Budget Deal is Smoke and Mirrors

To learn the truth about the cave-in, Ryan-Murray budget deal I go to Cato’s Chris Edwards. As he points out, the analysis by Republicans on the Senate Budget Committee (SBC) raises spending by $63 billion in ’14 and ’15. But the so called $85 billion in “savings” is a mix of $34 billion in revenue increases and $47 billion in spending reductions that don’t kick in until 2022 and 2023. Like that’s ever going happening. As Edwards puts it:

Here’s the most astounding thing: $47 billion of the $85 billion in claimed savings are scored to occur in 2022 and 2023. So the package hikes spending right now, but promises to deliver more than half of the offsetting savings a decade from now.

Most of the 2022 and 2023 savings ($28 billion) are supposed to come from putting caps on entitlement spending in those years. Senate Budget Committee Chairman Jeff Sessions says these savings are of “dubious validity,” but he is being polite. After all, we now know that Republicans won’t stick with caps when push comes to shove, so I would call those future caps “worthless.”

If we count the 2022 and 2023 entitlement savings as being worth zero, we are left with a budget package that hikes spending $63 billion, cuts other spending just $23 billion, and raises revenues $34 billion. With fiscal results like that, I’d take gridlock over bipartisan agreement any day.

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E.J. Smith - Your Survival Guy

Preparing your investments and family for when disaster strikes.

E.J. Smith is the Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention. E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com. Sign up here to receive all the best content from Richardcyoung.com each week.