Congress Warned of Credit ‘Downgrade’ if War Savings Counted as Deficit Reduction
Published July 25, 2011
FoxNews.com
AP
U.S. soldiers walk to board a U.S. military plane, as they leave Afghanistan at the U.S. base in Bagram on July 14.
Senate Democrats’ inclusion in their proposed debt package of $1 trillion in savings from the wars in Iraq and Afghanistan may not satisfy ratings agencies threatening a credit downgrade since the wars were expected to end with or without a debt deal.
The budget gimmick is one that has been used by both parties. President Obama and House Speaker John Boehner had earlier considered employing it during discussions that have since broken down. Now Senate Democratic Leader Harry Reid is using the trick in his $2.7 trillion deficit-reduction plan, according to aides. Boehner has not indicated where he would draw his savings, totaling up to $3 trillion.
To put the numbers in perspective, the Congressional Budget Office estimated earlier this year that U.S. budget deficits would total $7 trillion over the coming decade.
But to reach $1 trillion in war costs, budget scorekeepers simply look at current funding for the wars and spread that out over 10 years, rather than projecting what is going to happen in the future.
“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 told FoxNews.com. “The trouble is that CBO’s baseline is not what anyone really thinks will happen.”
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