Politics

All the President's Budget Gimmicks

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Not one penny!

The Committee for a Responsible Federal Budget explains the Obama administration's latest budgeting gimmick:

Traditionally, proposed policy changes are measured from what is called a "current law" baseline. This baseline essentially looks at the law, the way it is written, and attempts to project tax and spending paths over the next decade. Budget scorers then measure the magnitude of policy changes by estimating how far they will cause taxes and/or spending (and deficits) to diverge from that baseline.

The Administration has argued, though, that this current law baseline is unfair. It assumes all the Bush tax cuts will suddenly expire at the end of 2010—even though this would result in significantly higher taxes in 2011; it assumes policy makers won't prevent the Alternative Minimum Tax (AMT) from hitting middle-class tax payers—even though they have been for years; and it assumes that, a month from now, Medicare will pay physicians 21 percent less than it does now—even though no politician would let this happen.

Because of this, the Administration says it should be able to measure its policies off of a "current policy" baseline. We disagree; if President Obama wants to extend the Bush tax cuts—the same ones which he criticized the Bush Administration for not paying for—he should have to offset them, or else fess up to using them to increase our debt.

In essence, the White House is saying that because it is widely assumed (though not technically required) that certain prior-administration policies will continue, the Obama administration should not have to account for the budgeting effects of choosing to continue these policies. So they incorporate those policies into their baseline—their assumption about the budgetary outlook should no changes be made—and in doing so, make their deviations from the baseline seem much smaller. Suddenly, the Obama administration can claim to have caused a much smaller increase in the deficit. It's an implicit shift of blame onto the prior administration.

Now, the Bush administration clearly deserves a significant amount of blame for the country's dire fiscal prospects, but at this point, blaming Bush doesn't fix any problems. Tricks like this are not just meant to produce more favorable projections and press, they are meant to avoid responsibility—and thus avoid having to make tough decisions about how to solve difficult fiscal problems.