Snow’s Garbage on the Deficit
Snow: Spending cuts to reduce deficit
WASHINGTON (Reuters) – The White House aims to shrink the U.S. budget deficit through spending restraint and strong government revenues but will oppose letting tax breaks expire, Treasury Secretary John Snow said Tuesday.
“You’ll see the administration press awfully hard to contain spending,” Snow told reporters at a briefing.
The administration’s budget proposal for the coming year will reflect its deficit-cutting commitment through a slowdown in spending increases and outright cuts in some areas, Snow said, though he did not give details.
To any journalists reporting on this garbage from the Treasury Secretary: Please Pay Attention. Secretary Snow is spouting nonsense when he says that the deficit can be cut through “spending restraint”.
The following chart illustrates. It shows the on-budget deficit as forecast by the CBO, calculated using the White House’s own goal for discretionary spending between 2006 and 2010, which is for non-defense and non-homeland security (NDNHS) discretionary spending to be constant in nominal terms (i.e. to fall by perhaps 15% in real terms). The other scenarios show the effects of even more draconian cuts in NDNHS discretionary spending on the deficit (the dark blue line), and a couple of other options.
Source: CBO, and my calculations assuming that there is no Social Security privatization.
It is impossible to make a substantial dent in the deficit through spending restraint. And whenever anyone from the White House says that that is their plan, it is the responsibility of journalists to report this fact alongside the budget nonsense emanating from the White House.
Kash