Must-Read: Josh Barro (2012): Yes, the 1990 Budget Deal Spending Cuts Were Real

Must-Read: This “mistake”—by Ryan Ellis of Americans for Tax Reform—is not the kind of “mistake” that one can make by accident:

Josh Barro (2012): Yes, the 1990 Budget Deal Spending Cuts Were Real https://www.bloomberg.com/view/articles/2012-12-27/yes-the-1990-budget-deal-spending-cuts-were-real: “When you talk with conservatives about why they resist deficit-cutting deals…

…a response you often hear is that these deals produce real tax increases and illusory spending cuts…. But the deal conservatives hate most, the Budget Enforcement Act of 1990 (the one where President George H.W. Bush broke his “no new taxes” pledge) really did cut spending as promised. The claims that it didn’t are based on bad math. Ryan Ellis of Americans for Tax Reform made the usual “fake spending cuts” case against the 1990 deal last year…. This is false! The CBO’s five-year projection for spending prior to the 1990 budget deal was not $7.07 trillion… [but] $7.28 trillion…. The CBO had forecast $7.07 trillion in spending over this period in January 1990; this is the figure Ellis cites. The Budget Enforcement Act wasn’t enacted until November. In the intervening period, two things happened. First, tax collections were weak, leading the CBO to cut its revenue projections over the following five years. Second, the apparent cost of the ongoing savings and loan bailout through the Resolution Trust Corporation greatly increased….

When the CBO looked back at the Budget Enforcement Act in 2003, it found that Congress had actually adhered closely to its discretionary spending caps all the way through 1998, never exceeding the caps by more than $10 billion. (See the table on page 115.) Congress lost discipline after that, probably because the budget moved into surplus and spending restraint no longer seemed necessary. Of course, that heady desire to spend (and cut taxes) persisted much longer than the surpluses did. You don’t have to like the outcome of the Budget Enforcement Act of 1990, particularly if your primary concern is keeping taxes low. But you can’t argue that its promised spending cuts didn’t materialize, unless you think $7.09 trillion is more than $7.09 trillion.