Budget charts created by the House Progressive Caucus are being touted as proof that deficit reduction has been heavy on cuts and light on revenue. In fact, they prove that the President has gotten a better deal than the one he presented.
Over at the Maddow Blog, Steve Benen says the GOP has “short-term memory loss” with regard to deficit reduction. Here are the critical facts he says need to be recalled:
In 2011, Democrats and Republicans agreed to between $1.2 trillion and $1.5 trillion in spending cuts, depending on how one tallies the numbers. The cuts included no new revenue.
In 2012, Democrats and Republicans agreed to a deal that raised revenue by about $650 billion. The new revenue included no new cuts.
Benen then directs readers to some “very helpful charts” published by Greg Sargent at the Washington Post last week:
The charts were prepared by the Progressive Caucus in the House. Notice that Benen says the cuts were either $1.2 trillion or $1.5 trillion while the chart above claims $1.7 trillion. What’s the real number?
At the time the deal was made in July 2011, CBO concluded “The caps on discretionary appropriations will decrease spending(including debt-service costs) by an estimated $0.9 trillion…” Rather than start with the debt ceiling negotiations, progressives argue that the 2011 budget was part of the Grand Bargain. Not only that they claim continuing resolutions put in place “between September 30 and December 21, 2010” should also count toward deficit reduction goals. This adds $585 billion in additional cuts to the $900 billion from the actual debt limit deal. That’s how you get to $1.5 trillion in cuts.
If you compare that figure to the $617 billion in new revenues agreed to in December you get a 70-30 split as shown on the chart above. But even if the numbers are arguably correct what Benen and Sargent claim they demonstrate is not. Sargent writes “Even if the parties reach a deal in the third round of deficit reductionto avert the sequester with something approaching an equivalent sum ofspending cuts and new revenues, the overall deficit reduction balance would still be heavily lopsided towards Republicans.”[Emphasis his]
Lopsided? That depends on what you mean by balance. No one, including the President, ever said the ratio of cuts to revenues would be 1:1. i.e. a pie chart split evenly down the middle. In fact, that is not what a balanced approach looks like according to the President. In his deficit reduction framework, published on the White House website in April 2011, the President said a balanced approach was “three dollars of spending cuts and interest savings for every one dollar from tax reform that contributes to deficit reduction” [Emphasis in original]. In other words, the President’s was asking for this:
If you compare this to the chart above above you’ll see we’re close but the President and his party have actually gotten a slightly higher percentage of taxes than they requested (30% vs. 25%). And that’s even if you including all the cuts that were made 8-10 months before the debt limit deal was reached.
Current negotiations are attempting to find an additional $1.5 trillion in deficit reduction necessary to avoid a future downgrade of US debt. Progressives are using the 70-30 chart to claim the GOP needs to offer plenty of new revenues to redress the apparent imbalance. But this is based on a false premise. Balance never meant a dollar of taxes for every dollar of cuts.
It is the President who needs to give a bit extra–on top of a 3:1 split–to achieve a so-called balanced approach outlined in his own deficit reduction framework.