As Predicted, 11th Hour Backroom Deals Emerge

Congress has an omnibus (basically the same one they had last week). They’re close to extending the payroll tax cut. “Doomsday” has been averted yet again. And, as has become the norm in Washington, we won’t fully know what’s in the bills until they’re passed.

Last night, Congress agreed to an omnibus that would fund the government until the end of the fiscal year, next September 30th. The bill, which costs nearly $1 trillion, will be voted on today, so the likelihood of knowing everything that’s included is slim. When added to the three appropriations bills already passed this year, the discretionary spending level for FY2012 adds up to $1.0429 trillion dollars.

Discretionary spending would be $31.6 billion above the House-passed Ryan budget.

But it’s actually even higher than that, because Congress used yet another budget gimmick to make it appear as though they spent less – by not counting disaster spending in the total. When you add on more than $8 billion in disaster funding- which is unlikely to be offset – and spending is actually $1 billion more than 2011.

That’s right, despite all the talk of this being some kind of “era of austerity,” and millions of dollars spent by special interest groups claiming that there were “draconian” cuts this year, spending is still increasing. There is supposed to be a “paid-for” for the disaster funding, but as The Heritage Foundation’s Patrick Louis Knudsen writes:

“The third part of the package (H. Con. Res. 94) calls for a 1.83 percent across-the-board reduction in all the spending bills except Defense and Military Construction/Veterans Affairs. The measure is intended to pay for the disaster-funding package, but by breaking it up into a separate bill, it will surely die in the Senate—meaning the offsets will never occur, while the spending will.”

Typical Washington.

The Hill is also reporting that Congress is close to a deal on extending the payroll tax cut. They’re supposedly only $90 billion from a deal. Leaders from both parties have agreed to use $100 billion to $120 billion from spending cuts the so-called “super committee” found this fall, but they can’t figure out how to come up with the other $90 billion needed to “pay for” a tax cut.

The leaders can’t decide whether the remaining $90 billion should come from counting “savings” from the wars, by closing tax loopholes or by more spending cuts. Democrats, naturally, would prefer to hike taxes or use the gimmick of “war savings” to find the other $90 billion, while Republicans seem to prefer spending cuts.

Should they not agree to anything by the end of the year, don’t worry! You’ll be able to keep that $83 a month that you may not have even noticed. As a fall back plan, Congress could pass a temporary, 2-month extension of the payroll tax cut. This would “cost” $40 billion and would be offset by the super committees spending cuts.

We’ve said it before, there is no such thing as a spending cut in Congress. When they find spending to cut, they just use those savings to spend somewhere else.. It seems nothing has actually changed.

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