Budget Report Shows Increased Spending in 2010
If you ask the Congressional Budget Office how the expenses of the federal government in 2010 compare to 2009, the CBO will tell you expenses are 2.4% less in 2010. Though, according to the CBO’s own data, this is not an accurate portrayal of expenses in 2010.
In calculating the expenses for 2010, the CBO has nonchalantly reduced $108 billion from the total. This money is associated with the Troubled Asset Relief Program, which lent money to the financial sector in 2009.
TARP has turned around from spending $166 billion in 2009 to receiving $108 billion in 2010, according to the September data from the Congressional Budget Office. As a result, the CBO has taken the $108 billion returned to TARP and quietly reduced it from total expenses.
Perhaps someone should tell the ivy-leaguers at the CBO that if something is an expense in the past and then becomes profitable, it does not follow to subtract this profit from other expenses.
With the exclusion of TARP’s profit from total expenses in 2010, spending has actually increased .94% in 2010, as the chart below shows.
For the current fiscal year, defense spending has increased 5.1%, Social Security has increased 5.7%, Medicare has increased 5.0%, Medicaid has increased 8.7%, and unemployment benefits have soared 38%. These increases represent how spending has increased in 2010.
Even though each of these programs increased more in 2009, keep in mind that total spending in 2009 increased the most since 1975 or 18% in a fiscal year.
Therefore, it's accurate to say that total expenses increased at a greater rate in 2009, 18% in 2009 compared to 6% so far in 2010, but total expenses are not less in 2010, unless of course you include $108 billion of revenue.
While it is understandable why the CBO reduces the $108 billion from expenses, to show a comparison of the positive outcome of TARP in 2010 to the expenses of TARP in 2009, a means of publishing this comparison does not warrant the actual subtraction of revenue from other expenses.
So when you ask the CBO about how the expenses of one year compare to another, which we all do on a normal basis, just remember to ask them not to include any revenue that was a past expense alongside the current year’s expenses.
Though, it would be nicer to easily ask them how expenses compare, but I digress.