Rep. James Clyburn, D-S.C., defended the idea of using war savings — money that current law indicates will be spent on Iraq and Afghanistan, over the next decade, that everyone knows will not be spent — as deficit reduction and applying that money to entitlements. Congress has been warned that such a budget gimmick could result in a credit rating downgrade for the United States.
Clyburn, who serves on the decifit reduction Supercommittee, denied that “counting money from wars that weren’t going to be fought” is a budget gimmick. “We believe and the CBO believes that there is around $917 billion to be saved over the next 10 years from the overseas contingency account,” he said during an appearance on Fox News Sunday.
He proposed that those war savings could fund entitlement and stimulus programs. “We ought to use that savings to plow it back in to fix Social Security, that will allow it to be sovereign for another 75 (ph) years, to plow it into job creation programs that would get people back to work, and paying taxes, and off of food stamps and off of unemployment,” Clyburn argued.
The “war-savings” proposal is possible because of the way the Congressional Budget Office estimates future government spending. “The way the CBO constructs the baseline is it extrapolates current law, and the current law is that we are funding the wars in Iraq and Afghanistan,” former CBO Director Douglas Holtz-Eakin explained earlier this year. “The trouble is that CBO’s baseline is not what anyone really thinks will happen.”
He added that the gimmick wouldn’t “be compelling to markets or ratings agencies,” and explained that “since this spending was going to go away anyway, it would not constitute an improvement.”
