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'Historic' budget cuts reveal accounting tricks, more spin

A few weeks ago, the federal government was on the verge of shutting down over a budget deal for the second half of fiscal 2011. Negotiations between congressional Republicans and the Obama administration resulted in each side blaming the other for the impasse. An agreement was reached just two hours before an official government shutdown was to begin.

The agreement, which Washington officials from both parties explained would cut $38 billion from the current year’s spending plan, was described as historic.

President Barack Obama and Republican House Speaker John Boehner both talked about serious federal spending reductions that were unprecedented. Elected leaders from both parties praised their counterparts and explained that they had come together to make tough decisions for the good of the country. And even though $38 billion was just a small fraction of the long-term cuts that will be required to bring down the massive federal deficit, it looked like a good start.

Despite the brinksmanship over a potential shutdown, the last-minute agreement was presented in a way suggesting our political leaders were finally getting serious.

But news reports in the following days told a different story. According to an analysis by the Associated Press, what had been sold as a $38 billion spending reduction for the remainder of 2011 would actually trim spending for the rest of the year by less than $1 billion.

The $38 billion, which amounted to less than one percent of the budget, was arrived at, partially, according to news analyses, by accounting gimmicks and other tricks.

Examples include the $6.2 billion “cut” from the Commerce Department for conducting the 2010 census. The money was allocated, but not spent — so congressional leaders and the White House counted that a cost savings.

Because much federal spending funds multiyear programs, some cost savings will not be felt for several years. That’s just government accounting.

Other so-called cuts were found by targeting earmarks, which congressional leaders said were ending anyway, and by counting leftover federal funding that could not be used for other purposes.

The budget negotiators from both parties also double-counted some spending cuts that had already been approved in earlier stopgap funding bills.

The Washington Post said the budget cuts “are not quite what they seem . . . and would not necessarily result in lost jobs or service cutbacks. In several cases, what look like large reductions are actually accounting gimmicks.”

This latest, bipartisan spin from Washington is not so much about money, it’s about honesty. Even with a true $38 billion in cuts for the remainder of this year, it wouldn’t have much long-term effect. What is important are future spending reductions to trim long-term deficits.

The amount of money saved in the recent “historic” budget deal is not so important. What is important, and troubling, is that the Speaker of the House and the Senate Majority Leader and the president presented this deal in a less-than-honest way. They were just playing politics.

When it comes to the much more difficult, long-term spending cuts needed to rein in federal deficits, the recent display of politicians — instead of real, honest leaders — was not encouraging.

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