Editore"s Note
Tilting at Windmills

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February 20, 2009

WELCOME BACK, BUDGET SANITY.... President Obama has only been in office for a month, and I'm already tired of the phrase "change you can believe in." When he does something great, his supporters use it ("That's change we can believe in!"). When he does something misguided, his detractors use it ("Whatever this is, it's not change we can believe in"). This has become rather tiresome.

That said, the whole point of "change you can believe in," when it was used during the presidential campaign, was to highlight Obama's commitment to changing the way the system works. Americans had been misled so often about so many aspects of government over the last eight years, Obama wanted to return some integrity and intellectual honesty to the political process. The cliche was practically intended to be literal -- he would change the system, so that we could believe in it again.

And with that in mind, this is exactly the kind of change Obama promised to deliver.

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.

While budget sleight of hand and "magic asterisks" had become the norm, OMB Director Peter Orszag explained, "The president prefers to tell the truth, rather than make the numbers look better by pretending."

It's about damn time. The smoke-and-mirrors approach to which we've grown accustomed was ridiculous. It was a problem policymakers recognized, but didn't want to talk about, and had no interest in fixing. It's not only heartening to see Obama bring some sanity to the process, it will also have key practical consequences -- honest budgets lead to better policy making.

Noam Scheiber added that it will be "kinda helpful to have a budget that actually means something when you're debating public policy," and added the political upside to using honest budget numbers for a change: "Why not make the long-term deficit look as large as possible at the beginning of your term? Not only can you fairly blame your predecessor at that point; the bigger the deficit looks, the easier it is to show progress, which Obama will need to do as he runs for re-election. To take one example, you can't claim savings from drawing down in Iraq if you don't put Iraq spending on the budget in the first place (which Bush mostly didn't)."

I think that's largely right, but the politics might be more complicated than that. By bringing some integrity to the budget, Obama will also show some steep deficits, which will likely cause a major-league trantrum on the Hill.

John Cole offers the administration some excellent advice:

The very first thing I would do if I were Peter Orszag and company, and this is one of the very few times I actually hope someone in government listens to me, is to go back and re-score the last decade or so of budgets using the new accounting system, so when they roll this out they can say "Here is what this year's budget would have looked like under the old system. Here is what it looks like under the new system. Here are the past ten years worth of budgets under the old system. Here they are under the new system." For political reasons, this simply has to be done.

Steve Benen 1:50 PM Permalink | Trackbacks | Comments (16)

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Comments

The Obama administration should also post publicly what the Bush deficits were, as computed by the new rules, so that comparisons are accurate.

Posted by: Joe Buck on February 20, 2009 at 1:54 PM | PERMALINK

Of course they are going to go back and re-score the past years, probably as far back as possible.

What this gives you is less of a jump in this years deficit, and a full accounting of the Iraq war costs.

Posted by: tomj on February 20, 2009 at 1:58 PM | PERMALINK

While he's at it, a more honest accounting of inflation rates and unemployment numbers would be refreshing.

Posted by: JWK on February 20, 2009 at 1:59 PM | PERMALINK

i guess i am as smart as john cole. as i was reading the post, that was the first thing that popped into my mind -- show what these numbers would look like under the "old" accounting and what previous budgets would look like if more accurate accounting had been applied.

Posted by: karen marie on February 20, 2009 at 2:05 PM | PERMALINK

I feel sort of silly for stating the obvious but . . .

By the end of the day I predict multiple wingnuts will be trumpeting the fact that after less than a month in office, Obama has already 'increased' the deficit by $2.7 trillion, and making a misleading argument suggesting that the stimulus and housing bills are responsible.

Call it a hunch.

Posted by: David Bailey on February 20, 2009 at 2:09 PM | PERMALINK

It also sets a good example for Wall Street and the business-world in general: enough already with the games and gimmicks and deceptive accounting -- let's just all grow up here.

Posted by: eric on February 20, 2009 at 2:13 PM | PERMALINK

...multiple wingnuts will be trumpeting the fact...Obama has already 'increased' the deficit by $2.7 trillion... -David Bailey

Oh, not just trumpeting, they'll be stacking it, dividing it by Jesus, and slamming it to the ground with angry tears.

Posted by: doubtful on February 20, 2009 at 2:13 PM | PERMALINK

Amen to what Cole said.

Posted by: TR on February 20, 2009 at 2:22 PM | PERMALINK

Smearing Obama's critics by saying that he's only been in office for a month is what is tiresome and, in fact, dangerous.

In the month he's been in office, Obama has already affirmed the Bush administration's misuse of the state secrets act to prevent Biryam Mohamed from shining light on his mistreatment and torture by the U.S. I would say that this violation of our Constitution and several international treaties is more important to be concerned about than accurate budget numbers.

Those of us who are waiting for change we can believe in were hoping that a return to the rule of law was one change Obama would make. So far, it's been just the opposite.

Posted by: Larry on February 20, 2009 at 2:24 PM | PERMALINK

Dividing it by Jesus has got to be one of the funniest things I've heard in a long while.

Posted by: dk on February 20, 2009 at 2:42 PM | PERMALINK

Believe, for the past thirty years has been used as a substitute for the word think. Now we see that the propagandists use it as a substitute for "support". Humpty Dumpty Language RULEZ.

Posted by: thebewilderness on February 20, 2009 at 3:04 PM | PERMALINK

It's nice that some integrity is being restored to the budget process, but an accurate count doesn't matter much if you continue to spend your money on stupid stuff. I had assumed that Obama would make good on his commitment to trim military spending, but he's already plunking down more than he said he would. Not good. It's tough to imagine how we're going to right our economic ship if we continue throwing good dollars after bad just so we can watch shit blow up. Anyway, Uncle Barney says it far better than I do.

Posted by: junebug on February 20, 2009 at 3:15 PM | PERMALINK

this was the first thing i thought as i began reading this, too, only i know i'm *not* as smart as John Cole, so if *i* can think of it, that's a pretty low hurdle...

Posted by: tatere on February 20, 2009 at 5:26 PM | PERMALINK

Would we Dems expect anything less from the Obama admin.? I'd also like to see them public all the M3 (money supply) numbers which haven't been put out since Bush censored them.

Posted by: MarkH on February 20, 2009 at 6:13 PM | PERMALINK

It would be nice for Obama to redo the Bush admin budget numbers, present them in Congress and call them lying sacks of $hit - just to get it on the record.

But I'm hoping the Dems in Congress will do that anyways. Watching all the Grand Obstructionist Party members hop around like ants under a magnifying glass is always amusing.

Posted by: Glen on February 21, 2009 at 11:19 AM | PERMALINK

Joe Buck has an excellent suggestion. Obama needs to compare apples to apples so the talking points of dramatic budget disasters under him don't get a chance to take serious root.

This is just the kind of tactic I hoped Obama would take.

After this... if Obama changes his mind on wire tapping, I may develop a serious man-crush and ask for a cup of the Kool-Aid. I am SO close to becoming a believer.

Posted by: toowearyforoutrage on February 22, 2009 at 2:29 PM | PERMALINK




 

 

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