“NO” on Ryan-Murray Budget Deal

This week, the House will vote on the Bipartisan Budget Act of 2013 (H.J. Res. 59), a budget agreement crafted by Rep. Paul Ryan (R-WI)Heritage ActionScorecardRep. Paul Ryan62%House Republican AverageSee Full Scorecard62% and Sen. Patty Murray (D-WA)Heritage ActionScorecardSen. Patty Murray0%Senate Democrat AverageSee Full Scorecard0%.  The agreement would lift the discretionary spending caps to $1.012 trillion in 2014 and $1.014 trillion in 2015 and increase revenues through an assortment of tax increases (which are labeled fees) in exchange for promises of future spending reductions.

The deal represents an immediate increase in federal spending — $63 billion over the next two years.   This is a significant achievement for President Obama, who believes that government spending is a panacea to America’s economic woes.  As budget negotiations began, the Heritage Foundation warned:

Lawmakers are already wrangling over how to undo the BCA’s modest spending cuts…Except for substantive structural reforms to curb the growth in spending from Social Security, Medicare, or Medicaid, conferees should stay away from trading the sure savings in the BCA in exchange for uncertain savings in the future.

Although the deal purportedly does not raise taxes, it does increase user fees.  These fees are not going up to cover the cost of services; instead, they are being used to offset the aforementioned spending increases. Heritage explains that is a gimmick:

Raising these fees to cover the cost of providing services is one thing. Increasing them to pay for more spending is just another Washington gimmick. Using gimmicks like this one to get around necessary spending reductions is a destructive habit that has helped fuel the now $17.2 trillion national debt.

Additionally, the deal relies upon promises of future cuts to offset the immediate spending increases.  Amazingly, negotiators moved roughly a third of the deficit reduction ($28 billion in cuts) to 2022.  Heritage cautioned that savings in the out years are not nearly as valuable as savings that are already achieved:

Since no Congress can bind the actions of a future Congress, future spending reductions can be erased and are therefore less valuable than savings already in law and taking effect. There is also a time value to money. Just as no lender would give out a dollar today in exchange for just one dollar in 10 years, budget savings today are much more valuable than potential savings in later years. 

Finally, the deal does little to provide a real and sustained fix for President Obama’s mismanagement of defense.

By increasing spending, increasing fees and offering up another round of promises waiting to be broken, the deal represents a step backwards.

Heritage Action opposes the H.J. Res. 59 and will include it on our legislative scorecard.

Related:

Heritage Action Scorecard
Heritage: Principles for the Budget Conference
USA Today: Budget deal a step backwards
Heritage: 3 Things You Need to Know about the Congressional Budget Deal
Heritage Action: A Budget Deal that Breaks BCA Caps is the Wrong Approach
Heritage: Raising Fees: Just Another Washington Gimmick