What We Really Got in those Cuts...

Posted 4/13/2011

By JAMES TARANTO (Wall Street Journal Online, 4/13/2011)

Those $38 billion in cuts from the 2011 budget turn out to be less than meets the eye, according to the Associated Press, which reports that they "were accomplished in large part by pruning money left over from previous years, using accounting sleight of hand and going after programs President Barack Obama had targeted anyway":

As a result of the legerdemain, Obama was able to reverse many of the cuts passed by House Republicans in February when the chamber approved a bill slashing this year's budget by more than $60 billion. In doing so, the White House protected favorites like the Head Start early learning program, while maintaining the maximum Pell grant of $5,550 and funding for Obama's "Race to the Top" initiative that provides grants to better-performing schools.

Instead, the cuts that actually will make it into law are far tamer, including cuts to earmarks, unspent census money, leftover federal construction funding, and $2.5 billion from the most recent renewal of highway programs that can't be spent because of restrictions set by other legislation. Another $3.5 billion comes from unused spending authority from a program providing health care to children of lower-income families.

Another AP dispatch explains that "almost $18 billion--just less than half--involve simply mopping up pools of unused money spread across the budget. While still counting as cuts, the money from those pools can be used to shore up day-to-day agency budgets and other programs like health research. Admittedly, those cuts don't reduce the deficit."

Revenue source

The metaphor "mopping up pools" doesn't quite fit here. When you mop up a puddle of water, you end up with nothing of value other than a dry floor. The dirty water is worthless, and you just pour it down the drain. Oh wait, come to think of it, that's what they're doing with the money from the "pools."

The analogy that occurred to us was to finding money under the cushions of a couch. So that's what Obama meant by "change."

We suppose spending the $18 billion from the couch is better than taxing or borrowing a like amount, and if the money was just sitting there, the government probably would have found a way to spend it eventually anyway. The IRS is not in the habit of sending letters that say: "Dear taxpayer, It turns out we took more of your money than we needed for what we were spending. Enclosed is a refund. Regards, Uncle Sam."

Still, no one ever made a living looking under couch cushions, which is to say that "unspent money from previous years" is not a sustainable source of revenue. To the extent that the budget deal relies on it, it merely postpones real reform.