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.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
New World Chaos's picture

Will the trigger be food riots, false flag terror, or Obama's imminent loss to Ron Paul?

c) All of the above, and the PC left and the neocons will cheer.

SovietCong's picture

Reid: “This proposal satisfies Democrats core principles by protecting Medicare, Medicaid and Social Security and providing a long-term extension of the debt ceiling that the markets are looking for. The bill also meets Republicans demands – two major demands: it contains no revenues and the amount of the cuts meets the amount of the debt ceiling increase.”

So here's the Dems' vision of how the economy works: markets primary concern are long-term guarantees of continued debasement of dollar and money printing so that entitlements can be maintained. Latest polls suggest Americans in their majority approve Mr. Reid's take on economics.

Yes_Questions's picture

It contains no revenues?



legal eagle's picture

You cannot seriously talk about deficit reduction and balanced budgets without cutting war spending.  Republicans seem to want to take the money from Grandpa on Social Security and give it to Blackwater. 

poor fella's picture

Who the hell wrote this? Kudlow? Really? "Job-destroying tax increases"?

I never realized IT'S SOOO EASY! Not increasing taxes will create jobs!! ??

Spread the word!! We're saved!! Better times ahead!! 'They' figured it out! I'm going out right now to buy some shit I don't need... cuz taxes ain't goin' up! I been on the sidelines sooo long waiting to buy sumpin'

CrashisOptimistic's picture


Both tax increases AND spending cuts are fiscal contractionary.  They will reduce GDP.  

If you believe reducing GDP destroys jobs, and it's likely everyone does believe that, then tax increases are indeed job destroying.

mynhair's picture

23% think Mikey really likes it.

poor fella's picture

I get it, just sick and tired of these simplistic arguing points that are constantly prattled off. What if there was a petroleum tax that went into a real energy policy and research into transportation fuel? Perhaps using the lease money from PUBLIC LANDS. Market forces don't exist for large national projects. This is a minor example - NONE OF THESE PEOPLE THINK LONG TERM! That's the problem. Ryan doesn't fool me.

Misean's picture

No of course not. Why, it was a government project that discovered a use for petroleum in the first place. And rocketry...why without government, it would have never got off the ground. Of course Edison and Tesla were both government project whores who got no where until Unky Sugah started handing out funds...and don't get me started on Mr. Westinghouse...

poor fella's picture

And a rising GDP is smoke and mirrors. Price * Production

So what..  Prices go up you say? Yay! Rising GDP and standard of living for all! 

The Bernank and Jeethner can take a two-ended formula, stick each end in their bumm, and have at it.

These politicians are like Richard Dryfus in 'What About Bob' and none of them have a clue how the world works outside their bubbles! Pimping books and photo ops - that's what's important!

Misean's picture

Someone's forgotten to take his lithium again...

Shell Game's picture


...another fav from the same album: N.W.O.

Calmyourself's picture

Yep, no difference between these two parties none... sarc..  On a more serious note for years, the fat years, there was no difference they just called their outrageous spending different things.  Hopefully the tea's can make a difference keep the left's fantasies of unending equal outcomes going for a few years.

RobotTrader's picture

You would think that will all this horrific news about political gridlock and infighting...

And the USA on the brink of a catastrophic default...

I'd expect ES and bond futures to be lock limit down and gold at $2,000.

But instead, cult tech stocks like AAPL and retail stocks with insane P/E ratios over 100 are getting Heatmapped to new highs every day, and gold stocks like AEM are left for dead like a frozen corpse.

Misean's picture

My stock of gold is doing quite nicely.

mynhair's picture

My stock of gold (miners- AU)  took a dump at close.  What's up with that?

Misean's picture

Dunno. That's why I don't "own" paper promises to pay paper promises which promise nothing.

John_Coltrane's picture

Think South African Nationalization talk.  That's why I'm short BVN (Peru nationialization fears) but long gold itself.  General theme, Long the commodity short the producer.  But I like GG for their geographic diversity and good reserves and NXG for their buy out potential.

poor fella's picture

Aww, one whore doesn't like another whore's eyeshadow?

It's a wonder they can fiddle with the sleight of hand going on.

slewie the pi-rat's picture

fuk tyler durden & Total Score

  • free zHedge!
  • end The Committee To Keep Total Score!
  • eat shit; lay eggs; and die young
mynhair's picture

It's the plank for you, Mickey!  You scurvy rat!

ping's picture

What IS it with this Total Score stuff? And no, I didn't read the instructions! When I come home from a hard day disconnecting the electricity from old people's homes, or whatever it is I do, I don't have time to read about this kind of communist comments system! I don't want to familiarise myself with it. That's what the muslims would demand of me! You're forcing Obama's sweaty dong down our throats, Tyler Durden!!!

cosmictrainwreck's picture

sou you're the one that un-hooked my Granny's house! right after i report you to obama, I'm gonna....I'm gonna....

Dr. Porkchop's picture

It may be subjective, but I believe that finding that oven pizza you thought you ate already AND then finding $20 you forgot about would be a total score.

slewie the pi-rat's picture

i got this over on   And The Kickers In Reid's Proposed "Deficit Cutting" Plan Are...

slewie the pi-rat (Total Score:2)     YAY!

but only on one post;  someone may have objected "2" me discussing them licking tyler's butt-plug;  who could ever tell?

caerus's picture

I'm keeping score at home...currently at 69

jmc8888's picture

So he calls Reid's a trillion dollar gimmick?

So Ryan's is a x trillion dollar gimmick?

Hey Dumbass fascist Paul Ryan, you do know if we do your plan, or even a more austere plan, it is only kicking the can down the road, right?

You don't mind kicking the can down the road, nor do any republicans, as long as it cuts 'entitlements' in the process.

We don't have a spending problem, we don't have a taxation problem, we have a fraudulent debt problem.


Boehner is a fucking idiot, because his plan doesn't work.


Just ask yourself, what has changes within our fucked up borken monetary system, if we give up entitlements, and nothing else changes? Oh that's right, nothing that got us here. Wall Street will still be taking it all, and will have latitude to take more.

Paul Ryan and Boehner's plan, doesn't change squat, it only throws people to the wolves, to pay off bankster fraudulent debt.

So if you are for Boehner's plan, or Ryan's plan, how does it feel to throw people to the wolves for bankster fraud, how does bankster dick taste? I wouldn't know, but anyone that is swallowing Boehner's or Ryan's plan and saying to them to hold firm, sure does.

My guess is salty.

Boehner and Ryan, throwing people to the wolves for wall street since, well forever.  They and their cut, cap, and puke plan(s) are fascist, bankster approved bullshit.

Enjoy drinking the sophistry they're offering, hell do 10x what they are offering, it won't change the broken system one bit.

Glass-Steagall is 1000000000000000x whatever Ryan, Paul, Boehner put forward...AND you won't be throwing the real people to the wolves.

We have a fraudulent debt problem, so if someone wrote a fraudulent check on our national account, call the bank and cancel it.  Oh wait, just because it IS the bank that wrote the bad check that's different? Hell no.

Enjoy the taste of dick, Boehner, Ryan plan supporters surely must.  Fraud is fraud.  Boehner and Ryan's plan doesn't address the fraud one bit. Thus their plans do nothing to change what's broken.  But people will get their needless sophistry filled, propaganda instilled bloodlust.  Enjoy the rush, and you must be joking that these plans will change anything.  So why kill grandma? I guess for fun. There is no other reason.  It's grandma season. (oh and impeach Obama)

mynhair's picture

Could you share your thoughts on Harry (I had a stroke 10 yrs ago, and no one noticed) Reid?

Dr. Porkchop's picture

Picture the scene from the road warrior where they are making the big escape and Mel asks the crazy pilot dude what the plan is...

Plan? There's no plan.

Blanche DuBois's picture

Re impeaching Obama, interesting read on that subject here:

bigwavedave's picture

At 9pm President Barrack Obama is to announce a 10 year 'austerity' plan saving trillions of dollars in Gov't spending. To make it more palatable I thought I would share with you all a classic from 1959... Enjoy

John_Coltrane's picture

Just hope it doesn't include 10T$ of savings from not coating the moon's surface with yogurt!  Though that concept is very attractive from a performance art standpoint.  And will we make the yogurt on the moon or transport it there?  How will it be spread?  The mind boggles!

mynhair's picture

The Whole World Wonders...

what the fuk happened to waste, fraud, and abuse?

Shit, that's the entire Goobermint.

T-roll's picture

All of their plans are garbage, Ryan's included.  Does he realise that his plan would be unconstitutional if an amendment is passed to balance the budget?

r101958's picture

Let me get this straight.....passing a balanced budget amendment to the Constitution would be unconstitutional?.....hmmm, something's not clicking here.....

T-roll's picture

No Ryan's budget plan would be unconstitutional because it doesn't balance the budget for several years.

Debtless's picture

If we don't cover the moon with yogurt right away, the terrorists win.

legal eagle's picture


Well, if you are talking about the War on Terror, then their is an umlimited budget.  No equal outcomes for Grandpa, just guys at Blackwater.

Dr. Porkchop's picture

A planet of yogurt! Talk about a bacterial culture.

poor fella's picture

When America defaults, I wonder how many quadrillions of dollars are needed to bail out the world banks, the rich, and multi-nationals? This is starting to sound like a lot of money.

cranky-old-geezer's picture

Unwinding the quadrillion derivatives market will take about $1.98 net.

Let's see, I might have change here. 

Aw forget it, here's 2 bucks.  Keep the pennies.

T-roll's picture

We all complain about this mess in Washington, yet "We the People" are ultimately responsible.  We elect these idiots into office, complain about what they do and don't do, but we do nothing but sit on the internet and bitch, bitch, bitch.  Where are the riots and protests?  Obviously we Americans like this political theater.  Pass the popcorn, please.

mynhair's picture

To the Eurotrash out there,

Do your coin dealers buy the junk US silver?  The boobus wif wants to have sister-fest on your god-forsaken subcontinent, against all advice.

Yes_Questions's picture

Oh, enjoy the TEA.

Specially in Holland.

JuicedGamma's picture

Sweet Jesus, what a bunch of idiots.