CBO: Obama-Boehner Adds $3.3 Billion to Deficit Rather than Saving $38 Billion

The Congressional Budget Office has come up with slightly different calculations of the savings created by the Obama-Boehner budget compromise.

The Congressional Budget Office has come up with slightly different calculations of the savings created by the Obama-Boehner budget compromise.

WaPo (“CBO: Budget deal cuts this fiscal year’s deficit by just $352 million, not $38 billion touted“):

A new budget estimate released Wednesday shows that the spending bill negotiated between President Barack Obama and House Speaker John Boehner would produce less than 1 percent of the $38 billion in promised savings by the end of this budget year.

The Congressional Budget Office estimate shows that compared with current spending rates the spending bill due for a House vote Thursday would cut federal outlays from non-war accounts by just $352 million through Sept. 30. About $8 billion in immediate cuts to domestic programs and foreign aid are offset by nearly equal increases in defense spending.

When war funding is factored in the legislation would actually increase total federal outlays by $3.3 billion relative to current levels.

To a fair degree, the lack of immediate budget-cutting punch is because the budget year is more than half over and that cuts in new spending authority typically are slow to register on deficit tallies. And Republicans promise that when fully implemented and repeated year after year, the cuts in the measure would reduce the deficit by $315 billion over the coming decade.

Still, the analysis is an early lesson about Washington budgeting for junior lawmakers elected last year on promises to swiftly attack the deficit.

At issue is a concept in budgeting that is often difficult to grasp. Appropriations bills like the pending measure give agencies the authority to spend taxpayers’ money. But such authority typically takes months or years to actually leave the federal Treasury, so cuts made in the middle of the budget year often have little immediate impact.

Amusingly, the WaPo headline is wrong, too. The notion that putting something “off-budget” means that it doesn’t contribute to the deficit is, of course, absurd.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. steveegg says:

    I’ve got it as a $18 billion discretionary spending increase versus FY2010 ($1,365 billion versus $1,347 billion last year).

  2. JKB says:

    Funny, the MSM were careful to hide the fact that spending, whether increased or decreased, takes months to make it through they system when they were rallying behind Obama’s stimulus.

    Fact is, this late in the game, a huge spending cut would effectively shutdown the government until September 1. If they were authorized to make commitments, the bureaucrats have, if not they don’t have time to get the money. So the real plan should have been to tie off the bleeders and then leave no money for carrry-over spending into next year.

  3. john personna says:

    You should make this a top story.

    FWIW, while I expected some shenanigans, this exceeds anything I could possibly imagine. $38B in cuts rationalize down to $352M. Incredible.

    One almost wonders if the pols were so dumb or lazy that THEY didn’t know it was that bad.

  4. JKB says:

    AJStrata has written well on the realities of budget implementation. Both on the long lead time for the Stimulus to make it out the door and now this “crisis of the day.”

    Fact is, any cuts or appropriations only have 6 months to make through the system. Even a well-oiled OMB, which hasn’t been in evidence of late, would take weeks to get the appropriations to the Departments, who would take weeks to get the appropriations to the agencies, who would take weeks to get the appropriations to the offices. Until then things would run on autopilot based on the preceding CR guidance.

    And it all goes away when the CR expires. The trick is to keep these cuts rolling through the rest of this FY and makes sure they are in FY2012’s appropriations. And into the following fiscal years. Along with any additional cuts.

    (correction to my earlier comment. Should be “October 1” vice “September 1”)