The Return of Liberals’ Fuzzy Math Print
By Quin Hillyer
Wednesday, July 06 2011
The recession, not tax cuts, caused federal revenues to collapse.

It would be one helluva entertaining spectacle to watch liberals do back flips with budget numbers if the consequences weren’t so serious. Not even Cirque de Soleil performers are so acrobatic and adept at shape-shifting pyrotechnics. The left’s latest gambit is to claim that federal domestic discretionary spending, in context, is not extravagant, and indeed that an apples-to-apples comparison shows it hasn’t even risen in the past decade.

The claim is laughable.

Brian Beutler of Talking Points Memo publicized this assertion on July 4, providing service as an amanuensis for Senate Democrats on the Appropriations Committee. “[I]f you correct for inflation, and for growing population, it turns out we're spending exactly the same amount on these programs as we were a full decade ago,” Beutler writes, based on information provided by the staff of Appropriations Chairman Daniel Inouye of Hawaii.

According to a chart provided by the committee, “non-security” discretionary spending, after adjusting for inflation and population growth, stood at $369 billion in 2001, and remains at that exact same level now.

That assertion results from all sorts of funny business. First, note that the committee chose a term used nowhere in official parlance. The Office of Management and Budget (OMB) does not use the term “non-security” spending but “non-defense” discretionary spending. By instead changing “defense” to “security,” the committee provides a neat sleight-of-hand. This way, it can shove the bloated bureaucracy of the Transportation Security Administration, other Homeland Security boondoggles and who-knows-what-else into the catch-all category of “security” spending and thus have the “domestic discretionary” accounts look smaller.

The Appropriations Committee usually deals in a measurement called “Budget Authority.” OMB tables show that in “Budget Authority for discretionary programs,” the “total non-defense” number in 2001 was $332.1 billion. Adjust that for inflation using the government’s own, handy, online calculator, and it would be $423.7 billion today. Add 9.1 percent for population growth and you get $462.3 billion as a baseline. That’s still significantly below the 2011 OMB “estimate” of $546.6 billion. By those OMB calculations, non-defense discretionary spending has risen more than 18 percent in the past 10 years, even after allowing for inflation and population growth.

The next trick of the committee was to choose an extraordinarily generous baseline year, 2001. This was the final budget signed into law by President Bill Clinton, in a year when both he and an incontinent Republican Congress were spending like crazy in order to help their respective candidates win the presidency. But for the more normal year of FY 1998, after Bill Clinton had gained significant leverage by winning re-election, he signed into law a GOP Approps budget for non-defense discretionary spending of just $257.2 billion. Yet little old ladies weren’t freezing in the gutter and children weren’t starving in the street. Even without tons of government aid, poverty was way down.

It was only after that, in a three-year spending spree that accompanied and followed the Lewinsky scandal, when the spigots opened so that the $257.2 billion in FY 1998 became the $332.1 billion in FY 2001 – a 29.1 percent hike in three years of ultra-low inflation. That pre-spending orgy baseline of 1998, signed by the far-from-heartless Mr. Feel-Your-Pain, Clinton,  shows just how outrageous this year’s $547.6 billion spend-fest is. In nominal dollars, discretionary non-defense spending has well more than doubled in just 13 years.

In truth, it’s not exactly clear how the committee arrived at its figures, but it can’t even use the dodge of claiming to measure spending by using a different category called “Outlays’ rather than “Budget Authority.” Indeed, by that measure, the record is even worse. Again, OMB tells the tale, this time providing the inflation adjustments for us. Using constant 2005 dollars, discretionary non-defense outlays rose from $390.7 billion in 2001 to $568.7 billion this year – a 45.6 percent hike. Even providing the committee the fig leaf of population growth, the hike is 34 percent.

All told, those are a lot of numbers to consider, but their import is clear: Domestic discretionary spending should still be significantly reduced.

TPM’s Mr. Beutler also takes great pains to try to blame the Bush tax cuts for today’s huge deficits. Again, he’s wrong – or at least wrong about the tax cuts that enthused supply-siders in 2003. After the 2003 changes, total tax receipts as a percentage of Gross Domestic Product actually rose in four years from 16.2 percent to 18.5 percent – or by more than half a trillion dollars, more than 25 percent, in actual revenues.

The recession, not tax cuts, caused federal revenues to collapse. If government would only stop crowding out private investment, so that the economy can grow again, the revenues will return without raising taxes a single penny, and deficits will drop – without any arithmetical somersaults.