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A Project of The Annenberg Public Policy Center

Reid Twice Wrong on $2.6 Trillion ‘Cuts’

Sen. Harry Reid was doubly wrong when he claimed that Congress already has cut $2.6 trillion from projected future deficits by reducing “non-defense programs” alone.

In fact, legislation he refers to applied to both security and non-security spending. Furthermore, a good chunk of the deficit reduction came from tax increases, not spending cuts.

Reid made the claim — twice — on ABC’s “This Week” on Feb. 3, in support of his argument that further deficit reduction should include more tax increases and cuts in military spending.

Reid: The American people need to understand that it’s not as if we’ve done nothing for the debt. $2.6 trillion, $2.6 trillion already we’ve made in cuts. And all those cuts have come from non-defense programs.

And he repeated his spurious claim again, later in the program:

Reid: I repeat: $2.6 trillion already, all coming from non-defense. If we’re going to have a sequester, defense is going to have to do their share.

Reid’s $2.6 trillion figure (which covers a 10-year period) has been puffed up a bit since he said on the Senate floor — only three days earlier — “We have already made nearly $2.5 trillion in historic, bipartisan deficit reduction.” Since then, he has added over $100 billion to the 10-year total and started claiming that it’s all from non-defense spending, which is not the case.

Democratic claims of $2.5 trillion in deficit reduction refer not just to spending cuts. For example, President Obama said at a news conference on Jan. 14 that he had signed “a total of about $2.5 trillion in deficit reduction over the past two years.” But Obama included in that figure only $1.4 trillion in actual “spending cuts.”

Obama’s figure also included more than $600 billion in tax increases on upper-income individuals, which he signed Jan. 3. And it included about $500 billion in reduced interest payments, resulting from reduced future borrowing. A spokesman for Reid, whom we contacted by email, also conceded that Reid’s higher figure includes what he called “tax savings,” by which of course he means higher taxes.

According to a White House “fact sheet” issued Jan. 1, the spending cuts the president is describing include $1 trillion from the Budget Control Act of 2011, which resolved a debt-ceiling crisis that year. Reid’s spokesman also confirmed that his total included “the spending caps in the BCA.” But contrary to Reid’s claim on ABC’s “This Week,” that legislation called for caps on all “discretionary” spending, including both “security” (a category mostly made up of military spending) and “non-security” spending.

The caps on discretionary spending began in fiscal year 2012 and were imposed again this fiscal year. The Obama administration estimates that they will reduce “security spending” by “about $420 billion … over the next 10 years compared to CBO baseline levels,” including about $330 billion “specifically from the Department of Defense.”

It’s important to note that the bulk of these “cuts” have yet to materialize. The Budget Control Act imposed “caps” on discretionary spending that Congress is supposed to comply with in future appropriations bills. The White House’s projections of $2.5 trillion in deficit reduction include budgets through fiscal year 2022, and, of course, it remains to be seen what specific cuts to federal programs those future Congresses will actually make.

Even if Congress does meet those caps, huge deficits will continue unless further action is taken. By fiscal 2023, the debt owed to the public will reach nearly $20 trillion, according to new figures released Feb. 5 by the nonpartisan Congressional Budget Office. That’s an increase of more than $8 trillion on top of the $11.6 trillion already owed.

— Brooks Jackson