December 19, 2014

Efforts to Reduce Structural Deficits Must Mean More Than Rigging the Scorecard

  • The federal budget is an expression of our country's values. Where we choose to spend and at what levels, how and who we tax, and the borrowing we...

Public concern about the nation’s rising debt burden is beginning to have an impact on the legislative agenda.That much was evident as the House passed a scaled back “extenders” bill on May 28 by a slim margin. Originally estimated to have a gross cost of $192 billion and a net deficit increase of $134 billion, the final bill carried a gross cost of $114 billion and a net deficit increase of $54 billion.

But much of this cost reduction was accomplished by timing shifts rather than changes in policy. For example, shortening the extension period of certain unemployment benefits “saved” about $8 billion and sunsetting an increase in the Medicare physician reimbursement rate (the “doc fix”) after 19 months “saved” almost $40 billion.

As the extenders bill now moves to the Senate, much of the debate will be about provisions that the House dropped and the offsets it retained. There are legitimate, and conflicting, concerns with each. From a fiscal standpoint, however, it will be important to keep an eye not so much on the official score but on the cost of maintaining the policies that Congress votes to extend. Concern about deficits must mean more than simply rigging the scorecard.