FJM-ing the Bipartisan Budget Deal

Late last night, in a coup de grace for The Establishment, Speaker Boehner released his masterpiece – a budget deal negotiated with President Obama. The Majority Whip, Steve Scalise, has been tasked with pitching the bill to the Republican caucus, so let’s go through his email to Republican staffers, FJM-style, and explain how bad this bill is. Remember, what you are reading is a Republican-to-Republicans email, meant to garner more Republican votes:

From: Matt Bravo [Deputy Floor Director]


H.R. 1314, the Bipartisan Budget Act of 2015 brings certainty to our appropriations process, strengthens our national security, and protects our troops.  The bill authorizes new spending levels in FY 2016 and FY 2017, offsets budget cap adjustment with mandatory spending cuts, reforms SSDI, repeals ObamaCare auto enrollment mandate, and increases the debt ceiling through March 2017. [emphasis in original]

You know it’s bad when the Republicans must *immediately* deploy their “it helps our troops!” talking points. Because if you vote against something that is ostensibly “for the troops” you are, ipso facto, “anti-the troops.” That the best bolded talking point is about funding the military (which is what “protects our troops” means) is an enormous failure for Republicans. Just a few days ago, while Hillary Clinton was defending her lies about a video in the aftermath of the Benghazi attacks, President Obama vetoed a bipartisan bill authorizing military spending for next year. He claimed it was unfair to spend more on our military while not increasing spending for domestic programs proportionately. He seems to have won that debate, as we will see below.

  • New spending levels for FY 2016 and FY 2017.

Let’s not let this simple line slip away too quickly. The minutiae of the exact spending number is not the offense here, though it is dispiriting. The problem is this – a Republican wave in 2010 flipped the House and strengthened the Republican caucus in the Senate; then, that Congressional group drove a hard bargain over the debt limit, extracting real cuts from Obama (in the form of the Supercommittee recommendations or an automatic sequester); then, those cuts were implemented for 2 years and conservatives rejoiced; but now, between the Ryan-Murray deal and this Bipartisan Budget, Congressional Republicans will have been responsible for pushing off four years of real spending cuts. The 2010 wave had one real legislative accomplishment to hang its hat on… and Boehner is about to undermine it for the second fourth time.

  • FY 2016: $548 billion (security) and $518.4 billion (non-security) an increase of $25 billion each in category above current law.
    • OCO: $58.8 billion (Defense) and $14.9 billion (non-defense)

How do you spend money in an “overseas contingency operations” account on “non-defense”? Sounds like Obama rolled Boehner to get off-budget increases in discretionary non-defense spending to me…

  • FY 2017: $551 billion (security) and $518.5 billion (non-security) an increase of $15 billion each in category above current law.
    • OCO: $58.8 billion (Defense) and $14.9 billion (non-defense)
  • Fully offsets the $80 billion increase above current law with mandatory spending cuts and additional savings

If you believe that, I’ve got a bridge to sell you… The entire premise of this deal is “these cuts aren’t the *right* cuts, so we’re going to push them off, but don’t worry, we’re making *better* cuts now.” Except – that’s what Ryan-Murray was! So if they couldn’t “fix” the cuts to be better 2 years ago, why should we trust them now?

  • No tax increases.

Grover Norquist’s success must be acknowledged, but this is really baseline stuff that Republican Congresses don’t raise taxes. However, I wonder if there aren’t some “fees” like the TSA tax Ryan-Murray gave us last time (spoiler: stay tuned!).

  • Reforms SSDI to close loopholes, increases work incentives, stops fraud, prevents a 20% cut to benefits.

Social Security Disability Insurance is a smaller program intended to help those who had worked or chronically cannot work. It has good intentions… which is why it has become a disaster through abuse, fraud, and, primarily, overuse. The most common reasons for applying – mental condition or back pain – are undetectable except through patient testimony. The program is set to run out of fake IOUs in 2017, at which point it would pay out only what it takes in (it derives its resources from a portion of your payroll tax – keep that in mind for later), which would equate to a 20% cut from the unsustainable checks it sends today.

Anytime Republicans use these half-measures to address chronically failing programs I must point out – if the problems were simply waste, fraud, abuse, and loopholes, wouldn’t we have fixed them by now!? The real problem is the nature of the program – paying people for not working and encouraging them to lie about being unhealthy.

  • Generates $168 billion in long-term savings to strengthen the solvency of the Disability Insurance Trust Fund.

The SSDI time-bomb (which we’ve known about forever, and which there have been substantive proposals on how to fix, most notably from former Senator Tom Coburn) is on its way to becoming the next “doc fix” – and just a few months after we put that charade to rest! More on that below.

  • Protects seniors from a 50% increase in Medicare Part B premiums and includes entitlement reforms to save taxpayers over $30 billion.

As just noted above, we did a doc fix – now there’s a patient fix too? Seems like the entire system is in need of fixing… instead we just slap on a new coat of paint and continue on like all’s well until the next election.

  • Repeals the ObamaCare auto-enrollment mandate.

Here’s a free lesson, if Obama is willing to sign it into law, you are not repealing significant portions of his signature law. When you repeal the paperwork burden (1099 repeal), or the CLASS Act, or defund CO-OPs, you’re not striking at the heart of the beast – you’re helping Obama trim the fat off his prime accomplishment in office.

  • Prevents default and suspends the limit on public debt through March 2017.

Oh, we’ve just wholesale bought into the “going past the debt ceiling = default” talking point? Noted.

Additional details Include:

  • $30 billion in savings from mandatory health programs, including extension of Medicare sequester.
  • Improved collection of delinquent debts owed to U.S. government.

Is it a tax increase when you put more resources into collecting taxes? Also, you’ve gotta love a country that pays for increased spending by resolving to enforce the tax laws already on the books.

  • Sale of excess capacity in Strategic Petroleum Reserve.

The SPR is an outdated Cold War relic that should be done away with wholesale. Everyone knows it, because Congress has taken to using it as a piggy bank in every bill that needs a few extra billion dollars. Just this Congress, the CURES Act in the House and the Senate’s Discount Highway Bill (“pay for 3 years, get 6!”) used funds from sales of oil to cover their costs.

  • Modest increase of $4 for PBGC premiums which strengthen solvency of PBGC.

Not a tax increase!

  • Improved criteria for use of most accurate mortality tables for measuring pension liabilities.

I like how this common sense improvement to an existing program isn’t put into place until Congressmen need it – i.e., when they want to use the “savings” to pay for things they truly want.

  • Extension of pension smoothing provisions to reflect interest rate history.

“Pension smoothing” is a punchline in conservative circles because it so obviously is a gimmick. And the term is too fun to say. Congress should smooth more things to increase current spending, seems like a great idea.

  • Inflationary updates to civil monetary penalties.

Increasing fines and penalties on hedge funds, big banks, and all the corporate baddies. Let’s call it No Justice Department Prosecutor Left Behind.

  • Improved fraud detection and increased penalties  for SSDI.

“So that we can keep paying out unsustainable benefits to current beneficiaries, we are going to *really* crack down on the bad apples in the current system. Which we are sure there are plenty of, or else this wouldn’t score as enough cash. But also, this is a noble and good program we must keep.”

  • Reauthorization and extension of promising work demonstration projects for SSDI recipients.
  • Amends the Federal Crop Insurance Act to require a new Standard Reinsurance Agreement to be renegotiated by the end of 2016 and every five years. Also, adjusts the cap on the overall rate of return to 8.9%.
  • Tighter criteria for use of qualified physicians in making SSDI eligibility determinations.
  • Reallocation of payroll tax revenue to SSDI trust fund to extend ability to pay SSDI benefits through 2022.

Ignore every other SSDI “fix,” “reform,” or “improvement” because here is the real answer – Congress wants to change the formula for payroll taxes to put more money into SSDI. This is the program with so many delinquents, cheats, and fraudulent beneficiaries, we must act now. It’s also the program so near the edge of solvency, it’s facing bankruptcy. So what is our solution? Take this giant pot of money we collect form every working American, and dedicate a few more percent to SSDI. This will be the new “doc fix” if fundamental parts of the program or the American populace do not change.

One big problem – that payroll tax money comes from somewhere. And that somewhere is Social Security. I can picture the Democrat attack ads against Carlos Curbelo, Elise Stefanik, Lee Zeldin, etc., “S/he voted to rob Social Security and threaten its solvency!” When the Social Security bankruptcy date moves into the 2020s (its currently set for 2034) you’ll know who to blame.

  • Extend authority for Spectrum auction from 2022 to 2025.
  • Improved tax compliance by streamlining rules for partnership audits.   Partners would not be subject to joint and several liability for any liability determined at the partnership level.

Spectrum sales are good, if clunky and horribly run. And attacking hedge fund guys to raise money for defense contractors seems like a useless exercise.

I hope this has shed some light on the turd sandwich that is the Bipartisan Budget deal, and I hope you do not accept any other argument from your Congressman than “it was the least worst thing, and I wanted Paul Ryan to have clear sailing for 14 months before the next election.”


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