Budgetary truffle shuffle: When a $17 billion “cut” isn’t a cut

posted at 8:57 pm on May 7, 2009 by Repurblican
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Like AP, I thought the Administration’s budget-cutting charade, following the “$100 million in cuts” debacle, was another embarrassment for Obama and his budget chief, Peter Orszag, demonstrating the farcical nature of their budget hawk chops. 

But apparently, embarrassment is an understatement. According to Brian Riedl of the Heritage Foundation,

One detail not being reported about the President’s $17 billion in “cuts” . . . is that the budget would not be cut. Virtually every dollar “saved” would automatically go towards new spending instead of deficit reduction

Here’s why: The president already proposed a specific discretionary spending level (which included these proposals), and Congress has already approved a budget that would spend $1,086 billion on regular discretionary spending in FY 2010. The discretionary savings proposals affect only the composition of such spending. Thus, even if the entire $12.5 billion in discretionary spending cuts are enacted, the savings would automatically be plowed into other programs to maintain discretionary spending at that pre-set $1,086 billion level. So this exercise is about reorganizing — not reducing — government.

So the cuts weren’t so much cuts as reallocations, meaning that not only were George W. Bush’s $18 billion in proposed 2009 budget reductions larger than Obama’s “cuts” this year… they were larger by several magnitudes, all the while applied to a budgetary deficit one-quarter the size of Obama’s. So to go back to AP’s example:

To put the cuts in perspective, imagine a family that’s already deeply in debt realizing they’re on pace to spend $50,000 this year — and “scaling back” by foregoing one $250 purchase. One half of one percent. That’s what we’re talking about.

…it’s worse than that. It’s as if the family decided that instead of paying $20/month for dial-up Internet, they’re going to instead upgrade to DSL for the same price. More bang for one-half percent of their buck, but does it move them a step closer to solving their debt problems? 

Nope.

But at least they’ll get to see Chunk in all his streaming YouTube goodness. And isn’t that almost as good as saving money?

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