More on deficit reduction

Following up on Joseph's previous post, the Center on Budget and Policy Priorities has (via DeLong) an analysis of the Ryan plan that argues he has greatly exaggerated the savings that would be produced by his recommendations. The part about defense spending was particularly instructive:

About $1.3 trillion of the claimed $5.8 trillion reduction in spending, however, comes simply from taking credit for spending less in future years for the wars in Iraq and Afghanistan, as a result of the already-planned drawdown in the number of troops fighting in those countries. While this accurately reflects the difference between spending for the wars in Ryan’s plan and spending for the wars projected in CBO’s baseline, it does not represent savings or deficit reduction resulting from any change in policy proposed by Ryan....

CBO follows the baseline rules established in the Budget Enforcement Act of 1990 (as subsequently modified). For taxes and mandatory spending, the baseline projections generally assume that there will be no changes in current laws governing taxes and mandatory programs. But for discretionary spending... assuming current law does not make sense.... [B]aseline rules require CBO to assume that for each account and activity, Congress will provide the same amount of funding in each year the baseline projections cover as it provided in the most recently enacted appropriation bills (adjusted for inflation). This generally serves as an adequate proxy.... There is, however, one large anomaly — funding for the wars in Iraq and Afghanistan — that causes the current baseline projections to vary significantly from what it will cost to continue current policies. Following the baseline rules, CBO projects that in every year from 2012 through 2021, appropriations for the wars will remain at the current annual funding level.... Yet a drawdown in troops is already well underway in Iraq and is planned for Afghanistan.... Chairman Ryan’s budget merely plugs in the CBO’s estimate of the war costs under the President’s proposal, without changing them.

This difference of about $1.05 trillion between the war costs in the Ryan budget and those in the CBO baseline thus does not represent new savings that result from Ryan’s budget proposals. Yet Ryan counts this $1.05 trillion, plus the $250 billion reduction in interest costs that such a $1.05 trillion spending reduction would produce, as $1.3 trillion in spending cuts and deficit reduction....

Ryan himself said in a February interview that savings in the Obama budget that come from the troop drawdown should not be considered real savings or deficit reduction. Ryan commented that the Obama budget showed savings of $1.1 trillion because the costs under the proposed withdrawal were compared to a baseline that assumed “they’re going to be in Afghanistan and Iraq at current levels for ten years,” and called these “phantom savings.” Ryan was correct to term these “phantom savings.” And if the phantom savings are not counted as real savings, the amount of spending cuts that Ryan’s proposals produce is $1.3 trillion less than Ryan claims...

If we're going to get anywhere with this debate... Hell, if we're going to get anywhere with any of the debates that are necessary for a functioning democracy, we have to hold to certain standards like consistency about classifications, appropriate weighting of authority such as the CBO and acceptance of shared axioms like the properties of real numbers (I so wish I were being sarcastic about that last one).

To be blunt as a ball-peen hammer, Paul Ryan and a large segment of others on the right have decided to trade intellectual standards for some short-term policy gains. This is a horrible mistake, not because their policies are all bad (I'm not prepared to make a blanket condemnation), but because no policy gain is worth that cost.