Late last night, just minutes from an impending government shutdown, congressional negotiators and President Obama reached a deal to fund the government for the rest of the fiscal year, cutting $38.5 billion under current funding levels, per Republican demands. House Speaker John Boehner (R-OH) and other Republicans hailed the deal as an important step to reining in the deficit. In a speech addressing the deal, Obama compared the compromise to the one he helped broker late last year on extending the Bush tax cuts for two years.
But a look at those two deals suggests Republicans are not as interested in cutting the deficit as they claim. In both cases, Democrats made big concessions on key Republican agenda items — tax and spending cuts — in the face of intransigent opposition from the GOP. But while the appropriations deal from last night cuts $38.5 billion in spending over the next six months (through the end of the fiscal year in September), the tax cut deal deprives the government of roughly $150 billion in revenue over a similar period of time.
Extending the Bush tax cuts “would result in a $200 billion to $300 billion cost to the US Treasury compared to what had been expected” in one year — or $100 to $150 billion in six months. So while they very nearly shut down the government to extract painful spending cuts, Republicans had already wiped out those spending cuts many times over with the revenue lost from extending the Bush tax cuts.