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President Richard NIxon
Associated Press
President Richard NIxon

Addition by subtraction

Congress | Washington’s baseline budgeting leads to spending ‘cuts’ that increase spending

Issue: "Another dark day in America," Jan. 12, 2013

Weeks before leaving office, President Richard Nixon signed a bill that would be far more devastating to the country than the Watergate scandal. The Congressional Budget Act of 1974 created the Congressional Budget Office (CBO) and codified a practice known as “baseline budgeting,” a key contributor to the river of red ink flowing out of Washington, D.C.

Baseline budgeting allows for automatic spending increases every year—currently about 6 percent annually—based on inflation, projected policy decisions, and other factors. This leaves free-spending politicians little incentive to make changes, or even pass a budget, because spending continues to skyrocket if they do nothing.

Americans should be clamoring for lawmakers to use a baseline of reality (zero-based budgeting), so if spending remains the same from one year to the next, it’s considered neither a cut nor an increase. As it is, if Congress spent the same amount this year as it did last year, the CBO would report a draconian cut of around $10 trillion (over 10 years), and the mainstream media would berate the extremists who dared advocate for such drastic measures—even though the cuts would be theoretical.

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Forty-five state constitutions mandate balanced budgets, and some of them, such as Texas and New Jersey, are doing it. But no such reality exists in Washington, where The Wall Street Journal says numbers are “conjured in the wilderness of mirrors that is the federal budget process.”

Going over the fiscal cliff would equate to real cuts that would hurt in the short term, but it would also accomplish what politicians have been thus far unwilling to do: Make difficult choices. Whatever “cuts” President Barack Obama and House Speaker John Boehner agree to in a budget deal will almost certainly include no cuts at all.


J.C. Derrick
J.C. Derrick

J.C. is WORLD Magazine's Washington Bureau chief. He spent 10 years covering sports, higher education, and politics for the Longview News-Journal and other newspapers in Texas before joining WORLD in 2012. Follow J.C. on Twitter @jcderrick1.


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