Simpson-Bowles Redux

A blog about business and economics.
Feb. 19 2013 2:31 PM

Simpson-Bowles Redux—Watch The Scoring Window

With thanks to Marc Goldwein of the Committee for a Responsible Federal Budget for talking it over with me, I think my explanation of how the new Simpson-Bowles plan shifts the goalposts missed something important that's also missing from most of the discussions I'm seeing out there of how Simpson-Bowles II differs from Simpson-Bowles I. The key issue is scoring windows.

Simpson-Bowles I was a plan for deficit reduction within a 2011-2020 budget window, with the first two years largely exempted from cuts. Simpson-Bowles II is a plan for the 2014-2023 budget window without the two-year delay. For a number of reasons, the exact same policy changes produce "larger" cuts when applied to the new window. One trivial reason is that, thanks to inflation, the 2021, 2022, and 2023 dollar figures are bigger. Another is that the policy changes are phased in over time so the savings are bigger later in the timeline. A third is that Medicare (and also some other programs) are on an accelerating spending trajectory in the baseline case, so deflecting them to a new, lower trajectory creates larger savings later. These factors change both the volume and the composition of spending. In other words, the exact same policy idea as applied to 2014-2023 will create a different budget score than if you apply it to 2011-2020. The goalposts shift because you're quite literally considering a different period in time.

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Goldwein does not accept this characterization, but I think it underscores the extent to which the debate here is really about spending on the elderly rather than "the deficit" as such. Right now the government has made an open-ended commitment to cover old people's health care bills, and that's a commitment that's projected to grow steadily more costly over time. The core of the policy debate in American budget politics is about what to do about that. The rest is largely competing political theories about timing and bargaining.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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