Right Thinking From The Left Coast
Do, or do not. There is no 'try'. - Yoda

Wednesday, April 13, 2011

How Budget Cuts Tally

Hmm.  Looks like the media has discovered baseline budgeting:

A close look at the government shutdown-dodging agreement to cut federal spending by $38 billion reveals that lawmakers significantly eased the fiscal pain by pruning money left over from previous years, using accounting sleight of hand and going after programs President Barack Obama had targeted anyway.

You should really read the whole thing.  For example, the cuts include not extending a 1-year $350 million dairy price support program from FY2009.  In another instance, simply capping a fund allows the entire thing to be counted as saving.  They estimate the amount of real cuts is closer to $14 billion than $40 billion.

This is not exactly surprising.  Congress has used spending gimmicks like this for decades to weasel out of budgetary restrictions.  And it is worth pointing out that Pelosi’s Congress would almost certainly have spent these funds, one-year programs or no.

In the end, however, all of this amounts to pennies on the dollar.  The real money is in defense, entitlements and taxes (and with the latter, only over the broad base, not just on “the rich").  Cutting the last one would be reckless in the middle of a fiscal year.  Cutting the second requires statutory changes.  And raising taxes shouldn’t happen without big spending cuts and a massive overhaul of the tax system that results in a net decrease in deadweight loss on the economy.

As I said, the real fight is for FY2012.

Posted by Hal_10000 on 04/13/11 at 10:49 AM in Politics   Law, & Economics  • (0) TrackbacksPermalink
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