A Cut Is a Cut Is a Cut

Budget Director James C. Miller III has made a valiant effort to “demystify” the federal budget by trying to explain when a budget cut really is not a budget cut. But the bottom line of Miller’s thesis is just more doubletalk.

When Congress protests that the Administration is cutting the budget, it really is fooling the voters, Miller complained in an article published in Monday’s New York Times. The budget still is going up. The only thing cut has been the rate of growth. The problem, Miller explained, is that congressional budgeteers talk in terms of the “current services” budget. This is what the budget would be if all of last year’s programs were continued to provide the same level of services and benefits. To be honest, budget experts should speak in absolutes, he said. If the budget goes from $1 trillion to $1.02 trillion, that is a $20-billion increase.

That is straightforward enough. But what if Medicare is $111 billion in 1987 and $112 billion is budgeted for 1988? Assume 5% inflation and that an additional 5 million people go onto Medicare during the year. The budget would be increased, on paper, but inflation would cut the purchasing power of last year’s $111 billion by $5.5 billion and leave only $105.5 billion plus the Administration’s new $1 billion, for a total of $106.5 billion. And that would have to cover the new people who would, presumably, be needing just as much health care as the others. Try to explain this “increase” to a senior citizen who suddenly finds that Medicare will not pay in 1988 for what it covered in 1987.

Or, what of a family of four that budgeted $7,000 for groceries in 1987 and allowed an inflation-adjusted $7,350 for 1988? Then suppose that a baby is due the first month into the new budget year and no allowance is made for his or her needs. One can insist that the budget still has increased and can dismiss the shortfall as a “current-services” technicality. But someone is going to suffer some very real hunger pangs.

The real problem with Miller’s thesis is that he is talking in economists’ jargon of apples and oranges and fiscal nuts and bolts. The budget is a record of federal services for people who live not on paper but in the real world. When there is less to go around, that is a cut no matter how you slice it.