Smoke and Mirrors
| Fri Feb. 20, 2009 11:24 AM PST
No more smoke and mirrors for the Obama administration!
For his first annual budget next week, President Obama has banned four accounting gimmicks that President George W. Bush used to make deficit projections look smaller. The price of more honest bookkeeping: A budget that is $2.7 trillion deeper in the red over the next decade than it would otherwise appear, according to administration officials.
The new accounting involves spending on the wars in Iraq and Afghanistan, Medicare reimbursements to physicians and the cost of disaster responses. But the biggest adjustment will deal with revenues from the alternative minimum tax, a parallel tax system enacted in 1969 to prevent the wealthy from using tax shelters to avoid paying any income tax.....“The president prefers to tell the truth,” said [Peter R. Orszag, director of the Office of Management and Budget], “rather than make the numbers look better by pretending.”
This is good. Seriously. It really is. The cynical among us, however, might note that highballing the current deficit also makes it a lot easier to show progress in reducing it in the future. Not that that ever occurred to them, I'm sure.
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Comments
Easier to show progress?
Submitted by Martin (not verified) on Fri Feb. 20, 2009 12:06 PM PST.
Could you walk me through that logic? Let's say you have some big thing you want reduced, that is showing at 90, and the "honest" representation of it shows it at 100. So when you go to reduce it, let's say by the old representation it would have come out as 85, but in the new representation it comes out at 93 or something. How exactly is this some snazzy trick to make anyone look like some kickass deficit reducer?
good money after bad
Submitted by junebug on Fri Feb. 20, 2009 12:38 PM PST.
Counting it properly helps, but so does spending it wisely. Sadly, on this latter part, Obama doesn't seem to be following his own advice on military spending. And that's a shame.
Martin: I see two ways this
Submitted by David Bailey (not verified) on Fri Feb. 20, 2009 1:09 PM PST.
Martin:
I see two ways this improves the public perception of Obama's presidency in the long term. For one thing, a bigger deficit at the start of his administration provides more room for him to improve.
But more importantly, I think is the fact that Bush never included the cost of the Iraq war in deficit projections. We know Obama intends to reduce spending on Iraq by 90%+ over the next two years. By including that spending in deficit calculations, we will see the deficit shrink measurably as Obama completes withdrawal.
If we weren't including Iraq on the books, Obama would have more difficulty demonstrating that withdrawal significantly improved the deficit projections.
"Room to improve"
Submitted by Martin (not verified) on Fri Feb. 20, 2009 1:36 PM PST.
David: Thank you for your intelligent response, but I think the first part doesn't bear scrutiny. If you're trying to reduce the murder rate, because you have 90 murders a year in your town, and you make the numbers honest so that it shows 100 murders a year, all that's really happened is that the scale of the problem is simply seen to be larger, that is, that's 10% more bad things happening every year than was earlier perceived. Basically you're saying that if you have a house to clean up, it makes you look good if you cart in 10% more dirt and spread it around because later you'll look like a hero. The fact of the number being higher, to any reasonable person, just means the job is harder. Period.
The Iraq part is more pertinent, but was not what Kevin meant when he said that Obama wants high numbers so he'll look good later.
Martin: One other thing. By
Submitted by David Bailey (not verified) on Fri Feb. 20, 2009 1:11 PM PST.
Martin: One other thing. By starting out with an honest accounting of the size of Bush's deficit, Obama will look that much better by comparison no matter how much impact his policies actually have on the deficit.
Looking good.
Submitted by Martin (not verified) on Fri Feb. 20, 2009 1:41 PM PST.
David: for some reason you and Kevin both seem to think that we're about to relive Clinton's second term. Roubini is talking about a Japan-style L-shaped recession, one that might last ten years, and you and Kevin are talking about high deficit numbers in terms of how "good" they will make Obama look. The most likely outcome of the new high numbers is that Obama will be saddled with a huge deficit for his entire term. There is no projected period of prosperity in which large tax revenues will bring the deficit down. It's much more likely that there will be additional stimulus packages and bailouts. I admire Obama for standing up for honesty, but I think you, I, Kevin, and Obama can all agree that there are no big surplus years coming, and if that's true, Kevin's last statement is meaningless.
Another reason not to fudge the books
Submitted by Greg in FL on Fri Feb. 20, 2009 1:38 PM PST.
is that if you do, you run the risk of believing your own fakery. In the Worst Presidency Ever that we just escaped from, I think there were plenty people in high office who actually believed Saddam was connected to 9/11, and that the United States didn't use torture, and that the motivation of extremists was that they hated us for our freedoms, and on and on.
At some point fairly early this decade, serious people around the world started wondering whether the administration spinners they heard really were basing policy on the nonsense they were spouting. Our trading partners and military allies around the world had to be wondering whether the leadership of the United States was simply delusional. Needless to say, this couldn't have been good for us, either economically or strategically.
Bring out the Republican Waambulance!
Submitted by Joe S. (not verified) on Fri Feb. 20, 2009 3:31 PM PST.
Barely three weeks of the Obama administration, and the budget is already zooming up without any money yet being spent! It goes to show how rapidly the corrupt Chicago-style politics of Those People can destroy the principles of financial responsibility that the Bush Administration stood for.
Coming to you from a media outlet tonight.
Just doing a better job of telling the truth...
Submitted by bob in fla on Fri Feb. 20, 2009 3:53 PM PST.
Just doing a better job of telling the truth makes Obama look better. And Kevin seems to overlook one negative of being more honest in this case. By officially stating the current real deficit, Obama will be under even more pressure to cut the deficit than he is already. So in the near therm, he just made his job more difficult.
This cynicism you are expressing seems to be right out of the GOP playbook. The guy promised change & transparency. Yet when he keeps those promises, even the left accuse him of politics as usual. Just stop, dammit.
If you think this is bad....
Submitted by jhm on Sat Feb. 21, 2009 5:31 AM PST.
Martin, the way I look at it, is that it never hurts to help your opponents to look bad. If the administration can accomplish this as a by-product of telling the American people the truth, so much the better.
I would make a less
Submitted by DWN (not verified) on Sat Feb. 21, 2009 6:47 AM PST.
I would make a less skeptical point. If you want to start having a honest public discussion, you really need to have honest numbers.
Why would that serve the situation at hand? I can think of a number of ways, but less cynically, if you want to deal with a number of long term issues that will cost the treasury significant money, it might be the only politically feasible way to approach it in that long term.
Retroactive Scoring
Submitted by Ted Lehmann (not verified) on Sat Feb. 21, 2009 11:38 AM PST.
I think it was Steve Benen who suggested this good idea be accompanied by the CBO's rescoring the last eight (maybe sixteen would be better) budgets to reflect what they would have been using the same budget scoring as is now going to be in effect. It would mitigate the seeming increase and expose the Bush budget for what it was. - Ted
Who ARE "the cynical among us"?
Submitted by Frank Lynch (not verified) on Sat Feb. 21, 2009 2:48 PM PST.
Kevin, I can't figure out if you number yourself among the cynical who might think there's a ploy going on. Or if this is just a straw man you failed to knock down.
Are you suggesting that if there were reductions in the costs of items that weren't once included in the budget, that it would be somehow wrong to take credit for it?
Governmental Accounting
Submitted by GridIron on Sat Feb. 21, 2009 8:36 PM PST.
I agree Kevin that as depressing as the additional $2.7 trillion sounds that the transparency is good. We should expect the same transparency from the public sector as they demand from the private sector, if not more.
Great, now we can look
Submitted by jmack (not verified) on Sat Feb. 21, 2009 9:13 PM PST.
Great, now we can look forward to Republicans crowing in 2010 about how Obama increased the deficit by $2.7 trillion during the first two years of his term.
Critical Analysis
Submitted by Anonymous (not verified) on Sun Feb. 22, 2009 6:02 PM PST.
I have to agree that the author didn't take a critical stance on this. Obama could have taken the hard road by attempting to make real deficit reductions instead of letting the end of the war make him look good. If he ever tries his own tricky accounting maneuvers in the future, will the same author stand up and point it out? It seems like the phrase "fair and balanced" will never be the same.
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