I never got too excited about it (accounting for the war in the budget) one way or the other since war expenditures are necessarily a series of one-time expenses except for items like payroll and fixed costs (and continuing expense that occur during peacetime). But, I can certainly agree that things are simplified if all eggs are counted in one basket.
It will be interesting to see how the following things get accounted for:
TARPS I and II,
MOAB (mother of all bailouts),
Regular budget,
This recent save the homeowners’ mess, and
What’s the other thing? I’m missing one—oh, Detroit.
If I understand correctly, TARPS I and II can probably be off budget as extraordinary, one-time expenses, ok, two-time expenses. Likewise Detroit…once we all come to terms that GM and Chrysler need to be put out of our misery and stop kicking the bankruptcy can down the road. Also, if we’re now done with the foreclosures and underwater homes (I missed that memo by the way, I thought the term was upside-down), that, too, can be off budget.
The budget is the budget, not much we can do about that and I guess the war costs will show up there now since we’ll be cutting all those things cold war things we don’t need.
I think that MOAB will be more problematic. It appears—and no, I haven’t read it—that a lot of this stuff may be ongoing budget issues…like what the caterwauling on the right is calling “the end of welfare reform.” Whether that is what it is or not, it does seem to obligate federal tax dollars to the states on an ongoing basis.
My head hurts.
[Update: I guess I have to revisit TARP I and the first half of the budget for this fiscal year since they were passed under Pres. Bush. I'll go ahead and ascribe TARP II to President Obama since Bush punted.]
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Want to make any predictions as to how those things will be treated?
No idea but if the war is coming into the budget then I'd hope the messy parts of MOAB would be, too, just for consistncy's sake.
Like I said, I think it would be fair to treat the other three (Detroit, mortgages and TARPS) off the budget unless they chang into some kind of ongoing obligation.
Does the spending in the Stimulus bill only get attributed to this fiscal year or does it get counted as it gets spent? If the former, it should be pretty easy to reduce the deficit by half.
Even if not all the stim money gets counted this year, it will add to the deficit this year and that helps make it possible to cut the deficit by half. Obama likes the double-whammy, and this may be one of them (where "double-whammy" means you do two good things at once, in this case getting credit for transparency (deserved) and then for cutting the deficit in half (partially deserved)).
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