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Wednesday, December 11, 2013

A Least Bad Budget Deal -- Review & Outlook, The Wall Street Journal

More spending now for some genuine, if modest, reforms. 

The best that can be said about the House-Senate budget deal announced late Tuesday is that it includes no tax increases, no new incentives for not working, and some modest entitlement reforms. Oh, and it will avoid another shutdown fiasco, assuming enough Republicans refuse to attempt suicide a second time.

The worst part of the two-year deal is that it breaks the 2011 Budget Control Act's discretionary spending caps for fiscal years 2014 and 2015. The deal breaks the caps by some $63 billion over the two years and then re-establishes the caps starting in 2016 where they are in current law at $1.016 trillion. Half of the increase will go to defense and half to the domestic accounts prized by Democrats.


Breaking the caps is a victory for Senate Democrats and House Republican Appropriators like Oklahoma's Tom Cole, who will get more money to spend and will dodge another continuing resolution that doesn't allow them to set spending priorities. It would be nice to think they'll spend the money on such useful purposes as cancer or Alzheimer's research at the National Institutes of Health. But they will also get to dole out pork. The deal means overall federal spending will not decline in 2014 as it has the last two years.

 To offset the extra spending without adding to the deficit over 10 years, the deal includes about an $85 billion grab bag of new fees, some amusingly revealing program changes, and modest entitlement reforms. The fees add up to about $26 billion over 10 years, and they are all charges for government services that were proposed in chief GOP negotiator Paul Ryan's previous House budget resolutions.
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