Tuesday, April 1, 2014

Some Things Never Change

You would be easily forgiven if you thought the fiscal year 2015 iteration of The Path To Prosperity, authored by Representative Paul Ryan, was an April Fool's joke. In an apparent attempt to add legitimacy to his budget outlook, Ryan asked the Congressional Budget Office to score it for him. The nonpartisan office did, but they also added a caveat to their report.

At the request of the Chairman of the House Budget Committee, Congressman Paul Ryan, CBO has projected budgetary and economic outcomes under paths for federal revenues and spending (excluding interest payments) specified by the Chairman. The projections do not represent a cost estimate for legislation or an analysis of the effects of any specific policies. In particular, CBO has not considered whether the specified paths are consistent with the policy proposals or budget numbers that Chairman Ryan released on April 1, 2014, as part of his proposed budget resolution. 
Chairman Ryan’s specified paths for revenues and spending would require major changes in current law. In particular, by 2040, noninterest spending would be roughly one-quarter less under those paths than under current law, and revenues would be roughly one-twentieth less; 
The amounts of federal debt and economic output estimated for all of the scenarios in this report are highly uncertain. That uncertainty stems from the difficulties inherent in projecting the effects of federal fiscal policies, especially far into the future.

In other words, Ryan told the CBO to use his numbers, which are closer to wishful thinking than reality.

I'm always interested in Ryan's budget plans mostly because I enjoy noting his deceptiveness.

For example, the very first page of his Path to Prosperity contains a graph displaying two futures. One has skyrocketing debt and the other, thanks to his "path", has decreasing debt.
It took me a bit but I finally figured out where he got this.

Ryan is using the extended alternative fiscal scenario, which includes the continuation of certain policies that have been in place for a number of years and the modification of some provisions of law that might be difficult to sustain for a long period, instead of using the extended baseline, which is based on the assumption that current law generally remains unchanged.

Had he used the extended baseline, then the projected debt would still rise but not nearly as much as the extended alternate fiscal scenario.
And you can see from the above chart, Ryan's made up numbers reflect a decrease in future debt.

Here's another example of his deceptiveness. He references another CBO report.

Meanwhile, the national debt has skyrocketed and continues to climb—well after the recession. In May 2013, the Congressional Budget Office (CBO) projected the federal government would add $6.3 trillion to the national debt from 2014 to 2023. But in February 2014—not even a year later—CBO revised its forecast to $7.3 trillion—a $1 trillion increase. It attributed most of the hike to a drop in revenue, the inevitable result of a lackluster economy. 

Here is what the CBO's report actually said:

The baseline budget outlook has worsened slightly since May 2013, when CBO last published its 10-year projections. 4 At that time, deficits projected under current law totaled $6.3 trillion for the 2014–2023 period, or about 3 percent of GDP. Deficits are now projected to be about $1 trillion larger. The bulk of that change occurred in CBO’s estimates of revenues... 

Just as he did last year and the year before, Paul Ryan plays fast and loose with numbers and charts.

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