Understanding the “Cuts”

We’ve heard a lot about cutting spending lately, and that kind of talk is good.  After decades of overspending, this is the proper conversation.  Unfortunately, rhetoric and reality are often at odds.  The word “cut” has a different meaning in Washington – spending less than you planned to spend, but not necessarily less than what you just spent.

Quick example:  On day 1, you spent $10.  You plan to spend $12 on day 2, $14 on day 3 and so on.  Outside of Washington, spending $9 on day 2 would be considered a spending cut.  Inside Washington, however, spending only $11 on day 2 would be considered a cut even though you spent 10% more than you did the previous day.

The chart below maps out budget authority for discretionary spending (excluding war funding) for both the Boehner and Reid debt plans.

In the first year, FY2012, both plans cut spending in the real sense.  After that, however, the spending caps begin to rise.  Supporters of both bills will argue that spending would rise much higher absent the caps, so inside of Washington that is tantamount to a cut.

So you tell us: when is a cut a cut?

Please Share Your Thoughts

3 thoughts on “Understanding the “Cuts”

  1. It is illogical to compare the spending of one individual to the spending of a country, for next year you will still be one person, where as the population of the country will have increased by 5%.

    • The analogy is broken. Last year I could maintain a 75 degree apartment with a $100 electric bill. This year, I’m paying more but getting less for it. I absolutely consider that a cut back.

  2. There is something inherently wrong with this line of thinking. Unfortunately, the average person does not know enough to be able to notice this.

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