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Friday, September 29, 2006
The Many Numbers of the Budget Deficit
Kevin G. Hall, writing for McClatchy, does a nice job of describing the tricksyness with which federal budget numbers are bandied about. From the voice of Pollyanna to that of the bard of the Apocalypse, St. John, talk of the budget elicits a whole range of degrees of concern. To wit:
Pollyanna:
The nonpartisan Congressional Budget Office has projected that the federal deficit for the fiscal year ending Sept. 30 will total around $260 billion, aided by a surge in revenues. That's $58 billion lower than last year's deficit and about $77 billion lower than projections at the beginning of the fiscal year.
St. John:
Buried deep in the nation's financial report, issued every December, is an alternative accrual-basis deficit calculation. For the fiscal year that ended Sept. 30, 2005, that deficit totaled $760 billion. It has grown every year of the Bush presidency. It will grow in the 2006 fiscal year too, approaching $800 billion or more.
Comptroller General David Walker, the nation's chief accounting auditor, has added up all the federal government's unfunded liabilities, or promises, and offers a present-day figure of $46 trillion. Think of that as promises to the tune of $155,932.18 for each of the 295 million Americans.
And finally, Goldilocks:
[T]he Social Security trust fund...is running a $177 billion surplus this year. Washington spends it, but doesn't count it as spending. It's officially listed as "off-budget" borrowing.
[...]
So the deficit is actually about $437 billion, the CBO calculates: the $260 billion official deficit plus the $177 billion borrowed from the trust fund. Since the money is "borrowed," it adds to the gross federal debt, which is expected to reach about $8.5 trillion by Jan. 1.
So, when policymakers and politicians talk about the fiscal health of the nation, it is important to keep in mind how they're measuring it. This is not a cynical indictment of federal accounting and that anyone can get the numbers to tell any story they like. Rather, the point here is that there is no one budget figure. With talk of the budget come lots of numbers, lots of ways to express what's in the Treasury, what isn't, and what may or may not be at some undetermined point in the future.
Posted by Craig Jennings
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