Washington's Favorite Budget Gimmick

Looking for an extra trillion bucks in deficit reduction to round out your shiny, new budget plan, but don't actually want to make any real cuts? Look no further: A quirk in the way the Congressional Budget Office scores spending on the wars in Iraq and Afghanistan offers an easy trillion dollars or so in deficit scamming for any legislator who wants to claim it, just by changing the budgeting assumptions to reflect policies already in place. At this point, it's gunning for the title of Washington's Favorite Budget Gimmick.

Here's how the gimmick works: The CBO's scoring rules assume that war spending remains at a constant level growing with inflation—even in the midst of a troop drawdown. So deficit fakers can take advantage of this by instructing the CBO to account for an already-planned troop reduction.

It's a bipartisan, bicameral gimmick: The Republican budget passed in the House earlier this year used it to tout an extra $1.3 trillion in deficit savings, and Democrat-friendly budget geeks called them out for it. A debt deal plan released by the Democratic Majority Leader in the Senate over the summer did the same, and the AP called it a "glaring $1 trillion ploy."

And now President Obama, whose first budget director told The New York Times that "the president prefers to tell the truth rather than make the numbers look better by pretending," is following suit. The administration's package of debt-reduction recommendations claims $1.1 trillion in war-related deficit reduction. But as The Washington Post reported this morning, they're still fake. "Because Obama has no intention of continuing war spending at last year's elevated levels, that $1.1 trillion would never have been spent." Which means that the $4 trillion in deficit reduction the White House claims to have come up with is actually more like $3 trillion, of which half comes from tax hikes.