Democrats: It's in their bloodline to be dishonest

Democrats Use Budget Gimmicks To Hide Spending

By JOHN MERLINE, INVESTOR'S BUSINESS DAILY

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In their first budget in four years, Senate Democrats claim to have crafted a plan that cuts federal spending a total of $975 billion over the next decade.

"This budget cuts spending responsibly," said Senate Budget Chairman Patty Murray, D-Wash., this week. "There are no sacred cows; we put everything we can on the table."

But an IBD review of the budget data shows that the Senate vastly overstates the size of its spending cuts. In fact, it could be that the Senate would, if enacted, increase federal spending by hundreds of billions of dollars.

The $975 billion figure, for example, doesn't count the $100 billion in new stimulus Senate Democrats are pushing. That alone cancels out more than 10% of the advertised spending cuts.

Changing The Baseline

Senate Democrats also appear to use a gimmick known as "baseline budgeting" to make their proposed spending look lower than current budget policies.

Put simply, the Senate budget projects that the government will spend more to finance current policies over the next decade than does either the Congressional Budget Office or the House Budget Committee.

But Senate Democrats rely on dubious assumptions. They assume that the sequester spending cuts don't happen, even though they are required by law. That boosts the baseline by $995 billion over 10 years. They also keep a refundable tax credit in place that's set to expire, adding another $164 billion.

Because of these and other assumptions, Senate Democrats claim 2014-2023 federal spending under "current policies" will be $47.2 trillion. As a result, their $46.4 trillion plan would shave hundreds of billions of dollars.

But the House Budget Committee projects federal spending under current policies will be far lower -- coming in at $46.1 trillion. By that measure, the Senate plan boosts outlays $300 billion.

Republicans on the Senate Budget Committee say that the extra spending is $645 billion.

Vowing Action, In 2016

The Senate plan could also make it harder to get long-term spending under control. The proposal would sharply boost spending from 2013 to 2015, largely via the new $100 billion stimulus plan, and then promise to get tough on cuts.

But budget experts generally agree that raising spending today will only make it harder to cut it later. House Budget Committee Chairman Paul Ryan's budget cuts spending in the first two years, then lets it gradually increase in the years following.

The Senate plan also leaves entitlements largely untouched, with spending on Social Security, Medicare, Medicaid and welfare programs virtually identical to those projected by the CBO.

But in its last budget report, the CBO warned that these programs are on an unsustainable path.

"The aging of the population, the rising costs of health care, and the scheduled expansion in federal subsidies for health insurance will substantially boost federal spending on Social Security and the government's major health care programs," CBO noted. "Unless the laws governing those programs are changed...debt will rise sharply relative to GDP after 2023."

The bottom line is that despite nearly $1 trillion in new taxes, the Senate plan never comes close to producing a balanced budget, with red ink reaching a yearly low of $407 billion before climbing to $602 billion in 2022.