Thursday, April 14, 2011

Budget Cuts: Are They Real?

There were two articles recently in the WaPo that caught my interest:

This one, where the CBO finds that the $38 billion isn't all from direct program cuts, and an insightful opinion piece by Ezra Klein on how the $38 billion can be reduced as far as $350 million if you slice it right.

The headline is indeed attention grabbing -- did the politicians really swindle us into thinking they had made a fairly significant cut, when all they had been doing was a shell game?  But then I read the articles, and found many examples of where spending had been effectively taken away from budget swindlers.  Unfortunately, I have been party to those budget swindles many, many times.

Bottom line: at the end of the day, this will result in some real funding not being spent that would have been spent by government.

The first WaPo article makes mention of a few projects for which funding was no longer necessary: $560 million for an Education Department program that no longer exists (holy moly!  that's huge for DoEd!!), $15 million for a US Capitol building that already exists.

I assure you, department budget weenies had one word on their mind:

This happens all the time: money is appropriated for one project, and it either comes in under budget (which actually happens from time to time, you just never hear about it), or the priorities change.  At which point, the money is reprogrammed: it is removed from this project and transferred to that project.  This usually requires a few levels of approval, but unless Congress specifically appropriated the money in Congressional language, departments have a fair amount of authority to shift money around.

Which, ultimately, is a good thing, because you don't want Congress to have to micromanage every department.  They do a crummy enough job managing their own finances, as it is.

So, this budget compromise, among other things, effectively prevents budget weenies from reprogramming the money and spending it elsewhere. Which is a good start.

But, for the record, $38 billion is a drop in the bucket (1%) compared to a $3.6 trillion annual spending budget.  Time to start hitting Social Security, Medicare, Medicaid, and even national defense.

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