As was the case with many things the Bush administration touched, the federal budget was gamed in such a way to make the deficit problems look smaller than they actually were. But now Obama and his team are set to change that.
Only problem? The deficit is going to get a lot bigger.
Try $2.7 trillion.
WASHINGTON â€” For his first annual budget next week, President Obama has banned four accounting gimmicks that President George W. Bush used to make deficit projections look smaller. The price of more honest bookkeeping: A budget that is $2.7 trillion deeper in the red over the next decade than it would otherwise appear, according to administration officials.
The new accounting involves spending on the wars in Iraq and Afghanistan, Medicare reimbursements to physicians and the cost of disaster responses.
But the biggest adjustment will deal with revenues from the alternative minimum tax, a parallel tax system enacted in 1969 to prevent the wealthy from using tax shelters to avoid paying any income tax.
No doubt there will be an initial backlash, but I’m hoping that folks will appreciate the increased transparency and realize once and for all how devastating the deception out of the Bush administration really was.
Mr. Obamaâ€™s banishment of the gimmicks, which have been widely criticized, is in keeping with his promise to run a more transparent government.
Fiscal sleight of hand has long been a staple of federal budgets, giving rise to phrases like â€œrosy scenarioâ€ and â€œmagic asterisks.â€
The $2.7 trillion in additional deficit spending, Mr. Orszag said, is â€œa huge amount of money that would just be kind of a magic asterisk in previous budgets.â€
â€œThe president prefers to tell the truth,â€ he said, â€œrather than make the numbers look better by pretending.â€
I think we just saw Orszag call Bush a liar.
Well deserved. Especially since Obama has to dig us out of an additional $2.7 trillion hole that wasn’t accounted for.