July 23, 2014 SIGN IN | REGISTER

When Warmer Weather Meets the Federal Budget

The irony is that both conclusions are correct in some sense. The deficit would indeed be higher compared to the assumption that the tax cuts will continue. Compared to the assumption that they will expire, the deficit is lower.

So, for political purposes, you get to say what you want, use numbers that back up what youíre saying and ignore the comparison that says youíre absolutely wrong.

The annual misuse of the baseline has been a perennial feature of the federal budget debate at least since the Congressional Budget Act created the CBO and the baseline in 1974. In the 48 years since, there has been an almost yearly fight about whether spending and revenues should be compared to the actual amount that was spent or paid the previous year or to a projection of what will be spent under current law or policies. The first means that more spending will always look like an increase; the second means that increased spending can be characterized as a reduction, if itís less than what was assumed.

The snow removal baseline is not as far removed from what the CBO does with the federal government as it might seem. Compared to what was spent treating the roads and plowing in 2012, almost anything spent in 2013 will appear to be an increase. Compared to the average amount from previous years, the amount spent in 2013 could be either a decrease or an increase. And compared to a baseline that assumes a larger-than-average snowfall because that has happened once every decade and itís time, an increase in 2013 could still look like a decrease even though the amount spent is more than the previous year.

This is why what many said last week about the meaning of what the CBO analyses show about the Obama budget needs to be taken with more than just a grain of that salt that wasnít needed for the roads around Washington this winter. Basically, it was all just the federal budget equivalent of a snow job.

Stan Collender is a partner at Qorvis Communications and founder of the blog Capital Gains and Games. He is also the author of ďThe Guide to the Federal Budget.Ē

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