Congress Watch: Numbers Don’t Lie, People (Politicians) Do

A couple weeks ago the House of Representatives passed the Baseline Reform Act.  It then proceeded to consider the budget resolution for fiscal year 2015 and illustrate precisely why enactment of the Baseline Reform Act is necessary.

Annual budget forecasts are guided by a series of assumptions set forth in the law.  One of the assumptions is that spending on discretionary programs automatically will increase by the amount of inflation from year to year.  This means that from the very beginning of the process, the federal budget assumes increased spending.  It also changes the language that Members of Congress use when discussing the budget.  Members take credit for spending “reductions” when budgets actually increase and opponents of lower spending claim programs are being cut or gutted even though their funding is actually increasing.  The Baseline Reform Act ends the assumption of increased spending and forces Congress to determine spending amounts on each program based on merit and need, not inflation.

When one listens to a budget debate, there is rarely clarity.  The exact same document either “cuts non-defense discretionary spending by $791 billion . . . slashes education funding” and “decimates the safety net programs” or, it actually “grows the federal budget by 3.5% annually.”  And, while it’s growing the budget by 3.5% annually, it is also cutting total funding by $5.1 trillion.  Confused yet?

Some of the confusion comes from the fact that each side is comparing apples to oranges.  A budget contains plenty of items that are going to make people happy.  It’s also going to contain an awful lot of things that will make people mad.  Budget opponents will emphasize the cuts that are apt to anger while supporters will counter with arguments that seek to soften the blow.  But, how can it be that the same budget resolution that increases total funding by 3.5% annually also cuts total funding by $5.1 trillion?

Only in Washington, through the magic of the budgeting process, is it possible to argue that increased funding is actually a spending cut.  The Congressional Budget Office (CBO) predicts, based on current policies and economic prognostication, that the Federal government will spend approximately $47.8 trillion over the next ten years.  That amounts to a 5.2% annual growth in federal spending.  The House-passed budget projects to spend a $42.6 trillion over the same time period, a mere 3.5% annual growth rate.

The fact is that a budget is a non-binding resolution without the force of law.  Generally, its only official use is to set the overall spending levels for the fiscal year it covers.  It also can provide a view of its supporters’ priorities.  For determining those two things it is a useful tool.  But, until the Baseline Reform Act becomes law, don’t take the numbers too seriously.  That Washington math can get confusing.