Tuesday, January 25, 2005

Fun with accounting

So, the Republicans have discovered a neat trick. Kevin Drum gives the details:

DEFICITS FOREVER....The CBO's latest deficit projections are out, and the press is accurately reporting that they show a reduced deficit for 2005 only because the CBO is projecting zero new expenses for the war in Iraq. Why? Because last year supplemental military appropriations totaled $115 billion and CBO is required by law to extrapolate that into the future. This year — so far — there have been no supplemental military appropriations, so CBO is now legally required to extrapolate that into the future.

The media is already starting to report that the CBO has reported a huge drop in the long term federal budget deficit by the simple mistake of comparing a previous estimating that includes Iraq with a new estimate that does not. Score one for Bush who is now almost all the way to his 2004 promise of cutting the deficit in half!

Of course, Kevin illustrates the problem neatly:

Bottom line: if you do an apples-to-apples comparison, last September CBO was projecting a 10-year deficit of $861 billion not counting Iraq. Today, CBO is projecting a 10-year deficit of $1,364 billion not counting Iraq. In other words, the projected deficit has gone up 58%.

So here's the trick: Wait until the CBO report comes out each year before announcing a request for additional Iraq funds. That way those funds don't get factored into their deficit projections. Then brag about how you have substantially cut the budget deficit while at the same time requesting more budget busting dollars for Bush's misadventure.

Voila! $80+ billion a year in free money and great PR!


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