How many times have you heard that “all we need to do is elect a Republican majority, then things will change?” Well, if you believe that then I have some oceanfront property in Arizona that you might want to buy. Don’t believe all the hype about Paul Ryan’s budget:
Chairman Paul Ryan’s budget released today “cuts spending by $5.1 trillion over the next ten years,” the document claims. Similarly, the headline from the Washington Post says that Ryan’s budget “would slash $5 trillion over next decade.”
Yet looking at the details of Ryan’s proposal, the federal government will spend $1.5 trillion more in 2024 than it is expected to spend in 2014.
How can spending both be “slashed” and increased by $1.5 trillion? It’s because of the bizarre way that Washington discusses spending, which is known as baseline budgeting.
In Washington, all spending proposals are compared to the CBO’s baseline projections. The CBO releases these projections a couple times a year, which are based on their estimates of current federal law. Every proposal is then compared to this baseline. Inside-Washington discussions of spending cuts or increases are relative to CBO’s figures.
Chairman Ryan’s budget would spend $42.6 trillion over the next ten years. Opponents will say that Ryan’s budget slashes federal spending, while supporters will say that it includes large budgetary savings. The reality is that Ryan’s budget would increase spending at an annual average rate of 3.5 percent, or from $3.54 trillion in 2014 to $5.0 trillion in 2024. Only in Washington would that be considered substantial restraint, let alone slashing.