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Toxic swamp gas produces baseline budgeting

Last Wednesday, Senate and House of Representatives leaders in Washington agreed on a $1.3 trillion spending bill two days before an impending government “shutdown.”

Like most words used in D.C., the term “shutdown” is very misleading. Only “non-essential” government employees are told to stay home. Military and federal law enforcement personnel are not put on leave. Neither are air traffic controllers. Social Security and other entitlement payments continue.

Approximately 40 percent of non-military government employees are considered “non-essential.” And if federal agencies’ conduct in past “shutdowns” is any indication, the “non-essential” employees who have the most direct impact on citizens’ lives are the first to be furloughed. These non-essentials, like the National Park ranger who opens the park’s gate each morning, or U.S. Customs agents processing U.S. citizens returning from foreign travel, are used as leverage to demonstrate how truly awful life is without a bloated cast of government “workers.”

Bette Midler wailed “I’m being marked down!” in “Ruthless People” when her captors, after spending time with Bette’s obnoxious character, Barbara, reduced the ransom demand to her husband from $500,000 to $10,000. Government employees labeled “non-essential” must suffer the same angst.

The $1.3 trillion figure is truly staggering. Kentucky senator Rand Paul, said the spending bill, as passed, will guarantee a trillion-dollar deficit for the fiscal year.

Go to http://www.usdebtclock.org/ to watch the debt clock spin.

How did the United States become a debtor nation, owing $21.47 trillion? A major contributor to our fiscal fiasco is “baseline budgeting,” the federal government’s accounting method to determine future budgets. The Congressional Budget Office (CBO) prepares the next fiscal year’s budget by using the previous year’s expenditures as a “baseline,” then increases it to adjust for alleged changes in inflation, agency programs usage and population growth.

These 3 percent to 10 percent annual increases are automatic and inexorable.

Baseline budgeting allows politicians to claim that a pet project or agency is being “cut” when all that’s being done is a reduction in the rate of growth of spending.

Here’s a simple example: In the previous fiscal year, the federal government spent $100 on widget subsidies. Baseline budgeting requires that in the next fiscal year, the feds spend $107 on widgets. There’s wrangling with the key Senator from the state that produces 90 percent of the widgets for this country. Negotiations ensue, and it’s decided that in the spirit of compromise, $103 will be spent on widgets in the next fiscal year.

Then Senator Bluto from widget country goes on CNN, Fox and NBC and complains loudly that the U.S. widget program is being slashed by $4, a draconian and unjustified “budget cut.”

No media representative asks Senator Bluto: “Isn’t it true, Senator, that spending on widgets next year will increase by $3 over last fiscal year?”

Only in Washington can an increase in spending by 3 percent be called a “cut.” And the demagogue whose constituents are most affected by the decline in the rate of growth will call it a “massive cut.” This happens every time there’s a dispute in the House or Senate over spending.

The United States government has not operated under a budget since 2009. Not one single budget was enacted during the Obama presidency. It funded operations through Continuing Resolutions (CR’s), which is what was agreed to last Wednesday.

Private sector businesses do not have the luxury of operating under CR’s. In fact, the SEC requires corporations to publish their budgets, and to predict with some accuracy earnings, major losses and other significant events or trends that affect profits and stock prices. Corporations are sued every day for misdiagnosing future events.

Baseline budgeting only exists in Washington, D.C. The only possible explanation for running an entity that spends $3.7 trillion a year without a budget in place is that residents inside the Beltway have been breathing the gas bubbling up from the swamp for too long.

Michael Henry writes in Oxford, Miss. He can be reached at mhenryauthor@gmail.com.