Citizens Against Government Waste defines baseline budgeting as follows:
“Baseline budgeting” is one of those Washington terms that sounds very dry and boring. In reality, baseline budgeting is one of the most sinister ways that politicians claim to cut spending when they are actually increasing spending. The Congressional Budget Office defines the baseline as a benchmark for measuring the budgetary effects of proposed changes in federal revenue or spending, with the assumption that current budgetary policies or current services are continued without change. The baseline includes automatic adjustments for inflation and anticipated increases in program participation. Baseline, or current services, budgeting, therefore builds automatic, future spending increases into Congress’s budgetary forecasts.
Baseline budgeting tilts the budget process in favor of increased spending and taxes. For example, if an agency’s budget is projected to grow by $100 million, but only grows by $75 million, according to baseline budgeting, that agency sustained a $25 million cut. That is analogous to a person who expects to gain 100 pounds only gaining 75 pounds, and taking credit for losing 25 pounds. The federal government is the only place this absurd logic is employed.
Just the News posted an article (updated today) about one result of this practice.
The article reports:
The Golden Horseshoe is a weekly designation from Just the News intended to highlight egregious examples of wasteful taxpayer spending by the government. The award is named for the horseshoe-shaped toilet seats for military airplanes that cost the Pentagon a whopping $640 each back in the 1980s.
This week, in honor of pending federal budget negotiations, our award is going to the entire U.S. government for spending a total of $91 billion taxpayer dollars this month last year, in order to ensure their individual agency and organization budgets would not shrink, as Congress negotiated a new deal.
Every year, in corporate offices around the country, departments coming up on the end of their fiscal term rush to spend any additional funds that might be left on hand, lest they be left with a surplus of cash that would lead their corporate overlords to believe they could do just as much work during the next year, with fewer dollars. Parts of the federal government face the same problem every year, as Congress spends each September renegotiating the federal budget to keep the government funded.
The article concludes with some specifics:
While all parts of the government should assume appropriate responsibility for their year-ending spending sprees, it is worth noting that in 2019, 81% of all contract spending occurred across just five departments of government. Of the $91 billion spree, the Pentagon spent $57.5 billion, Health and Human Services spent $5.7 billion, Veterans Affairs spent $3.8 billion, the General Services Administration spent $3.6 billion, and Homeland Security spend $3.5 billion.
In 2019, the federal government spent $575 billion in total on contracts. So, about one sixth, or just under 16%, of those dollars were spent during the last month of the fiscal calendar. By a long shot, September typically sees the highest annual monthly rate of spending from the federal government.
The federal government is once again entering the period of the year when, despite massive coronavirus relief spending, agencies will throw caution to the wind and spend like there’s no fiscal tomorrow.
And that, my friends, is why the deficit is growing and the value of our money is shrinking.