You’ve probably heard by now that President Obama and House Speaker Boehner have agreed on a plan that will allow an increase in the debt ceiling. We’re being told that the agreement is a great achievement. One news report, for example, says:

The White House and congressional leaders worked Monday to align lawmakers from both parties behind their formula for averting a financial meltdown and halting the government’s prolific spending habits.

President Obama said in a tweet: “The debt agreement makes a significant down payment to reduce the deficit– finding savings in both defense and domestic spending.”

Senator Reid’s comment sums up the agreement very well, at least in terms of how members of Congress view the plan: “People on the right are upset, people on the left are upset, people in the middle are upset. It was a compromise.”

The American people should be disgusted.

Understand that in the discussion below, the figures are projected decrease in deficit over 10 years.

The full agreement is H.R. 2693 — Budget Control Act of 2011, but you likely won’t be able to get much in the way of useful information from that. The relevant portions of the bill include absolute spending limits for different programs. There’s no comparison of previous figures. In order to estimate savings, you need to know what they’re comparing against.

The Congressional Budget Office did the comparisons against the March 2011 “baseline” figures and came up with a savings estimate. The overview of their analysis projects:

• $912 billion reduction based on explicit spending limits outlined in the bill.
• Up to $1.5 trillion reduction to be determined later by a bipartisan committee.
• $1.2 trillion “automatic” reduction if the committee doesn’t come to an agreement.
• Total of at least $2.1 trillion reduction, and potentially up to $2.4 trillion.

Before you celebrate, you should read the full report from the CBO.

If appropriations in the next 10 years are equal to the caps on discretionary spending and the maximum amount of funding is provided for the program integrity initiatives, CBO estimates that the legislation–apart from the provisions related to the joint select committee–would reduce budget deficits by $917 billion between 2012 and 2021. In addition, legislation originating with the joint select committee, or the automatic reductions in spending that would occur in the absence of such legislation, would reduce deficits by at least $1.2 trillion over the 10-year period. Therefore, the deficit reduction stemming from this legislation would total at least $2.1 trillion over the 2012-2021 period.

In other words, if nothing changes between now and then, we can expect the total amount that government overspends in the next 10 years to reduce from $15 trillion to $12.9 trillion.

This is what the President calls “a significant down payment to reduce the deficit?” I want some of what he’s smoking.

It’s interesting to note that the majority of the $912 billion is achieved by limiting discretionary spending. There’s some reduction in Pell grants and farm programs, and a few other things. However, discretionary spending (including the Department of Defense) makes up only about forty percent of the entire annual budget. If you eliminate all discretionary spending, we’d still run a deficit. And yet there is no discussion of reduction in non-discretionary programs. It’s possible we’ll see some of that from the “joint select committee,” but I wouldn’t hold my breath.

Whereas it’s very likely that this agreement will pass in the Senate, there’s still some question in the House. I suspect that it will pass, over some very vocal objections by members on all sides who have to look good for their constituents. And all sides will declare “victory.”

So Congress has spent two or three months wrangling over an agreement that reduces deficits by at best 15 percent over the next 10 years. They have not done a thing to address the cause of government overspending, nor have they provided anything like a realistic framework for doing so. But that won’t stop either side from claiming victory over the other.

Perhaps the strangest part of the whole thing is that President Obama is being hailed by some as “fiscally conservative.” It boggles the mind.

Oh, and the new debt ceiling? $16,994,000,000,000.