O's New Budget

Obama Budget Boosts Spending More Than $1 Trillion, CBO Says

INVESTOR'S BUSINESS DAILY

Federal Spending: If you want to know why Washington can't get spending under control, this week provided a prime example, when the Congressional Budget Office said President Obama's "budget-cutting" plan would actually boost spending $1 trillion.

When Obama released his budget last month, he said the spending cuts contained in it would "generate approximately $1 trillion in
deficit reduction over the next decade."

"Every department will feel the impact of these reductions," he said, "as they cut programs or tighten their belts."
But this week, the Congressional Budget Office released its analysis of Obama's budget.

And lo and behold, rather than cut spending by $1 trillion over the next decade, the CBO says it would increase it by more than $1 trillion.

So just what explains this shift of more than $2 trillion? Welcome to the world of "baseline budgeting."

You see, Obama simply assumed that spending would go up faster if the government were left on autopilot. Then he lowered the spending levels a bit in his budget and — voila! — he's cutting spending.

The Congressional Budget Office, however, uses a more conservative baseline projection.

So whereas Obama said baseline spending would total $47 trillion over the next decade, the CBO said it would be $44.3 trillion.
If you ignore the baseline and just look at the spending levels, what Obama is proposing is obvious — more spending, year after year.

We and others have exposed this baseline budget sleight of hand many times, yet politicians — on both sides of the aisle — continue to use it. The temptation is no doubt tough to resist.

After all, Democrats can use baseline budgeting to make their spending proposals look smaller and to exaggerate the size of any proposed spending cuts.

At the same time, Republicans use baseline budgets to burnish their image as fiscal hawks.

When Republicans took over control of the House last year, for example, the GOP passed a bill that, they said, would cut spending by $38 billion over the remainder of the 2011 budget year.
After it passed, the Congressional Budget Office released a report saying that the bill wouldn't cut spending at all. In fact, the opposite.

"Total discretionary outlays in 2011 will be $3.2 billion higher as a result of the legislation," the CBO said.
Likewise, President Bush each year issued budgets containing "deep" spending cuts that, when you looked at the actual numbers, simply didn't exist.

Nevertheless, Democrats bemoaned the inhumanity of it all, and the press dutifully reported that Bush was taking a meat ax to the budget.

The deal Republicans hammered out last summer with a recalcitrant Obama suffers the same problem. It's supposed to cut spending more than $2 trillion over 10 years.
But you will look in vain to find any spending cuts. Each year, federal outlays climb to the point where the budget in 2022 will be 52% bigger than it is this year.

And keep in mind that this year's budget is itself massively bloated — 22% higher than in 2008.
If you want to see what real spending cuts look like, check out the budget plan put together by Sens. Rand Paul, Mike Lee and Jim DeMint. It would slash federal spending — in the real sense — by more than $400 billion next year, eliminate four agencies and balance the budget by 2017.

But as long as reporters keep falling for the baseline budget magic trick, politicians will go on claiming to cut spending while the country falls deeper and deeper into the fiscal abyss.