TW: This is one of those relatively subtle yet profound changes that greatly impact our governance. Obama, breaking with past practices of W. Bush and several previous POTUS, is calculating our federal budget in a more realistic manner which will increase the projected fiscal deficit by $2.7 trillion over the coming decade.
You may recall the annual hubbub regarding the AMT "patch", every year we now "patch" the AMT to avoid middle class tax payer revolt. Obama says lets call a spade a spade and projects the costs of the patching into the baseline budget. Correspondingly W. Bush funded much of the Iraq and Afghanistan wars with extraordinary resolutions not included in the baseline budget but again those will now be integrated.
Framing the budget in more realistic terms is a good start. Cynics will rightly claim it gives Obama more leeway to "reduce" the future deficit as he is now increasing the baseline but I will take a realistic budget over fantasy any day.
From NYT:
"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...
...Mr. Obama’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 “rosy scenario” and “magic asterisks.”
...As for war costs, Mr. Bush included little or none in his annual military budgets, instead routinely asking Congress for supplemental appropriations during the year. Mr. Obama will include cost projections for every year through the 2019 fiscal year to cover “overseas military contingencies” — nearly $500 billion over 10 years.
For Medicare, Mr. Bush routinely budgeted less than actual costs for payments to physicians, although he and Congress regularly waived a law mandating the lower reimbursements for fear that doctors would quit serving beneficiaries in protest.
Mr. Obama will budget $401 billion over 10 years for higher costs and interest on the debt.
He will also budget $273 billion in that period for natural disasters. Every year the government pays billions for disaster relief, but presidents and lawmakers have long ignored budget reformers’ calls for a contingency account to reflect that certainty."
http://www.nytimes.com/2009/02/20/us/politics/20budget.html?scp=1&sq=obama%20budget&st=cse
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