Budget Cuts: How Government Cooks the Books
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By David Fahrenthold,
The Washington Post
February 11, 2013

Late on the night of April 8, 2011, Washington’s leaders announced that they’d just done something extraordinary. They had agreed to cut the federal budget — and cut it big.

“The largest annual spending cut in our history,” President Obama called it in a televised speech.  

To prevent a government shutdown, the parties had agreed to slash $37.8 billion: more than the budgets of the Labor and Commerce departments, combined. At the Capitol, Republicans savored a win for austerity. There would be “deep, but responsible, reductions in virtually all areas of government,” House Appropriations Committee Chairman Harold Rogers (R-Ky.) promised a few days later, before the deal passed.

Nearly two years later, however, these landmark budget cuts have fallen far short of their promises.

In some areas, they did bring significant cutbacks in federal spending. Grants for clean water dried up. Cities got less money for affordable housing. But the bill also turned out to be an epic kind of Washington illusion. It was stuffed with gimmicks that made the cuts seem far bigger — and the politicians far bolder — than they actually were.

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In the real world, in fact, many of their “cuts” cut nothing at all. The Transportation Department got credit for “cutting” a $280 million tunnel that had been canceled six months earlier. It also “cut” a $375,000 road project that had been created by a legislative typo, on a road that did not exist.

At the Census Bureau, officials got credit for a whopping $6 billion cut, simply for obeying the calendar. They promised not to hold the expensive 2010 census again in 2011. Today, an examination of 12 of the largest cuts shows that, thanks in part to these gimmicks, federal agencies absorbed $23 billion in reductions without losing a single employee.

“Many of the cuts we put in were smoke and mirrors,” said Rep. Mick Mulvaney (R-S.C.), a hard-line conservative now in his second term. “That’s the lesson from April 2011: that when Washington says it cuts spending, it doesn’t mean the same thing that normal people mean.”

Now the failures of that 2011 bill have come back to haunt the leaders who crafted it. Disillusionment with that bill has persuaded many conservatives to reject a line-by-line, program-by-program approach to cutting the budget.

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Instead, many have embraced the sequester, a looming $85 billion across-the-board cut set to take effect March 1. Obama and GOP leaders have said they don’t like the idea: the sequester is a “dumb cut,” in Washington parlance, which would cut the government’s best ideas along with its worst without regard to merit.

But at least, conservatives say, you can trust that this one is for real. “There has been a shift in resolve. They have been burned in these fictional cuts. And so the sequester is like real cuts,” said Chris Chocola, a former congressman who now heads the Club for Growth, a conservative advocacy group. “So I think that there is a willingness to say, ‘We’ve really got to cut stuff, and [the cuts] have got to be real.”

The April 2011 budget cuts ended the first big battle of Congress’s current era. That spring, a new crop of House conservatives — elected with tea party support — was demanding large budget cuts. The legislators would risk a government shutdown to get them.

But in both parties, leaders resisted the idea of a meat-ax cut to government. There was a recession going, after all. “Given the economic and employment crisis, we tried to limit cuts that would cause major furloughs or layoffs that would put people out of work,” Rogers said in a written statement released this week. He declined to be interviewed on the record, but his statement went on to say that the bill’s “cuts are real, and every dollar we did not provide is a dollar saved for the American taxpayer.”

The leaders found a solution, according to aides on both sides. Among the real cuts, they would mix in others that looked huge on paper but would turn out small in real life.

“The administration offered, and the Republican leadership accepted, cuts in stores of funding that . . . were unlikely to be used in the future,” said Richard Kogan, a former Obama administration official who is now at the nonpartisan Center on Budget and Policy Priorities. “This was conscious on both sides.”