Remember that fiscal cliff problem we solved back on New Year’s Eve? Guess what: It’s not over. Prepare for more drama as the dreaded “sequester” hits an agency near you on March 1.
Whatever happens, I can predict with 100 percent confidence that government spending will not go down. Washington follows a different dictionary for budgetary matters. To you and me, a “spending cut” means we spend fewer dollars than we did before. If your milk budget was $1,000 last year and you cut it by 10 percent, you have $900 to spend on milk this year.
Government budget match is not so simple. One of their favorite tricks is the “baseline.” It goes something like this. Last year you spent $1,000 on milk. You also anticipate higher milk demand due to your Oreo surplus. So you planned to spend $1,200 on milk this year.
Your banker complains you are a milk addict, so you agree to reduce your milk spending. Instead of $1,200, you’ll only spend $1,100. You then pat yourself on the back for being so disciplined.
Now what actually happened? You’re spending 10 percent more on milk than you did last year. But, had you followed the original plan it would have been 20 percent. So you’re spending 10 percent less for milk. See how frugal you are?
Another dodge is the “10-year projection.” You expect total milk spending of $15,000 over the next 10 years: $1,000 in years one through nine, and then $6,000 in year 10 — but you don’t mention that part.
What you do is change the last year from $6,000 to $1,000. Presto: You’ve “slashed” spending by one-third to only $10,000! But in reality you’re spending no less than last year.
So when people talk about savage cuts to their favorite government program, demand dollar amounts. How many dollars did the agency spend last fiscal year? And how many dollars will it spend next year?
You will probably get blank stares. Spending growth is baked into the cake, and no one in either party intends to change it. At best, they shift money from one part of the budget to another.
This is why we have a spending problem. Honest numbers would be a good start to solving it. Don’t hold your breath.
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