April 20, 2014

Budget Distractions and Creative Accounting

  • The national debt has grown significantly in recent years due to rising annual deficits. A deficit occurs in any year the government spends more...

Despite all the serious budget work facing Congress, lawmakers in both parties continue to distract themselves, fritter away time and confuse the public with proposals that serve no useful purpose. Last week provided two good examples.

House Republicans were busy with a bill that would set priorities for payments on federal obligations if Congress irresponsibly allows the debt limit to be reached later this year.

“There’s understandable confusion and disagreement over what exactly the bill would do, but the general idea seems to be that the federal government could somehow limit the damage of a default by presenting itself to the world as only a partial deadbeat,” writes Concord Coalition Communications Director Steve Winn in a new blog post.

The legislation, approved Wednesday by the House Ways and Means Committee, would instruct the Treasury to continue making payments on principal and interest on U.S. debt obligations – and keep Social Security checks going out.

Winn notes, however, that the nation’s creditors and global financial markets “are under no obligation to embrace lawmakers’ unconventional notions about what constitutes a government default.” And Republicans should not be threatening to let the United States default anyway.

As for the Democrats, Senate Majority Leader Harry Reid introduced a bill that presents previously planned reductions in war spending as a new exercise in frugality. This would supposedly enable the government to avoid real spending cuts that are scheduled to take place later this year under sequestration.

While Washington needs to find a good alternative to sequestration, phony savings from military draw-downs are not the answer. Robert L. Bixby, Concord’s executive director, has previously referred to such tactics as “the mother of all budget gimmicks.”

Instead of wasting time trying to find new ways to avoid old problems, why don’t elected officials just fix the problems?