Why conservatives don't want to trade tax hikes for promised spending cuts 

In the latest salvo in their campaign to portray Republicans as extremists for not wanting to accept tax increases as part of a budget deal, liberal bloggers led by Ezra Klein have been promoting a chart showing that in the past, the GOP has been willing to accept deals that are far less generous than what President Obama is supposedly offering them. Yet as Conn Carroll pointed out earlier, there’s a big difference between budget deals as negotiated, and budget deals as implemented. The reason why today’s conservatives are much less tolerant of deals that include tax hikes is that they’ve learned from history that the reality of such agreements is that taxes go up as negotiated, but Congress doesn’t deliver the promised spending cuts. No past deal poisoned the well more than the 1990 budget pact, in which President Bush infamously broke his “no new taxes” pledge.

Jonathan Chait attempted to argue that spending did go down as a result of the 1990 deal, but he cites spending as a percentage of GDP. While that number declined as the economy moved out of a recession and the GDP component of that calculation rose, that’s not the same thing as actual spending going down. So I went back and looked at archived reports from the Congressional Budget Office to address a simple question: how did the spending projections the CBO made after the deal compare with the actual spending once implemented? As the chart below shows, by 1995, the end of the five-year budget window that the CBO was then using, actual spending was $58 billion higher than projected by the CBO at the time of the deal. (See Table 1 in the CBO’s December 1990 report, “The 1990 Budget Agreement: an Interim Assessment.”)



Yet the deal was far worse for conservatives than this one chart would suggest. When I broke down the numbers further, I found that the spending cuts that did occur were to defense spending, at a unique time in history where we were downsizing the military in the wake of the Cold War. Cumulatively, defense spending for 1991 through 1995 was $170 billion lower than projected by the CBO in its July 1990, pre-deal, baseline. By contrast, non-defense spending (both discretionary and mandatory), was $91 billion higher than the CBO was projecting before any deal had been reached.

Back in 1990, the establishment was saying the same things about the need for a “balanced approach” in which all sides sacrifice something to reduce the deficit. Yet what we ended up with in reality was a deal that raised taxes and slashed military spending (in other words, the liberal approach) while entitlements and non-defense discretionary spending rose by an even higher amount than was projected before a deal. Is it any wonder that today’s conservatives are deeply suspicious of budget deals in which Republicans agree to raise taxes in exchange for promised spending cuts?

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