Obama to ban budget gimmicks

February 20, 6:42 PMProgressive Politics ExaminerJay McDonough

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The federal budget for fiscal year 2010 is due next week.  The Obama Administration announced today the president has banned the use of four accounting tricks widely used during the Bush Administration to hide the size of deficit projections. But prepare yourself - revealing the true deficit might stop your heart.

The four tricks include

  -  Removing the revenue from the Alternative Minimum Tax reform.  Despite the yearly and almost certain Congressionally authorized "patch" to the AMT, the White House would always presume the AMT would not be corrected for that fiscal year, overstating revenue.

  -  Excluding the cost of the Iraq and Afghanistan wars.

  -  Not counting as spending the Medicare reimbursements to physicians

  -  Failing to include expenditures related to disaster response and relief.

The Obama Administration estimates those changes will result in budgets that are $2.7T deeper in the red over the next ten years.

“The president prefers to tell the truth,” (Office of Management and Budget director Peter Orszag) said, “rather than make the numbers look better by pretending.”

John Cole notes that we should expect some disingenuous blowback from Republicans.  They will whine about the size of the deficit and falsely claim that George Bush, by comparison, never ran deficits like the Obama Administration.  John Cole offers a suggestion:

The first thing I would do if I were Peter Orszag and company, and this is one of the very few times I actually hope someone in government listens to me, is to go back and re-score the last decade or so of budgets using the new accounting system, so when they roll this out they can say “Here is what this year’s budget would have looked like under the old system. Here is what it looks like under the new system. Here are the past ten years worth of budgets under the old system. Here they are under the new system.” For political reasons, this simply has to be done.

It's gonna be ugly, but at least it's more transparent, a more real picture of the country's finances.  Would you rather not know how bad it is?