one more set of information to work with. Other than that, go back and read ALL the applicable legislation and code yourself, or I can send you a bill for my time to help educate you.

    From the CBO’s analysis of the 2009 PAYGO legislation (signed in 2010):

    “In addition, this term defines the treatment of legislative language contained in
    appropriations bills: if an appropriations bill contains changes to tax or mandatory law,
    those changes are considered discretionary in the current and budget years, since the
    Appropriations Committees can offset the costs or use the savings by adjusting funding
    levels for discretionary programs in the current and budget years. But any outyear effects
    of such tax or mandatory program language are considered PAYGO legislation.”

    In other words – per the CBO – changes to revenues due to tax cuts would be considered discretionary in their scoring and therefore increase the deficit and require offsetting. Have a disagreement with that? take it up with the CBO. Me? I’ll go with what they say.

    The 2010 PAYGO legislation brings back the terms of the original Balanced Budget and Emergency Deficit Control Act, with updates to reflect current circumstances. So, while you call it “outdated” the simple fact is that it is current law, and applies, with the amendments made. None of these amendments affected the make-up of reductions listed in the original legislation. Go through each of the legislative pieces, follow the references back each time, all the the way through the latest legislation.

    Why do deficits keep expanding? A number of reasons. A large one is that the interest we pay is not included in scoring. Off-budget effects and debt service are not counted in PAYGO scoring. So techinically, you can have a deficit neutral score and still have a net deficit because debt service and items such as SS are not counted.

    The idea behind the BBA is to take PAYGO a step farther, PAYGO is a reactionary act – it only triggers sequestration and reduction when expenditures exceed revenues. In other words, it allows money to be spent, and then goes back to try to fix it after the fact. BBA would try to stop the spending from being allowed in the first place. The best analogy is that PAYGO is like spending on a credit card. When the bill comes due, you have to figure out how to pay it, and that may mean reducing elsewhere. BBA is like a debit card – unless you have it now, you can’t spend it.

    Please, do your research and do it thoroughly. I have. The information is there if you just spend the time to look at it. I didn’t pull “random sections of random laws”. They are all interconnected through amendments and all present in *current* law. Our laws are fixes upon fixes upon fixes. If you want to look at the current laws regarding deficit control and budgeting, you will have to go back as far as 1974.

  • http://twitter.com/mcclure111 mcc

    Okay, so now we’re talking about PAYGO? The biggest impediment to me believing that you did any research at all here is that you keep changing the basis of your claims; if you had researched this *before* we started talking, I’d expect you’d have been able to explain the basis of your claims in your original blog post instead of producing a justification five posts into a quote tree. Though of course: You still haven’t produced any justification for these claims!

    For starters, to be clear, Statutory PAYGO is a different thing from the “902″ you describe above as “addressing pay-as-you-go”; “902″ is the old PAYGO, the one that expired in 2002 (it explains in its first sentence and also in its body that it only applies to legislation enacted before October 1, 2002). What you’re looking at with 2 U.S.C. 20 is the provisions of the 1985 budget control act, as amended by the 1987 act and other stuff that came later. Statutory PAYGO is separate; it does make use of processes and definitions taken from 2 U.S.C. 20, and parts of the act work as amendments to the 1985/1987, but mostly it’s its own little set of provisions (you can find the mechanism for new PAYGO entered as 2 U.S.C. 20A, starting with sec. 931). Meanwhile, although many parts of 2 U.S.C. 20 are still in effect and relevant today, others aren’t or have expired, like 902 (which again says in its text it only applies up to 2002) or again, 903 (which again says in its text it only applies up to the mid 90s). In other words, some of these provisions are outdated.

    Meanwhile, some of these provisions from 2 U.S.C. 20 are still in effect *but* don’t do what you claim they do. In particular, “901″ is basically unrelated to the current statutory PAYGO– since that “901″ concerns discretionary spending caps, and statutory PAYGO sets up its own separate mechanism from 901 for implementing sequestration. And no, statutory PAYGO does *not* redefine discretionary spending, certainly not for “901″‘s purposes; although the word “discretionary” does appear in the informal CBO summary you found there, you are taking the CBO out of context and if you look at the *actual* provision the CBO is summarizing in that paragraph (Sec. 3 (7), link above) the bill is describing only what causes a bill to fall under the PAYGO-scored legislation umbrella. (The word “discretionary” does not even appear in the statutory PAYGO bill, if you look). What the CBO is explaining in that quote is that mandatory spending is *treated like* discretionary spending insofar as PAYGO is concerned, according to the definitions that apply in chapter 20A. But discretionary spending still means “discretionary spending”, it’s still clearly defined in chapter 20 and statutory PAYGO doesn’t change the categories of budget provisions that 2 U.S.C. 20 [sec] 901 applies to.

    With that out of the way: Statutory PAYGO does not have the effect of requiring offsets for a Bush tax cut extension either. What 2010′s statutory PAYGO rules do is instruct the CBO, at the end of a year, to score the budget effects of all the previous year’s legislation, including both revenue and spending changes; if the sum total increases the deficit, then the CBO is to ratchet the deficit back down to compensate using the sequestration mechanism defined in chapter 20 (“900″). The limitation of PAYGO however is that it exempts broad categories of things. As you say, interest and some Social Security related spending is not included. However several other very large categories are not included either. Most importantly for these purposes, “emergency” legislation is excluded. What is “emergency” legislation? Whatever Congress says it is. If a provision of a piece of legislation is declared “emergency” in the legislation then the CBO “shall not include the budgetary effects of such a provision in its estimate of the budgetary effects of that PAYGO legislation” (so says the bill) at the end of the year, meaning the “emergency” provisions do not count against Congress’s deficit increases for that year and therefore do not trigger sequestration. The CBO report you linked summarizes this provision thus:

    “The statute allows Congress and the President to declare emergency exceptions to the PAYGO rules.  For such an emergency exception to be declared, Congress must, in statute, designate the relevant legislation or portions of it to be an emergency, and the President must separately do so as well; his signature on the statutory designation does not by itself constitute a presidential agreement that the cost is an emergency.  If both these requirements are met, the budgetary effects of the emergency legislation are displayed as an addendum to the PAYGO ledger and are not entered into the ledger itself.”

    This, again, is why we were able to pass the Bush tax cut extensions at the end of last year despite them being pure new deficit, and why no ill effects like “sequestration” occurred as a result. All they had to do (again, see link above) was say “This Act is designated as an emergency requirement pursuant to section 4(g) of the Statutory Pay-As-You-Go Act of 2010″ (remember, the Bush tax cut extension was passed *after* statutory paygo?) and bang, PAYGO is blind to the huge deficit increase this bill represented– no offset required. Obviously Congress and the President can extend the tax cuts without offsetting as easily in 2012 using this provision as they already did in 2010.

    Some of this may be in the weeds a bit, so to summarize: Discretionary spending means discretionary spending, and provisions which refer to “discretionary spending” do not apply to tax cuts. Meanwhile although the *intent* of statutory PAYGO is that deficit-increasing actions, including tax cuts, must be offset, statutory PAYGO doesn’t have this effect in *practice* because Congress and the President can easily opt out of following PAYGO for any particular piece of legislation they so choose.

    At this point I’d like to go back and repeat what you originally wrote: “So if Republicans want to extend those cuts, they will have to come up with $4T in spending cuts to offset the tax cuts. To make it more difficult still, the deal makes it clear that those cuts must come in a 50/50 ratio between defense and non-defense spending, with Social Security, Medicaid, unemployment insurance, civilian and military retirement off the table.”.

    *Even if* it were true Republicans were required to offset the cost of a Bush tax cut extension with cuts elsewhere, the second part would not be true. You haven’t even attempted to explain why “those cuts must come in a 50/50 ratio between defense and non-defense” or why the “off the table” items are off the table. These restrictions you claim aren’t true in general and they’re not true in the case of the “super committee” created by the debt ceiling bill. *If* sequestration occurs, it results in a large discretionary spending cut split 50/50 between defense and non-defense with the cuts being automatically distributed as described in ye olde “900″ and the categories you describe being protected. But the entire point of the “super committee” is to *prevent* sequestration– if the super committee passes a bill, the sequestration does not occur. And if a tax cut extension is done via a normal bill, outside the purview of the super committee, then Congress can (and, under any normal circumstances, would) prevent sequestration by either (1) offsetting the cost of the tax cuts, with nothing like this 50/50 requirement in place required when they craft this offset or (2) by using their authority under PAYGO to declare “emergency” and not offset at all.

    The reason this all bothers me is that this link is currently being distributed in several places on the internet as an explanation of what the debt ceiling bill “really” does. Someone looking for information on the debt ceiling bill– which is pretty opaque– would see your false statements about the 50/50 split and the protected categories and come away thinking they describe an actual restriction on the super committee, more confused than when they came in.

  • http://twitter.com/dylanhenrich Dylan Henrich

    This is an interesting analysis, but I feel it comes up short. Would it be possible for you to add citations from the various laws involved? It’s hard to verify these claims when you aren’t really backing them up.

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