The CBO has a revision of their earlier analysis of the 2011 appropriations bill. The first analysis, from before the bill passed Congress, showed that outlays in 2011 would be just a few hundred million dollars less than the baseline carried over from 2010. Now, CBO projects a $3 billion increase in outlays as a result of the appropriations deal.
Total discretionary outlays in 2011 will be $3.2 billion higher as a result of the legislation, CBO estimates–an increase of $7.5 billion for defense programs, partially offset by a net reduction of $4.4 billion in other spending.
Outlays include spending that was authorized and appropriated long ago. The truth here is that a lot of the budget cuts in the 2011 fiscal year went to earmarked transportation projects, the kind of spending that has a long time horizon and doesn’t necessarily shake out in the near term. In addition, some of the defense spending was accelerated, meaning that it will hit this budget year rather than later. But that’s pretty much zero-sum; eventually, that will even out.
Importantly, that $3 billion increase is off a March baseline. By March, two other short-term budget agreements which had cut $10 billion in funding were already enacted. So keep that in mind.
People are crowing about this, but they aren’t seeing a few things. First of all, budgetary authority – the limits on spending – did reduce by about $23 billion. That’s less than the $39 billion claimed at the time, but it’s still a fairly robust amount. There are also cuts to mandatory programs of $11 billion. CBO says “that reduction will have little effect on mandatory outlays over the 2012-2021 period,” and it’s true that $11 billion in cuts over ten years of mandatory spending is a trifle. That’s not the same as saying it doesn’t exist.
Second, the important part of this is the new baseline. Budgets typically use that baseline as a starting point for the next budget. If your baseline, which is based off of budgetary authority and not outlays, is lower, that will have a ripple effect on spending basically forever. The CBO has not created its new baseline estimates; those won’t be available until August. So we don’t know precisely how much the 2011 budget cuts will save over the long-term yet. However, CBO estimates that budgetary authority would be reduced by $183 billion over ten years because of the 2011 appropriations, and outlays reduced by $122 billion. Again, the crowers can crow, but that’s real money, especially when you consider that budgets should expand at the rate of inflation or to keep up with population growth.
So I know people want to call Republicans bunglers, who ended up increasing spending when they wanted to cut it, but that’s not totally accurate. We were largely spared massive budget cuts in the near term, which is a good thing, but not over time. Furthermore, to the extent that there were increases, they came in military spending. And I think Republicans knew exactly what they were doing there.
UPDATE: David Rogers, whose acumen on this issue is impeccable, writes that the poor and vulnerable are indeed feeling the pain of these budget cuts. They aren’t a laugh line. It represents the Republicans pushing spending upward away from the poor and into the hands of the rich. We all knew they weren’t concerned about the budget. This is their project.