Republican House Speaker John Boehner says the White House is exaggerating the spending cuts achieved in its latest “fiscal cliff” offer by including the lower interest payments on the national debt that would result from the cuts.
He might want to talk to…House Speaker John Boehner, circa June 2009.
That’s when Boehner condemned the price tag on President Barack Obama’s economic stimulus package, pointing to the added cost to the government of paying interest on the money borrowed to fund the package.
Democrats in Congress pushed through the stimulus plan in 2009 with an estimated cost of about $800 billion. House Republicans unanimously opposed the plan, and Boehner said its true cost was much higher because of interest payments.
“If you think about where we’ve been this year, we had the nearly trillion-dollar stimulus plan, when you look at the interest that’s going to be paid on it,” he said in a June 17, 2009, floor speech.
Boehner could also have a chat with House Budget Committee Chairman Paul Ryan, who attacked the stimulus plan on the same grounds. Ryan argued that the interest that would have incurred on billions borrowed to pay for the stimulus should count in the overall cost of the measure.
“We are about to vote on a trillion-dollar spending package,” Ryan warned in a January 27, 2009, speech. “Yes, a trillion dollars, because the Congressional Budget Office just told us today (that) just to pay for the interest on this bill is another $350 billion.”
So why don’t Congressional Republicans apply the same rule to Obama’s fiscal cliff offer?
“Interest savings from higher taxes is not a spending cut,” Boehner spokesman Brendan Buck said by email. “I wish the folks at the White House would work as hard to actually cut spending as they do trying [to] look like they are.”
It’s not an idle inside-the-Beltway debate. Obama counts the interest costs on the way to claiming that his latest offer to Boehner includes $1.22 trillion in spending cuts–roughly in line with the president’s proposed $1.2 trillion in new tax revenues.
But Buck said in a statement late Monday that the president was really only offering $930 billion in spending cuts. And Boehner cited similar numbers on Tuesday to argue that the president was breaking his promise to provide a “balanced” proposal.
If the two sides can’t find a way to narrow their disagreements, Americans will face across-the-board income tax hikes and deep government spending cuts that, taken together, could plunge the fragile economy into a new recession.
It's also not ancient history. In the photograph above, Boehner is using a chart to highlight the dangers of unchecked spending. That model counts interest payments as spending.