Deficit Flim Flam: Claim Cuts But Spend More

Much of the political-media establishment’s “information” about massive government deficits and fiscal cliff negotiations is deception made possible by the arcane budgeting process in Congress.  President Obama didn’t invent the process.  But he’s an enthusiastic practitioner of the deception. [continued below the chart]While most of the “news” bout fiscal cliff negotiations has been about tax increases, the real problem is uncontrolled spending.

Decoding political-media “information” about spending and deficits starts with understanding two key words in government budgeting:

  • baseline” and,
  • assumptions.”

The baseline is projected spending over the next ten years.  Baseline numbers result from a set of assumptions, starting with the assumption that almost every government department, agency and program will receive an automatic spending increase every year.  The size of those increases is based on additional assumptions.

Usually, when a President or Senator speaks of “deficit reduction,” he does not mean the deficit will be less in the future than it is today.  His precise meaning is that the 2 or 5 or 10 year deficit prediction on the latest pieces of paper from the White House and Congressional Budget Office (CBO) is less than on the previous pieces of paper.  Or, he means the amount a particular program will contribute to the deficit is predicted to be less on the new piece of paper.

Under President Obama we’ve heard lots of talk about “cuts” and “deficit reduction” but after adjusting for inflation his first term spending increases are the largest since mobilization for the Korean war in the early 1950s.  And regardless of claims to have “cut” spending way out in the future, his actual plan, in writing in his official budget, is for yet another record-breaking spending increase over the next four years.

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