By James Burkee and Jeff Walz - 04/16/07 08:33 PM EDT
Yet in one surprising area politicians in Washington have worked together in a remarkably bipartisan fashion. Many of them, on both sides of the aisle, have agreed that it is now entirely legitimate to deceive their constituents and perpetuate a conspiracy of silence on what U.S. Comptroller General David Walker calls the coming budgetary “tsunami.”
Consider the most recent budget numbers released by both the White House and Congress. Last month the House of Representatives approved a budget resolution projecting a surplus of $153 billion by 2012. President Bush’s 2008 budget reaches similar conclusions, promising a balanced budget by 2012 with increased spending on homeland security, low tax rates and entitlement reform.
Both budgets, and both parties, use counterfeit accounting principles and deceptive language in manufacturing this sunny scenario. The president’s budget, released in February, assumes annual spending of $70 billion for wars in Afghanistan and Iraq. Yet the same budget requests $100 billion in supplemental funding for the wars this year alone and excludes war funding in 2009. The House budget assumes that the 2001 and 2003 tax cuts will fully expire in 2010 and that the Alternative Minimum Tax (AMT) is left unaltered.
The non-partisan Concord Coalition (www.concordcoalition.org), which produces its own “plausible baseline” budget, estimates that if both budget proposals included spending projections that keep pace with economic growth, a reworking of the Alternative Minimum Tax (AMT) and extension of the president’s own tax cuts, the U.S. is headed not for a $170 billion surplus by 2012, but a $400 billion deficit.
But it gets worse.
Many remember the 1994 Contract With America’s promise to make Congress obey laws that applied to everyone else. Unfortunately, Congress did not mandate that it obey the same accounting principles every business in America has to follow. While Congress demands “accrual” accounting for every publicly traded corporation in America, it continues to use cash accounting, which allows it to present a much rosier financial picture than actually exists. If Washington were run like a corporation, using accrual accounting, our national debt wouldn’t be $9 trillion; it would be over $40 trillion.
Politicians left and right have developed an Orwellian form of doublespeak intended to perpetuate the hoax and their own power. The president’s 2001 tax cuts provide one example. The tax cuts are an example of “sunset” legislation: Instead of changing tax rates permanently, as intended, the tax cuts expire in 2010. This serves two purposes: In 2010 Republicans can put Democrats under severe political pressure to support an extension of the tax cuts. More importantly, the sunset legislation allows politicians to fudge the long-term budget projections.
So Democrats build into their long-term budget projections an expiration of the tax cuts, although many Democrats support an extension of lower tax rates for lower and middle-class Americans, and a revision of the AMT, which threatens to hit hard millions of middle-class Americans soon. And Republicans can argue that the tax cuts do not create long-term deficits, although they plan to fix the AMT and advocate making the president’s tax cuts “permanent.”
Consider also the House Democrats’ boastful passage of new “pay-go” bill, the “Restoring Fiscal Discipline Act” mandating that Congress pay through taxes or cuts for any new spending. Congressional pay-go does little to restore fiscal responsibility: Congress can easily override the resolution — in fact Congress was governed by pay-go until 2002. Moreover, pay-go applies only to new spending programs and does not force Congress to fully pay for programs already existing. Finally, entitlement spending is exempted.
The bipartisan conspiracy of silence is so profound that Walker, who heads the Government Accountability Office, has given up on trying to convince politicians to talk and act with integrity and instead is taking his message to Americans with a “Fiscal Wake-Up Tour” with the Concord Coalition and a bipartisan panel of economists from the right-leaning Heritage Foundation and left-leaning Brookings Institute. Our nation’s financial mess is, he argues, a “dirty little secret everyone in Washington knows” yet refuses to address.
Comedy Central’s Stephen Colbert recently coined the term “truthiness” to depict modern Washington’s reliance on perception over facts, telling Americans what they “want to be true” instead of “what is true.” Little exemplifies better Washington’s predilection for “truthiness” than our political class’s approach to the nation’s finances.
There are simple solutions to the problem. One is found in America’s institutions of higher education. As we enter the 2008 presidential election cycle, Americans must hold their politicians to the same standards we in the academy hold our students to: Using good, honest sources. We call on the presidential candidates to use uniform, commonly agreed-upon statistics in the coming campaign. A good place to start is Annenberg’s Factcheck.org (www.factcheck.org). Washington must adopt the same accounting standards it expects of corporate America: accrual accounting.
Congress should again consider the congressional Class of 1994’s calls for term limits for legislators. Congressmen and Senators not burdened with the scramble for reelection — and millions in campaign donations — will be more likely to talk plainly and truthfully with Americans about our fiscal situation.
The media must play a leading role in this process. Journalists already maintain widely accepted standards, characterizing defendants as “alleged” and protecting confidential or anonymous sources. Media elites organized standards of language on the war on terror. If the media can establish principles in these areas, surely it can and must report honest numbers on the national debt — and confront politicians who use bogus statistics.
Sometime this summer, Congress will vote to extend the ceiling on the national debt from $9 trillion to over $10 trillion. Yet the situation is even worse. With trillions in liabilities on the near horizon, we need now, more than ever, honest politicians. Only then will we find a way to forestall the looming, catastrophic financial crisis.
Burkee, a Republican, and Walz, a Democrat, teach history and political science at Concordia University Wisconsin. They are co-founders of Americans for Responsibility in Washington (www.responsibilitypac.org).