No Trillions in Boehner or Reid Bill: Baseline Budgeting Busting Faux Budgets

No’ Trillions’ in the lastest Boehner bill. Rich Lowry at The Corner says according to the latest CBO report, the revision has cuts of $22 Billion in fiscal year 2012 “from the adjusted CBO baseline,” and $42 Billion in fiscal year 2012, with a total of $917 Billion over ten years. The plan calls for a $900 Billion  increase in the debt ceiling, preserving the $1.00 cut for every $1.00 spent idea. The debt ceiling will go from $14.3 Trillion to $15.2 Trillion. Apparently it will take us only to April to spend the $900 Billion when the next round begins. Take a look below at the details of government baseline budgeting, which the CBO has apparently taken into consideration as they score.

Robbing Liberty

Allapundit at Hot Air:

Reid’s bill would produce $30 billion in savings this year, but guess where that comes from. Right: The phantom “savings” from winding down in Iraq and Afghanistan. Which, contra Levin, reminds us that it’s not that hard to beat those CBO baselines with a creative gimmick or two.

As of early evening, another member of the Cut, Cap, and Balance coalition has peeled off to join Allen West in supporting Boehner’s bill. And Darrell Issa, on a conference call with bloggers, thinks they have the votes — sort of. Exit quotation: “I don’t think all the people whose votes we have yet know it.”

Rush Limbaugh has the details of ‘baseline budgeting,’ and I bet most of us didn’t realize this is going on:

When you put together your budget, if you do one, you take last year’s spending and income and you take a look at it and you figure out if you spent more than you had, or if you didn’t spend more than you had, what did you do with what you had left over, where did it get spent.

If the next budget you prepare has to be smaller because your income’s dropped, you start going through items, figuring out where you’re going to cut. Your baseline is reality. Your baseline every year is reality. Your baseline is the amount of money you have to start with.

That is not how it works in Washington. Baseline budgeting is based on the presumption that every item in the budget will automatically increase between three and 10% depending on what the item is, every year, regardless what happened in the previous year.

This is why, for example, at the end of the year the agriculture department starts advertising for food stamp applicants because they want their budget to increase. So they don’t look at the reality, and say, “You know what, we don’t need this much money in this department. We have more money than we need. We don’t have as many people needing food stamps as we have food stamps.” They don’t look at it and then cut back and tell the government, “You know what, you can cut us here.” They will go out and give away food stamps in order to make sure they get that three to 10% increase. But that three to 10% increase every year becomes the starting point for every budget negotiation.

So, for example, when Obama passes the stimulus bill, another trillion dollars effectively is added to the baseline. No consideration is given to whether or not the money was spent wisely, wasted effectively or whatever. It was just spent. And because it was spent, there must be an increase in that line item every year.

The way this manifests itself in Washington, the best way I have ever found to illustrate this is to put yourself in the situation where you’re going to go buy a new car. You’ve looked at your budget, and you have decided that you can afford the monthly payment on a $40,000 car. So you go to the showrooms or you go to the Internet or you go wherever you look to buy a car, and you find a car you really love for $70,000 that the dealer tells you is on sale, that you can get it for 60. So you and the family discuss it, and if you’re like Washington, what you do is you tell yourself, “You know what?  Let’s get that $70,000 car that only costs 60, and we will save ourselves $10,000.”  But you haven’t.  You have spent $20,000 more than you originally allocated.


Cartoon courtesy of the Orange County Register

  • Ran

    Bust the Baseline! I’ll be explaining this one to my kids. Thanks Maggie!