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WSJ | Baseline budgeting: How DC fools the public about spending ‘cuts’





If the fiscal cliff talks make Lindsay Lohan look like a productive member of society, perhaps it’s because President Obama and  John Boehner are playing by the dysfunctional Beltway rules. The rules work if you like bigger government, but Republicans need a new strategy, which starts by exposing the rigged game of "baseline budgeting."

Both the White House and House Republicans are pretending that their goal is "reducing the deficit," which they suggest means making real spending choices. They are talking about a "$4 trillion plan," or something, regardless of how that number is reached.

Here’s the reality: Those numbers have no real meaning because they are conjured in the wilderness of mirrors that is the federal budget process. Since 1974, Capitol Hill’s "baseline" has automatically increased spending every year according to Congressional Budget Office projections, which means before anyone has submitted a budget or cast a single vote. Tax and spending changes are then measured off that inflated baseline, not in absolute terms.

The most absurd current example is Mr. Obama’s claim that his "$4 trillion" plan reduces the deficit by about $800 billion over 10 years by ending the wars in Iraq and Afghanistan. But those "savings," as he calls them, are measured against a White House budget office spending baseline that is fictional. Those wars are already being unwound and everyone knows the money will never be spent. But they are called "savings" to gull the public and make the deficit reduction add up to a large-sounding $4 trillion.

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