Congressional Republicans have said that spending cuts must be at least as large as an increase in the debt ceiling. Negotiations over lifting the debt ceiling are ongoing, but the โmagic number,โ so-to-speak, would be around $2 trillion in spending cuts.
Cutting $2 trillion in federal spending sounds like a lot, but itโs actually relatively small because the cuts would likely occur over ten years. According to the Congressional Budget Officeโsย most recent budget baseline, the federal government will spend almost $46 trillion over the next ten years.
The following chart shows what $2 trillion in spending cuts over the next ten years looks like when measured against the CBOโs baseline. Even with the cuts, federal spending would still increase by $1.8 trillion:
Rather than actually cutting spending, federal spending (and debt) would continue to grow โ just at a slightly lower rate. And as Chris Edwards continues to warn, there is a strong possibility that some or all of theย โcutsโ could be phony.
cross-posted from Cato-at-Liberty
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- Feds and the States Tag-Teaming on Corporate Welfare - July 29, 2013
- Economic Development Administration Goes ‘Rambo’ on Itself - July 12, 2013