08.06.2013 0

Paul Krugman against reality

KrugmanvsRealityBy Robert Romano

“[Y]ou can’t cut overall spending without cutting spending on particular programs.”

Actually, yes, you can, but more on that in a moment.

That was the New York Times’ Paul Krugman in his Aug. 4 column, “Republicans against reality,” mocking proposed cuts around the edges in the 2014 House-passed budget not taking shape in actual appropriations bills in the House.

Krugman analyzes the promises Republicans make on the campaign trail — particularly on fiscal policy — not necessarily corresponding with reality.

He accused Republicans of playing a “con game” on its base of voters. They promise cuts that cannot be delivered viaappropriations votes in Congress. He’s half-right, but a critical detail he leaves out renders his entire analysis moot.

Namely, Congress does not need to pass appropriations bills under current law in order to cut overall spending. Why? Sequestration.

The sequester cuts under the 2011 Budget Control Act are automatic. In other words, should Congress pass appropriations in excess of the budget caps under the law — and fail to carve out an exception to that law — across-the-board cuts to discretionary spending ensue to keep spending under the limit.

Krugman points to an aborted vote on transportation appropriations last week, when not enough Republicans showed up to even vote for the bill, which cuts $7.7 billion out of the previous $52 billion budget, almost a 15 percent reduction. “[A] significant number of representatives, while willing to vote for huge spending cuts as long as there weren’t any specifics, balked at the details. Don’t cut you, don’t cut me, cut that fellow behind the tree,” he wrote.

Similarly, House Appropriations Committee Chairman Hal Rogers (R-Ky.) used the occasion to trash the modest sequestration cuts that were a major reason why in 2012 overall spending decreased by $66 billion.

“With this action, the House has declined to proceed on the implementation of the very budget it adopted just three months ago,” Rogers said. “Thus I believe that the House has made its choice: sequestration — and its unrealistic and ill-conceived discretionary cuts — must be brought to an end.”

Of course, Rogers like Krugman leaves out the most important part — the delayed vote on the transportation bill is almost meaningless.

Just to be clear, passage of the FY 2014 budget, which is non-binding, has almost nothing to do with sequestration under the 2011 law, which is binding. For the same reason, failure to pass the transportation appropriations bill bears little on the debate over sequester, since anything in excess of sequester would have been automatically cut anyway.

In short, unless sequestration is repealed, it remains a meaningful check on appropriators like Chairman Rogers and spendaholics like Krugman. Perhaps they are still so hung over from the recent spending binge under the Bush and Obama Administrations that reality has not sunk in yet.

Robert Romano is the Senior Editor of Americans for Limited Government.

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