Yesterday, CBO released an extrapolation of the Final FY 2011 Continuing Resolution, which has been interpreted to mean that the final CR actually increased spending. This is false; claiming the CR "increased" spending relies on the assumption that outlays are the proper understanding of government spending – however, funding bills are articulated in terms of Budget Authority, which govern account baselines. Cutting an outlay means preventing a dollar from being spent at some point; cutting Budget Authority decreases the ability to spend that dollar forever. This is an important distinction that we fully fleshed out here.
Cuts in Budget Authority now, then, result in hundreds of billions in savings for taxpayers over ten years. The recent estimate from CBO insinutates that the final deal cuts less over the long term than what was originally promoted by its proponents. However, the projection only takes into account the final deal – it does not incorporate the temporary spending cuts netted in the previous short-term CRs that had governed spending levels for the first half of the fiscal year. Since those had run out by the time the final deal was passed, the accounts that had been cut for the preceeding weeks could have been refunded in the final bill. They were not, and thus should be counted against baselines in the ten year window for an accurate picture of what the full-year funding bill did.
CBO's intent was to analyze the final funding bill, not the entire universe of spending. In doing so, it may have clouded the rearview on the FY11 funding debate, but did not rewrite the history. For a full review of the funding battle, check out our post here.