Your Opinion: Baseline budgeting sleight-of-hand
Wednesday, December 26, 2012
Does anyone know what baseline budgeting is all about? It was enacted by congress in 1974. Baseline budgeting is an accounting method the United States Federal Government uses to develop a budget for future years.
Baseline budgeting uses current spending levels as the baseline for establishing future funding requirements and assumes future budgets will equal the current budget times the inflation rate times the population growth rate. Twice a year, generally in January and August, Congressional Budget Office (CBO) prepares baseline projections of federal revenues, outlays, and the surplus or deficit.
Those projections are designed to show what would happen if current budgetary policies were continued as is that is, they serve as a benchmark for assessing possible changes in policy. They are not forecasts of actual budget outcomes, since the Congress will undoubtedly enact legislation that will change revenues and outlays. Similarly, they are not intended to represent the appropriate or desirable levels of federal taxes and spending. Currently the annual increase is automatically set at approximately 7 percent each year.
When we hear politicians talking about increasing or decreasing spending, are they talking about absolute values or are they talking about increasing or decreasing from the automatic 7 percent increase each and every year regardless of the economy? If you said that they are talking about from the 7 percent automatic increase, you would be correct.
So, when a politician says that there is a cut of 3 percent in the budget what they are really saying is that the real increase is going to be 4 percent rather than 7 percent. Federal government spending still goes up, just not as fast. They are trying to pull the wool over our eyes.
This allows the Republicans to say that they are cutting the federal budget while the Democrats can say they are increasing funding for their pet programs. You and I continue to see actual spending by the federal government increasing. The federal government continues to get bigger and bigger. Each political party has a hand in this sleight-of-hand that continues to drive our country into the ditch. There are very few of our representatives in Washington that come clean with us voters.
When they try, they don’t get much press as the mainstream media doesn’t completely report on this issue. Meanwhile we continue whistling past the grave yard.
We need real budget cuts not fake ones.
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