Budgetary sleight of hand on sequester spending limits

at 06:00 AM ET, 06/04/2013


(Pete Marovich/Bloomberg)

“House appropriators have moved us forward by agreeing to adhere to the limit of $966 billion for non-entitlement spending in 2014. This is the maximum amount the law would allow without having to make any across-the-board cuts – in other words, no sequester. We should not put in the law for the next nine years to break spending limits that we already accepted. We could, on the other hand, agree on a budget that respects those limits – but hits them in a more rational way than sequestration.”

— Sen. Roy Blunt (R-Mo.), in an opinion article titled “Seeking a smarter approach to the budget,” May 30, 2013

Often, the most difficult and complex subjects — such as the federal budget — are the most likely to be factually manipulated by politicians. You need to carefully parse the words to understand how a seemingly innocuous sentence can leave the wrong impression.

Let’s take a look at what Blunt is saying here. We will try not to get too far down in the budget weeds.

 

The Facts

The 2011 Budget Control Act was a deal reached between the White House and congressional Republicans to avert a default on the national debt. It set up a process of automatic across-the-board cuts in security and nonsecurity spending known as sequestration — designed to be so onerous that both sides would reach a deal to prevent the cuts from taking place. But that did not happen, so the cuts went into effect this year.

Blunt is a member of the Senate Appropriations Committee. His key point in his article is that Congress must “live with the spending limits we passed two years,” in contrast to the budget advocated by Senate Democrats that would change the law to replace sequestration. Instead, he points approvingly to the House GOP budget, which he says adheres to the $966 billion limit set by the sequester for 2014 — “the maximum amount the law would allow without having to make any across-the-board cuts — in other words, no sequester.”

The implication is that Republicans are being prudent and living within the limits of the law. But it’s more complicated than that.  As we noted, the sequester cuts are divided between “security” and “nonsecurity” portions. According to the Congressional Budget Office (Table 4), the Budget Control Act caps for defense are $498 billion, while the caps for nondefense are $469 billion. That adds up to $967 billion.

But let’s take a closer look at the actual budget allocations by the House Appropriations Committee. The Defense Department allocation is more than $512 billion by itself. But there are also various pieces of the “security” cap that are scattered in the Energy and Water, Homeland Security and Military Construction appropriations bills, worth about $35 billion. That brings the House allocation for security spending almost $50 billion above the cap — meaning it would trigger a sequester.

Jen Hing, a spokeswoman for the House Appropriations Committee, acknowledged that the House Appropriations allocations could not be currently enacted into law. She said that the House Republican budget plan allows the spending bills to pass the House as long as the topline number for both security and nonsecurity does not exceed $967 billion.

“We are assuming that there would be a fix to sequestration” after negotiations with the Senate, she said. “We want a long-term budgetary fix that undoes sequestration and undoes the caps.”  She said the House started with a higher defense figure than allowed under the law because from the chairman’s perspective, security in the country should come first.”  (Rep. Hal Rogers of Kentucky is the chairman.)

Amber Marchand, communications director for Blunt,  said the senator was not trying to be misleading.

 “This paragraph is something you have to take in context. Sen. Blunt was clearly referring to the topline $966 billion cap, and he was asserting that House appropriators have taken a step in the right direction to stay within that overall spending limit without enacting arbitrary, across-the-board cuts — all of which is accurate,” she said. “Sen. Blunt’s argument in the op-ed is that rather than raising the spending totals above the Budget Control Act levels, we should replace the sequester with smarter spending choices that remain within its limits. That's what the House does, as Sen. Blunt accurately states.”

She pointed out that Blunt said that “House appropriators have moved us forward,” meaning that “he’s not saying this is final;  he wrote that it’s a step in the right direction.”

 

The Pinocchio Test

Blunt is engaging in some budgetary sleight of hand here. How did the House move the process forward with a bill that cannot be enacted into law? He certainly doesn’t suggest that the House bills — or the law — would need to be changed in order for it to become law.

Note that Blunt said that the $966 billion figure would result in “no sequester.” But, for budget enforcement and sequestration purposes under the Budget Control Act, it doesn’t matter what the overall figure is; instead, sequester is triggered if either the security budget or the nonsecurity budget exceed the caps. By focusing on that overall amount, Blunt is obscuring the fact that the House bill, as currently written, would violate the sequester.

It’s fine for Blunt to dispute the Democrats’ approach of wanting to rewrite the law. But his opinion article certainly leaves the impression that a sequester is bad and the House appropriations bills would avoid it. But that’s not the case.

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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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