The following article by Glenn Kessler was posted on the Washington Post website February 16, 2018:
White House officials are claiming big budget savings for a plan that sends the deficit soaring. How does that add up? It doesn’t. (Meg Kelly/The Washington Post)
“The budget represents $3 trillion in savings over the course of the 10 years. It’s the second-largest proposed reduction in spending ever, second only to last year’s budget.”
— White House budget director Mick Mulvaney, briefing reporters on the 2019 budget, Feb. 12, 2018
“I know the president certainly would like to reduce the deficit and it’s one of the reasons that his budget — this budget reduced the deficit by $3 trillion, which was one of the largest in history.”
— White House press secretary Sarah Huckabee Sanders, in an interview on CNN, Feb. 13
The Fact Checker did a double take when we saw these statements. After all, the New York Times headlined its article on the 2019 budget: “White House Proposes $4.4 Trillion Budget That Adds $7 Trillion to Deficits.” So how does a budget that adds $7 trillion to the deficit actually reduce the deficit by $3 trillion?
Magic budget math!
We originally intended to ignore the budget, which was largely made irrelevant by the congressional budget deal reached a week earlier. But this kind of spin simply cannot be ignored — and if we were confused, we imagine our readers were confused as well.
The Facts
There is a standard table in every federal budget labeled S-2. This is where an administration tallies the 10-year deficit impact of its various proposals on the budget, measured against a baseline of spending and revenue if nothing had been changed. In other words, it is a wish list, with few items ever enacted.
Item No. 1 this year: Repeal and replace Obamacare, resulting in savings of $675 billion over 10 years. We all know how well that effort fared in 2017. It has no chance in an election year.
The S-2 table in the 2019 budget actually tallies up to $3.631 trillion worth of spending cuts. But if you remove the interest on debt saved from these proposals, it’s really $3.312 trillion. White House officials said they reduced it further, to $3 trillion, in public statements to reflect the spending deal reached with Congress the week before.
In other words, already the wish list is out of date.
The budget, for instance, calls for slashing $1.5 trillion over 10 years from nondefense discretionary spending, starting with an $84 billion cut in the next two years, through a “twopenny plan” that would cut such spending two percentage points a year.
But Congress decided to bust through the sequester caps and add $128 billion to domestic programs for the next two years. So the budget is $212 billion behind on that item. There’s no way President Trump will ever catch up.
Moreover, some items on the list, such as phasing down funding for overseas contingency operations and disaster spending, probably were going to happen anyway. Just those two items add up to $808 billion over 10 years, or 25 percent of the claimed savings.
White House officials defended the statement. “This budget represents the second largest reduction in deficits from the baseline ever — the largest being President Trump’s budget last year,” said John Czwartacki, spokesman for the Office of Management and Budget.
This proves our point. Trump had a wish list in 2018, with a big number, and virtually none of it happened. In the previous year, there was a similar list that included such as ideas as repeal and replace Obamacare ($250 billion in savings) and the twopenny plan ($1.4 trillion). A big item on the 2018 list — reform Medicaid and the Children’s Health Insurance program ($616 billion) — does not even make a repeat appearance.
As regular readers know, we often say that raw numbers are misleading. When measured against the predicted size of the gross domestic product, this year’s proposals result in less claimed deficit reduction than in 2018, 2017 and 2013.
In fact, in going through the S-2 tables of 10 years of budgets, we found that Obama in 2017 offered proposals that were estimated to produce bigger deficit savings in raw dollars — $3.640 trillion — than Trump is claiming this year. Obama exceeded Trump’s number by $9 billion — yes, a rounding error — but it calls into question the statement we originally got from OMB.
An OMB official said Czwartacki misspoke and noted that Mulvaney had referred to “the second largest proposed reduction in spending ever,” not overall deficit reduction. (Obama’s proposals included tax increases.)
Not to get too granular, but since officials are already conceding that the savings in the 2019 budget are really $3 trillion, not $3.631 trillion, it’s actually smaller than the $3.563 trillion claimed in the 2018 budget. So Mulvaney continues to be wrong.
The Pinocchio Test
This charade reminds us of the story of the man who claimed he had sold a dog for $50,000. How did he do that? He traded the dog for two $25,000 cats.
In other words, the numbers add up but they are meaningless.
White House officials are congratulating themselves for concocting a wish list of spending cuts that will never be enacted. The numbers look big over a 10-year horizon, but already they are out of date. Meanwhile, the fiscal position of the United States slipped in the past year because of a bonanza of tax cuts and spending increases. Moreover, even if one accepted the figures, it’s not the largest such estimate as officials claim.
We wavered over whether these statements were worthy of Three or Four Pinocchios. These are numbers in a government document, after all. But what tipped us to Four Pinocchios was that these claims were made in service of a budget plan that allows for soaring deficits, even after adopting economic growth far outside the economic mainstream. That’s more than spin — it’s spin that’s whistling past the graveyard.
Four Pinocchios
View the post here.