Obama Budget Proves Unique With No Other Source for $3 Trillion

Sunday, 12 Feb 2012 11:01 PM

 

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President Barack Obama’s budget today will outline his ideas for how the government may spend more than $3 trillion in the next fiscal year, starting Oct. 1. There’s no similar document accounting for where taxpayers’ money actually goes.

At least three federal sources tally spending, each following its own rules to produce a different total. For the 15 Cabinet-level agencies and Social Security, the White House Office of Management and Budget put expenses at $3.18 trillion in fiscal 2010, the last year for which data are complete. Ask the Census Bureau, and the amount rises by $13.1 billion to $3.19 trillion. USASpending.gov, a website Obama championed as a senator, accounts for $2.23 trillion of spending.

The nation’s budget has more than doubled in the past decade, pushing the annual deficit to more than $1 trillion and the national debt to $15.2 trillion. Spending dominates the political agenda, with at least three presidential candidates advocating the elimination of entire Cabinet agencies, while billionaires and street protesters debate raising taxes on the wealthy. Yet government institutions that track expenses differ in their estimates by billions of dollars, making the budget process less transparent to taxpayers.

‘Bad Spending Decisions’

“If the public can’t easily find and understand quality spending information, they can’t use that information to make their opinions heard by Congress,” said Sam Rosen-Amy, a federal fiscal policy analyst at the Washington-based nonprofit research group OMB Watch, in an e-mail. “Since insiders are the only ones who know what’s going on, Congress ends up listening to them, and our representatives make bad spending decisions.”

So how much does the U.S. spend? It depends on where you look.

Consider the Department of Health and Human Services, which spends more than any other government agency and pays for the health care of one in four Americans through the Medicare and Medicaid programs for the elderly, poor and disabled. In fiscal 2010, HHS paid out either $854 billion, according to the OMB, or $944 billion, according to the Census. The $90 billion difference is almost half the value of Johnson & Johnson, the world’s biggest supplier of health-care products by market capitalization.

Analyzing Spending Accounts

“To Washington, these are rounding errors,” said Pete Sepp, executive director of the Alexandria, Virginia-based National Taxpayers Union, in a telephone interview. “To the rest of America, this is real money that could help real people with real problems.”

Bloomberg examined publicly available spending accounts from the Census Bureau, the White House’s OMB and USASpending.gov. The first contained 4.3 million records in the Consolidated Federal Funds Report, an annual Census survey of government spending since 1993. The White House Public Budget Database compiles estimated federal spending in 4,800 separate accounts dating back to 1962.

USASpending.gov, operated by the White House budget office, includes outlays via federal grants and direct payments, as well as details on the almost 1 million contracts the government awards each year.

One reason for the discrepancies is that the White House database accounts for foreign and domestic spending, while the Census limits its analysis to payments in the U.S. and its territories. The institutions also account for funding transfers between agencies differently.

Accounting Challenges

For example, HHS spends about $500 million a year running health programs for employees of other government agencies, according to Bill Hall, a Health and Human Services spokesman. The other departments then reimburse HHS for the costs. The White House budget office does a better job of accounting for these inter-agency transfers, Hall said in an e-mail.

Labor Department figures pose a different set of accounting challenges. Labor administers federal unemployment programs, and its spending surged in fiscal 2009 and 2010 to the fourth- highest in the government, behind HHS, Social Security and Defense.

A February 2009 Labor Department document shows the Obama administration requesting $13.3 billion from Congress for fiscal 2010. What the three-page “funding highlights” proposal doesn’t say is that an additional $91.2 billion in spending was required by law for programs such as unemployment insurance.

By the Numbers

Congress set the department’s spending authority at $178.4 billion, and actual spending that year totaled $172.2 billion, according to Geoff Kenyon, director of Labor’s budget center. The Census report showed the agency spending $91.9 billion, in part because Labor didn’t fully report the cost of unemployment benefits to the bureau, Kenyon said.

USASpending.gov accounts for no more than $14 billion in Labor Department spending that year, a figure Kenyon said he couldn’t explain. The site was developed to comply with the 2006 Federal Funding Accountability and Transparency Act sponsored by Obama, then a Democratic senator from Illinois, and Oklahoma Republican Senator Tom Coburn.

Some federal spending on contracts, salaries and awards of less than $25,000 isn’t captured by the site, said Moira Mack, a spokeswoman for OMB. The office is still adding information to USASpending, she said.

The president’s budget proposal is the starting point for a plan that is ultimately set by Congress. More than half of spending is dictated by existing law or is required interest payments on government debt, according to the Congressional Budget Office.

Discretionary Spending

Social Security and Medicare, which provide income and health benefits to the elderly and the disabled, are examples of fixed, or mandatory, spending programs that account for hundreds of billions of dollars that can’t be cut without legislation.

The actual amount on the table during the congressional appropriations process is known as discretionary spending, which agencies request for programs. Examples include Pentagon weapons systems and most federal assistance to schools.

Congress typically disputes less than 10 percent of the discretionary requests in the president’s budget, according to Washington-based Taxpayers for Common Sense, which promotes government transparency and advocates more efficient spending.

“Congress doesn’t have the resources or the time to do much more than tweak the margins,” said Steve Ellis, vice president of the group. “Of course, when you’re talking about a trillion-dollar discretionary budget, the margins are still potentially in the tens of billions of dollars.”

No Definite Way

From fiscal 2000 through fiscal 2010, federal spending totaled $24.6 trillion for Cabinet-level departments and Social Security, according to the White House’s OMB. The Census Bureau put the amount at $24.98 trillion.

The Washington-based Sunlight Foundation has compiled annual reports on the OMB’s USASpending.gov website for the past three years. For fiscal 2010, it found that information related to 95 percent, or $1.31 trillion, of government grant obligations was incomplete, based on a review of 18 required data points.

Obama signed an executive order in June creating the Government Accountability and Transparency Board to implement guidelines for collecting and displaying spending data. In December, the board recommended creating an independent panel as well as a single framework for presenting information.

Representative Darrell Issa, a California Republican, and Senator Mark Warner, a Virginia Democrat, have their own ideas, laid out in the proposed Digital Accountability and Transparency Act. It would create an oversight board and a new website for disseminating federal spending data. The Congressional Budget Office in September estimated their plan would cost $575 million over five years.

Meanwhile, the Census Bureau is discontinuing its annual spending report to save $700,000, said Robert Bernstein, an agency spokesman, in an e-mail. The government maintains at least 14 websites dedicated to different segments of federal spending, and none provide a definitive way to track cash flows.

“It all depends on where you’re sitting, who you’re talking to, and when you’re talking to them,” said the Taxpayers Union’s Sepp.

 

© Copyright 2014 Bloomberg News. All rights reserved.

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