The truth about budgets: Washington vs. Reality
In November, Tea Party Patriots pointed out the dishonest rhetoric in Washington regarding “revenue-neutral” tax reform, and the two different ways tax policy is analyzed. Last week, one of the leading proponents of fiscal responsibility in Washington explained the dishonest rhetoric regarding budgeting.
Bill Beach is the Director of the Center for Data Analysis at The Heritage Foundation. He and Tea Party Patriots National Coordinator Jenny Beth Martin participated in a dynamic roundtable on the economy and national debt earlier this year. This week he appeared on Fox News to discuss the federal budget. Here is what Beach had to say about the way Washington handles budgets, at 3:05 in this video clip and the transcript below.
BILL BEACH, HERITAGE FOUNDATION: Baseline budgeting, just to kind of define it first before we get into the falsehoods that are based in there, is the building of a projection of spending based on what you are currently doing. So I’m currently building a house. I could — under baseline budgeting, I could budget the same amount for building that house for each year of the next 10 years. That would be baseline budgeting. People say that’s crazy. You build your house one year. That’s it, not every year thereafter. What this does is it permanently builds in higher spending.
Beach is exactly right. As Senator Rand Paul (R-KY) and Rep. Louie Gohmert (R-TX) explained at the Tea Party Patriots Local Coordinator Conference in November, every American family and business uses zero-based budgeting. This means every year families and businesses start over with their budgets, then calculate spending on what the current year’s income looks like.
In Washington, the federal government looks at spending exactly how Beach spelled it out – by assuming this year’s spending will happen again next year, plus more. This is how Republicans and Democrats alike “cut” spending while increasing overall money spent. They cut from expected growth, not what was actually spent in any given year.
Let’s look at a recent example of how baseline budgeting works. In 2009, the New York Times published an editorial saying President Obama’s stimulus “is timely, targeted and temporary — the pillars of a sound stimulus package.” Note the key word – temporary.
Due to this and other “temporary” spending, the federal budget increased over $80 billion between 2009 and 2011, according to the Office of Management and Budget (OMB). The 2012 budget is estimated to have been nearly $280 billion larger than the 2009 budget, without accounting for inflation.
Given its support for “temporary” increases in spending, one would expect the Times to call for a return to lower spending. Instead, in a June 2012 editorial, the Times said this about sequestration:
At the same time, deep across-the-board budget cuts from last year’s debt-ceiling deal will begin to take effect in 2013…
What a difference three years makes – In 2009 The Times praised “temporary” stimulus spending. Now that stimulus spending has increased the federal budget, cutting below stimulus spending levels means making “deep…budget cuts.”
Fellow Patriots, Beach has spelled out exactly what’s wrong with Washington and its allies in the media Let’s join him in explaining this to America, as part of the necessary task of righting our fiscal ship before it reaches the real cliff.
-Full Disclosure: Dustin Siggins has worked at the Center for Data Analysis under Bill Beach.