CBO Finds Reid Plan Half A Trillion Short Of $2.7 Trillion Promised; Actual Cuts Are $375 Billion Over Ten Years

Tyler Durden's picture

Yesterday, we roasted Boehner over his proposed deficit-cutting plan after it was discovered that it cut about $250 billion less than had been promised. Now it is time to do the same to Harry Reid, after the CBO has just released its analysis of his so-called "plan", which has double the credibility, and dollar, hole: per the CBO the plan will only generate $2.2 trillion in savings, half a trillion short of the promised $2.7 trillion. But wait, it gets far, far more idiotic. Per the CBO "The caps on appropriations of new budget authority excluding war-related funding start at $1,045 billion in 2012 and reach $1,228 billion in 2021" - that's right: savings from not fighting future wars - a cool trillion. But why stop there - savings from not declaring war on Mars: $1 quadrillion; savings from not paradropping suitcases full of $1 billion dollar bills for every US citizen: $333 quadrillion, and so forth. But wait: there's more: "The legislation also would impose caps of $127 billion for 2012 and $450 billion over the 2013-2021 period on budget authority for operations in Afghanistan and Iraq and for similar activities." But wait, there' even more: "Savings in discretionary spending would amount to nearly $1.8 trillion, mandatory spending would be reduced by $41 billion, and the savings in interest on the public debt because of the lower deficits would come to $375 billion." Gotta love the circularity: less interest payments are part of the actual deficit cuts! So, here's the math: of the $2.2 trillion in "savings" strip away non-savings from non-authorized "wars" and you get... $750 billion... and take out the $375 billion in, no really, interest savings, and you get... $375 billion. OVER TEN YEARS! Is there a wonder why with idiotic leaders like this the true US rating is CCC at best?

Here is how the Reid plan looks in paper:

Source: CBO


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jkruffin's picture

So, exactly what kind of fuzzy math are they using to say cutting $375 billion over 10 years are cuts? When they are spending over $1 Trillion a year?  Real math shows the hole gets bigger and bigger.  Are these politicians that stupid or what?

101 years and counting's picture

"Are these politicians that stupid or what?"

No.  But they know that 90% of the population is that stupid.  9% are wealthy and dont care and 1% cant do anything about it.


TrafficNotHere's picture

<<=== politicans are stupid

<<=== politicans are smarter then us



SheepDog-One's picture

When you factor in Bernank raiding $200 billion from govt pensions to keep the behemoth aloft just since QE2 end, we see what a total insignificant joke $375 billion over 10 years really is. These people should be dragged out and hanged.

fuu's picture

Timmah took the pensions.

Derpin USA's picture

The budget deficit and the overall debt burden are two related but separate things.

The issue has never been whether or not the debt would grow, just by how much.

Sophist Economicus's picture

This is not 'fuzzy math', it's that 'new math' being taught to our young citizens (and non-citizens alike) in our illustrious public schools.    This new kind of thinking has been backward tested in union halls across america and has been found to produce the desired result -- a growing population of citizens that cannot find its ass with two hands

Cognitive Dissonance's picture

Whoops. Now that's embarrassing when you are exposed by the CBO.

Look mom, Harry Reid has no peas.

BTW look at the word em.barr.ass.ing

fuu's picture

"Look mom, Harry Reid has no peas."


InconvenientCounterParty's picture

I looked it up.


Boner: CBO estimates that the legislation would reduce budget deficits by about $850 billion between 2012 and 2021

Reid: CBO estimates that the legislation would reduce budget deficits by about $2.2 trillion between 2012 and 2021


But this is zerohedge, so just invert those and carry on with screaming at the mirror.

johnnymustardseed's picture

It is all bullshit... none of this matters. How about a VAT on Chinese crap sold here for deficit reduction only. If the Chinese don't like tell them to stick the worthless Treasuries up their ass and eat dirt not our imported wheat and corn.

spartan117's picture

That would be real smart.  Let's increase taxes on goods sold here in the US so consumers pay more for things. 

pazmaker's picture

Reid and  Boehner ---same horse different color.   Let's just default already and get it over with!

NumberNone's picture

Ass-clowns running the show that spend their lives in a bubble.  It's not real money, there is no real impact to their pampered lives, the only risk is they get voted out and spend the rest of their lives as millionaire lobbiests.  Freaking sit up in DC, never make a hard decision, negotiate wiith their buddies, and slap themselves on the back as Master Negotiators and Masters of the Universe. 

Only now when the eyeballs are on them and the public takes a moment to look over the shoulder of their elected representative to watch them work do we really see what  a bunch incompetent jackholes they are. 

midtowng's picture

I still want to see the wars end. Can we include that in the deal anyway?

CrashisOptimistic's picture

Iraq has remained on the Bush withdrawl schedule since Obama was elected.  That is, until recently, when the schedule was slowed, and odds are pretty high that a new security agreement will retain 15-20,000 troops there indefinitely.  That's right, Bush was ending the war faster than Obama has.  Is this bizarre or what?

Afghanistan troop levels ramped up since Bush left office, as have casualties.  That also is scheduled for reduction and that reduction is in the most plausible CBO baseline.

This is about money.  It's not about wars.  Wars can appear at any moment for any reason (one is getting ready near the Senkaku Islands right now, and it will go nuclear).  

karzai_luver's picture

Just as with the USSR--- when the troops begin pulling back in force you will KNOW the collapse/implosion is at hand.

Bin laden of the deep says "winning now , bithcezz"?




Derpin USA's picture

Good article, but I take issue with downplaying the savings from interest payments. That's a legitimate savings. If you're going to base current projected deficits and total debt by including interest payments (which you should), reducing those payments should be taken into account as well.

Buckaroo Banzai's picture

Umm...yeah. You do realize that what you are saying makes no sense unless you assume that Congress has full legislative control over the interest rate they pay on the debt, right??

Derpin USA's picture

It's based on the best guesses of the CBO, just like anything that they put out.

Obviously if rates go up enough, the savings would be cancelled out, but that actually makes a pretty good argument against defaulting and creating an institutional selloff of Treasuries, doesn't it?

Buckaroo Banzai's picture

Stop being ridiculous. Do you know what a budget is? Budgets aren't ESTIMATES, they are BUDGETS. The meaningful parts of the budget are the parts that you have 100% control of. The meaningless parts are the parts where you don't have control.

Derpin USA's picture

The CBO is estimating the effect upon the total national debt. What part of that is so hard to understand? If a budget deficit grows, so does the interest payment. If it declines, so does the interest payment. Therefore, reducing the budget reduces the increase to the debt both by reducing spending and reducing interest payments.

You think the CBO includes that factor for shits and giggles?

Buckaroo Banzai's picture

ARE YOU HIGH? They are claiming the interest savings as BUDGET CUTS! NOT "estimates"! Go back to the top and read the piece.

karzai_luver's picture

They are off by such amounts as to be little more than monkey shit readings.


TuesdayBen's picture

CongressWeasels and the 'Prompter have gotta be hatin' the internet and getting instantly called out on their self-serving, mealy-mouthed BS, with no intermediate MediaSpinner between the CongressWeasel and the Sheeple, ala Brian Williams and his ilk, providing a stamp of FauxCredibility

jkruffin's picture

As a man said the other day:

If you voted for Obama in 2008 to prove you weren't a racist, then in 2012 vote for anyone else to prove you are not an IDIOT!

lizzy36's picture

Yeah, because voting for Michelle Bachmann is really going to disprove that idiot theory.

Buckaroo Banzai's picture

At first, I thought Reid just had monumental contempt for the american people. Then I started to wonder, does he actually think like this? That maybe he might actually believe the shit that he talks?

Then I realized that it is a form of psychosis, and it all made sense.

Growyourownfood's picture

But why stop there - savings from not declaring war on Mars: $1 quadrillion

Now that was funny

PeeTee's picture


Can I see the cost breakdown of that $1 quadrillion.

To my knowledge, declaring war doesn't cost much. Just the price of a phone call or a postage stamp...


FED: I hereby declare war on UR-ANUS.

wandstrasse's picture

wait, wait, I have insider info, they will pull out the black hole event horizon printing press, called TTIID (this time it is different) which solves ALL problems, it is in the final stage of testing and will be unveiled in 4,3,2...

Archimedes's picture

Come on folks! It is a Harry Reid plan! That alone should scare the hell out of you. This is a guy who is felating anyone he can to keep his large REIT holding aloft and the guy who is in charge of Nevada. A place where 67% of homes have negative equity! What did you expect from this Dips**T!



SheepDog-One's picture

'Your leaders shall be the very worst among you'. 

fishface's picture




they can't even get their maths right

hilarious...or in that position dangerous



obs. Schools need more funding

dwdollar's picture

They're desperately flinging poo in hopes that something will be swallowed by the public.

Everybodys All American's picture

and you wonder why republicans just say no?

karzai_luver's picture

no, but I DO WONDER why you listen.

Oh well , enjoy your time in prison. Funny they don't need bars anymore.


grunk's picture

 "savings from not paradropping suitcases full of $1 billion dollar bills for every US citizen: $333 quadrillion"

You mean to say that government was going to provide me with a suitcase of one billion dollar bills?

That makes it an entitlement. I REFUSE TO GIVE UP ANY ENTITLEMENTS.  I'm calling my congressman!!!

adonisdemilo's picture

What a bunch of assholes.

 All smoke and mirrors.

They might as well get David Copperfield or Yuri Geller in to just make the damn deficits disappear.

dick cheneys ghost's picture

Take a look at the coburn plan that nobody is talking about........$9 trillion in cuts and is still not enough........



nedwardkelly's picture

Thanks for the link. I hadn't seen this one talked about anywhere... Here's the overview link:



There's some BS in there, but it actually looks to list actual, legitimate CUTS as opposed to hocus pocus 'savings' that involve not doing something that we maybe weren't going to do anyway.

pre's picture

Question: Are you smarter than a fifth grader (in economic studies)?

Answer: No, no you are not.

Debtless's picture

"But why stop there - savings from not declaring war on Mars: $1 quadrillion"

Sure you liberals will continue to just let the Martians continue to endanger our freedoms - as they hate OUR WAY OF LIFE. We must come together as a great nation and spare no cost to prevent this Martian jihad.

CrashisOptimistic's picture


Martians are hard to negotiate with.  You have to use force.

taint's picture

For 2012, can't they take 2011 expenditures and just subtract 450 billion, push it down on a pro rata basis to every program and tell them to make it work?  then do the same for 2013 - 2015?  This whole couch the reducting in a 10 year plan is simply bullshit.

the number of lying stupid bastards in Washington is unimaginable.  

CrashisOptimistic's picture


The reason this is not done is the GDP/Unemployment shock that would occur.  Remember, Government Spending is a direct component of the GDP equation.

Obama's re-election advisors would unanimously recommend veto.  A spike in unemployment going into the election is not acceptable.

FYI, note that this is the VERY SAME explanation for why the Democrats discarded a demand for tax increase.  Tax increases are never phased in.  They are immediate.  If you phase them in, taxpayers maneuver to reduce their future liability and one never gets the revenue expected.  

But regardless of that, tax increases can't get a majority of even Democrat votes.  If it could, it would have been instituted when they had overwhelming majorities.  

So it's spending cuts.  The Democrats don't want any tax increases.  They drain money from a teetering economy.