Paul Ryan Throws Up All Over Reid $1 Trillion Budget Gimmick

Tyler Durden's picture

Earlier it was our turn to suffer a series of subdural hematomas courtesy of the $1 trillion in "savings" from wars yet unfought as per Harry Reid's plan "proposal." Now, it is Paul Ryan's turn.

A Trillion-Dollar Gimmick

July 25, 2011

 “Why, one wonders, not ‘save’ $5 trillion by proposing to spend that amount to cover the moon with yogurt and then cancelling the proposal?”

-George Will, Washington Post, March 12, 2009

Claim 1: “Winding down the wars in Iraq and Afghanistan will save $1 trillion.”

Reality: The Reid plan relies on the inaccurate assumption that surge-level spending in Iraq and Afghanistan is scheduled to continue over the next decade. An honest budget cannot claim to save taxpayers’ dollars by cutting spending that was not requested and will not be spent. Senate Democrats are employing a budget gimmick that will not fool the credit markets and does not address the urgent need for Washington to get its fiscal house in order.

Claim 2: “Paul Ryan’s budget also included this savings in its deficit reduction calculation.”

Reality: False. The House-passed budget cuts $6.2 trillion in spending relative to President Obama’s Fiscal Year 2012 budget request. This $6.2 trillion figure assumes ZERO savings from the global war on terror relative to the President’s budget.


The $2.7 trillion debt-limit increase proposal offered by Senate Majority Leader Harry Reid contains a $1 trillion gimmick meant to disguise the plan’s shallowness on spending cuts. Supporters of the Reid plan are measuring their savings against a baseline that assumes the continuation of surge-level spending in Iraq and Afghanistan, even though the President has neither requested this funding nor signaled that he might request it. Instead, the President has signaled the opposite: a troop drawdown over the next few years. In other words, the Reid plan is claiming credit for “savings” that were already scheduled to occur, and for “cutting” spending that no one has requested.

Rather than defend this gimmick on the merits, supporters of the Reid plan are defending it by claiming that House Republicans “also included” this $1 trillion in savings when calculating spending reductions in the budget resolution that passed the House last April. This claim is false. The House-passed budget cuts $6.2 trillion in spending relative to President Obama’s FY2012 budget request, and this spending reduction assumes ZERO savings from the global war on terror relative to the President’s budget.

In the interest of maximum transparency, House Republicans produced additional estimates in order to provide a broad range of comparisons by which outsiders could judge the seriousness of the their budget’s commitment to real spending cuts and controls.

For instance, Table S-4 of the House-passed budget provides two savings estimates. The first estimate compares the House-passed budget to the “current law” baseline used by the Congressional Budget Office [CBO], even though House Budget Committee Republicans have consistently noted that the CBO current-law baseline is not the most reasonable budget baseline with which to compare future-year budget plans. For example, the current-law baseline assumes a $3.5 trillion across-the-board tax increase in 2013, as well as a continuation of spending for the global war on terror at its current level for the rest of the decade, with upward adjustments for inflation. The CBO has noted that these policy outcomes are unlikely, which is why it has also constructed an “alternative fiscal scenario” baseline that assumes more realistic outcomes.

In order to provide a more relevant comparison, House Budget Committee Republicans provided a second estimate in Table S-4, comparing the House-passed budget to President Obama’s FY 2012 budget request. This comparison makes clear that, even with no savings attributed to the troop drawdown and with identical numbers to the President’s on the war on terror, the House-passed budget cuts spending by $6.2 trillion relative to the President’s request.

It’s one thing to include, as the House-passed budget does, information about savings relative to the CBO’s current-law baseline as part of an effort to be comprehensive and transparent. It’s another to claim, as supporters of the Reid plan are claiming, that such “savings” represent a major commitment to cutting spending. It simply isn’t true.

It is encouraging to see Senate Democrats acknowledge that job-destroying tax increases are a bad idea – and that they are ready to work with House Republicans to cut government spending. Yet it is critical for policymakers to maintain credibility as they work together to deal responsibly with the debt ceiling. Senator Reid’s misleading claims will not pass muster with credit markets. Such gimmickry does a disservice to the American people, who deserve responsible, honest leadership.

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CrashisOptimistic's picture

I know it's customary not to read the entire article before commenting.

Read this one.

Ryan is the budget guru of Congress.  He understands the methodologies and rejects the old approach that ran up the debt.

He trashes Reid's plan because Reid's plan has nothing in it.  Cuts have to be real, deep and now.  There is no choice.

kito's picture

@crashis--ryan rejects the old approach, really? how much does he want to cut immediately from the 600+ billion dollar bloat coming from the pentagon? dont get caught up in the "good congresspeople vs the bad congresspeople" show. they are all blood sucking parasites.

CrashisOptimistic's picture

The Pentagon will be cut.  It all will be cut.

It's important to understand the specifics of DoD's budget.  A big chunk of that 600 billion is retiree medical and pension.  That will be cut, but only when medicare and civil service pensions are cut.  When we get there, the military won't be immune, and Ryan has said that.

But more important is the layout of force structure.  The dirty little secret of warfare is that nuclear weapons are very cheap.  They don't require tens of thousands of men on a front line with another tens of thousands in support.  They are metal on a rocket and a few hundred guys can maintain them.

That means to get savings of significant numbers, you have to cut conventional forces.  When you do that, you present a future President with a crisis response proportionality spectrum that is very binary -- zero response or nuclear.  You have taken away all his other responses.

So yes, the Pentagon will be cut, but you could cut all 100% of its 600B and still face the majority of the deficit to reduce.


nonclaim's picture

They are metal on a rocket and a few hundred guys can maintain them.

Have you heard of WOPR? We can save even more!

sun tzu's picture

Cut the entire DOD budget and we still have a $1 trillion deficit each year. Why not roll spending back to 1999 levels and repeal the Bush tax cuts? Both sides get what they want and we will be pretty close to a balanced budget. 

packeteerist's picture

Ryan is a fucking joke like Reid, Oblama, Liberjew, and the rest of Congress. His plan is even more of a joke because he has fooled dipshits like you into thinking he is cutting. Or you are a online fluffer for Ryan.

Missiondweller's picture

packet: Name some specifics, otherwise you just sound like a partisan hack and are contributing nothing here.

packeteerist's picture

How the fuck can I be a 'partisan' when I hate both sides, fucktard. go google his 'plan' for yourself sheep, and then square that with our interest due on the new debt ceiling for the next 10 years - unless you don't have the intellectual curiousity - you are the partisan more likely.



Clint Liquor's picture

The American People deserve responsible, honest leadership?

Isn't it the American People who elected these buttholes?

High Plains Drifter's picture

another dirty little secret is that according to the audit done by frank dodd mandate,  all of those trillions given to those 4 united states banks probably , did not make them well. they are still in the hole. gee i wonder why?  what finanicial black hole are they out there sitting on that we don't know about......

Tuco Benedicto Pacifico Juan Maria Ramirez's picture

There is a $1,500,000,000,000,000.00 black hole of derivatives which must at some point be unwound.  Saying that will be ugly is the understatement of all time.


Tuco Benedicto Pacifico Juan Maria Ramirez

High Plains Drifter's picture

if you remember a few years ago, there was a lot of talk about this. but that talk went away, but this problem did not. why would these banks need this kind of reserves?  something is fishy.........i mean what are we talking about?  trillions. now it appears nobody even cares when you talk about trillions. it is amazing.........

Al Gorerhythm's picture

When the fringe dwellers started talking trillions, I started thinking gold (and silver).

mynhair's picture

$800 billion in failed Porculus spending, which is baselined thanks to 815 days with no budget courtesy of the Libs equals a minimum needed cut of $8 trillion over 10 years.  Any questions?

mynhair's picture

$800 billion in immediate cuts is the minimum acceptable.


pesamystik's picture

What is the percentage of Americans being fooled by this "budget wrangling?" I'd like to know, probably 95 to 98 percent would be my ballpark guess. The banking, corporate, and military sectors will make out like bandits as usual, and meanwhile the American people will keep yelling that the other side is to blame. I just cannot believe I'm still living in this two party nightmare.

High Plains Drifter's picture

the nice easy going liar senator cockran was on cnbc this morning hinting about this very thing. he said that this budget discussion was at best , a non issue compared to overall debt problems, problems that we as a nation must seriously face and deal with or else...........gee, yah think senator?   we don't owe these crooks anything. they spent the money whatever money they are talking about. they stole it. let them deal with it. fuck them.

Id fight Gandhi's picture

Serious question...

Does anyone here have a breaking point which they will simply take their family and leave the country?

mynhair's picture

Wanted to 6 yrs ago, but couldn't get my money out.  Needed to unwind several 1031 deals inside the Apr tax date and couldn't.  Now have no buyers.

Global Hunter's picture

past mine but we're moving to a house in the country middle of August...oh that country?  I'm in Canada though and things are still stable on the surface here but I'd really like to be going to the southern hemisphere if I could wrangle it. In answer to your question we blew threw my breaking point this winter.

High Plains Drifter's picture

a few years ago, charles smith did a complete discussion on this very point. he said moving to the country has its good points and bad points. i am sure you can figure that out........getting out by yourself presents problems that can manifest themselves during bad times.........however, tactical withdrawals from the big cities is most encouraged at this time, if possible.........

High Plains Drifter's picture

there is nowhere to run, nowhere to hide. if you move, you will have to plug into the fiat system at the place where you live , unless you can figure out a way to divest yourself of all paper and live in the bush , somehow. it would be, instead of running, get on a war footing.......buck up, butch up and ruck up and get ready. the party is about to start.

Global Hunter's picture

HPD thanks for your thoughts.  In my case my wife's family is from that area and most are still there now and they're close.  There's definately no safe place and it will be no picnic, my main thought pattern was like this "if the ATMs stop or there are blackouts or the water and sewage system breaks down, even if public transport stopped it would be chaos in the city within hours.  Being on the edge of a small village with lots of space might buy us a few days to plan something and weigh up options".  Could be wrong but I'll take my chances

Yes_Questions's picture

I don't know: I've seen the movies: seems like things are really bad in the hinterland too (pre/post collapse)

mad max

the hills have eyes 1-3

the road

billy jack

children of men

red dawn

Though tactically it makes sense to be on land you could rely on for sustenance, the idea is so engrained from seventies era survival stories and beyond probably there would be lots of others thinking the same thing. 


DCFusor's picture

Yeah, but.  I moved to the far boonies in the 70s and its working great for me, and nice when times are good too.  None of those issues you quote are likely to apply in a "town" where most of the people are retired or close to it, and we're all friends.  No big defense issues should arise, but if they do, only I know my acres well enough to hide there and plink bad guys -- they'd never find me unless I wanted to be found.  We have a neighborhood watch on steroids, otherwise known as the little old lady gossip network, news travels quick = you'd have a heads up if a swarm of baddies were to show up anywhere inside miles, and people to come to your aid if they didn't take care of them themselves.  And vice versa.  Should a neighbor ping me with a problem - any problem, I'm there for them and they're there for me.

With the tiny infrastructure, this isn't even an easy place to get to with a map -- many miles of unpaved roads through the hills.  No mobs possible, no street corners.

Water everywhere, potable.  Rich land if you can grow on a slope (hilly in Appalachia) and so forth.  There are places, and really you don't want to have to force yourself into one, but be there already if bad things go down.  Remember "We'll take care of our own" can be good if you're one of the "We".

Slowly getting slightly more crowded.  All the places here used to be hundreds of acres.  But as the old folks die, their kids divvy up the land and sell it at auction to grab the dough and go back to the city (idiots).  County will only let you divide so small, so plots under 10-20 acres are quite rare, and going for maybe 4k acre or thereabouts -raw land, you do the rest.  Home cost like, well, homes - not as much as in the city, but a mcmansion is a mcmansion, and there are some around (mostly for sale, for some odd reason).

Missiondweller's picture

I'm certainly no survivalist but I've taken some precautions. I have extra gasoline, enough that I could drive out of the metro area if gas stations were down. I have extra food and a "Go-bag" used for earthquake prepoaration. Its also convenient if I'm "evacuating" the metro area do to urban strife or some other issue.

youngman's picture

I did....I moved to Colombia....but I do not have any family....its a great country though

monoloco's picture

Absolutely, I hit mine 20 years ago and bailed. Best thing I ever did.

Bobportlandor's picture

I have all ready started a fallback plan just in case, and its not as easy as one might think.

Another ID is to assemble  group of diverse souls to tough it out somewhere in the country, away from the cities.


HungrySeagull's picture

I got out of the Cities on the east coast.

I am a adequate distance away from downtown, however we are not in the best of places. Drawing on some of my experiences as a Trucker, there are spots in the USA that God created just for me and my family.

Everything else is established. Guns and all that. Meanwhile we stay and stick it out.

But to leave the country? Erm, that would be something, but me thinks it can be done using a Seagoing vessal. (A 30 footer or something)

MacchuPicchu's picture

I'm here in the US and my fiancée is in Paris (she's French) – the plan was for her to come here and practice medicine in about 2 years' time, but I've begun to think we might be less effed over there (euroskeptic trolls note: I did not say 'good' I said 'less effed'). So your question is apt. Before I really started paying attention my breaking point was 'Republicans let the financial sector off the hook for causing the meltdown.' Then I realized both Repubs and Dems play in a cute little sandbox the borders of which are determined by the big money that owns our political system, so realistically, I should pack my bags. Trying to nail down a specific breaking point is hard. I think in the end it might be tied to my employment situation as a freelancer. If my big clients went away I'd probably just head overseas. Not having kids makes it much easier. 

caerus's picture

Thought about it...have to go through an embassy... hear the waiting period now is over a year decided to stay...fuck it this is my goddam country

Animal Cracker's picture

It's not as easy as some make it sound.

Unless you are a Doctor or possess a skill that is needed in your destination country, the hurdles for immigration can be challenging.

It seems that some folks think we get extra credit for being Americans...but we do not.

As for those places where immigration is a possibility - say Belize - it would be wise to consider the tradeoffs regarding infrastructure, crime, etc.  When TSHTF, you don't want to be perceived as the rich American hiding out in his villa.

Global Hunter's picture

I must say despite what the MSM tries to tell me, I think the Democrats and Obama are getting schooled.  Events on the ground could change quickly I'm referring to the last couple of days.

mynhair's picture

Would you like a refreshing cup of TEA?

Global Hunter's picture

When i've ordered a tea in America it can mean hot tea (pronounced hat tea in western New York) or iced tea and the first time I was asked "hot tea or iced tea" when I ordered one I thought they were nuts.  When I was in Texas tea was a big jug of iced tea with lemon in it and I'd take one of those for sure.  Unless TEA stands for something...

edit: I wrongly assumed you were taking the piss in regards to my grammar, no I'm not a tea party person I was just making an observation that the Republicans are driving the bus right now, but as I said that could change.

nmewn's picture

"Unless TEA stands for something..."

TEA stands for Taxed Enough Already.

And I like it cold & sweet, kinda like revenge.

Global Hunter's picture

Are you a greedy Bengal (?) that doesn't like paying 50 cents on every dollar to bail out banks, GM, "the Libyan people" etc. (sarc)

caerus's picture

The true Texas tea is, of course, west Texas intermediate...glad you liked it btw...from the atx

nmewn's picture

Hangin on to their necks like pitbulls...DC hasn't seen anything like this in years, their skeered ;-)

ArkansasAngie's picture

There are many ways to skin a cat.  I propose that we not reelect any of the current CONgress or Senate.  That will reduce their pension funds and health benefits -- even with their own, private super,duper pensions and health benefits structure they voted for themselves.

Until I see the laws of this land apply to our government I won't be happy.

What we need is a law and order candidate which starts with Washington and Wall Street.


mynhair's picture

-1 for advocating torturing cats

-2 for not having a TEA party member represent you

-4 for not realizing when these scum are eligible for pensions or HC

+6 for realizing there are laws

nedwardkelly's picture

That will reduce their pension funds and health benefits

How so? Dont congresspeople become eligible for full benefits after three years? Unsurprisingly less than a full term?



DosZap's picture

Excuse me, but this a bit OT, but I think if you get HIS(His Majesty before a LaRaza Goup) inference, it will scare the shite out of you.

Totally different issue (but relevant IMO), as to where we may wind up, if we do not WTFU.

Direct Quote:

"The idea of doing things on my own is very tempting, I promise you, not just on immigration reform. But that's not how our system works. That's not how our democracy functions," Obama told the National Council of La Raza.

mynhair's picture

Heil Oweblahma!  Screw the Constitution.  Clinton did.  LBJ did.  (hmmm - lbj, but I digress)

FDR and Wilson did.

When in doubt, stack the Courts with moron drones!

Yes_Questions's picture

Especially when pesky campaign contribution limits get in your way:


alien-IQ's picture

Seems like our recent presidents are fond of such ideas...for example:

Things would go easier if this were a dictatorship so long as i'm the dictator” - George W. Bush

i-dog's picture

They (Bush, Obomber and the Congressional leaders) know what's coming ... this stage-managed and scripted standoff between the House and the Senate is the perfect setup for a President to "take charge" and "do what's right for the country at this critical time". It'll happen before 4Q2012, so expect it to happen either now or, more likely, after just one more kick of the can into next year.

IMO, the election will be called off next year and Obomber will impose martial law under a "state of emergency". All the necessary Executive Orders have been in place for ages---and supplemented by the Patriot Act extension (passed by 2:1 in the House and 3:1 in the Democrat Senate).

In the meantime, Obomber willl just continue playing golf until he gets the stage call from The Directors.