Time to End the U.S. Debt Accelerator Baseline Budgeting

Posted: May 07, 2012 12:01 AM
Time to End the U.S. Debt Accelerator Baseline Budgeting

Have you ever wondered how President Obama's budget can be unanimously defeated by both the House (414-0) and the Senate (97-0) and how the U.S. Senate can go three years without submitting or passing a single budget and yet government spending keeps exploding and the federal debt keeps growing? How can Rep. Paul Ryan's House budget be "radical," "social Darwinism" when it actually increases both government spending and our debt?

Since 1974, our spending nightmare has been fueled by a process that sounds responsible--baseline budgeting. It's a political ruse that victimizes taxpayers and gives Congressional free-spenders a way of never having to even pass a budget. The Congressional Budget Office (CBO) uses the "current services baseline" and automatically increases the budgets of existing federal agencies every year even if Congress and the Senate do nothing. Then politicians can campaign on "cuts" when all they're risking is increasing spending at a somewhat smaller rate.

Before 1974, every President would submit his budget to set the course for national spending. Congress would work to increase funds for their priorities. President Nixon would counter by impounding or withholding some funds from agencies he didn't support. With a Watergate-weakened Nixon, Congress responded by passing the Congressional Budget Act of 1974.

The bill prohibited presidential impounding and created the Office of Management and Budget (OMB) to prepare projections of federal spending "based on the continuation of the existing level of government services." In 1985, the Deficit Control Act ensured that spending would be adjusted to keep pace with inflation. Now, with every item in the budget increasing between 3 to 10 percent every year, to get more money, agencies just keep spending. When new budget programs are created, they become part of the baseline resulting in more money next year without any formal action by Congress.

As our federal debt races toward $16 trillion, note that the federal debt has breached 100 percent of GDP only twice since 1900--during World War II and every year since 2008. With baseline budgeting, excessive government spending is locked in.

Thankfully, the states are leading the way. New Jersey Gov. Chris Christie took on baseline budgeting and won: "For too many years, our government has operated under the belief that the baseline--the place you begin--is to continue to fund every program in the budget: regardless of the fiscal climate, regardless of the economy, and regardless of the effectiveness of the program. Not anymore... (You) build a realistic budget from the bottom up. You find what you need--this year--to succeed.... Zero-based budgeting, which I promised in the campaign, has finally come to New Jersey."

Even the Democratic Governor of NY, Andrew Cuomo, has seen the light. He wrote in the N.Y. Post, "I was shocked to learn that the state's budget process is a sham.... When a governor takes office, in many ways the die has already been cast. ... For example, what is called a 7 percent cut in spending is actually a 6 percent increase over the prior year... This all must end." Gov Cuomo did end it and got the legislature to agree to an actual 2 percent across-the-board spending cut without raising taxes.

Finally, on February 3, 2012, through the efforts of Representatives Louie Gohmert and Rob Woodall, the GOP celebrated the passing of HR 920--The Baseline Reform Act. The bill would institute zero-baseline budgeting which starts from a "zero base," and every function within an organization is analyzed for its needs and costs. Budgets are built around what is needed, regardless of whether the budget item goes up or down.

There was no fanfare in the media, and, under Senator Harry Reid, the bill is unlikely to see the light of day in the Democrat-controlled Senate. You can change that in November!

Like any responsible family or business, budgeting at times requires spending cuts and tough choices. If you want politicians to be forced to make tough choices on where your tax dollars go, elect Mitt Romney and send in a few more fiscal conservatives to Washington and Sacramento.