NCPA - National Center for Policy Analysis

"Current Services Baseline" Means Spending More

February 28, 2001

President Bush's first budget contains many spending cuts, along with a few increases, such as for education. Bruce Bartlett warns that Democrats will play the old Washington game of calling reductions in the rate of growth of spending for any program a "cut."

According to congressional spenders:

  • Even when the government spends as much or more for a program than the previous year, it still counts as a cut if spending does not rise as much as the so-called current services baseline -- allowing those who always favor higher spending to call budget increases "cuts" if they are not large enough.
  • The current services baseline assumes that any time program spending does not rise by at least the inflation rate, it necessarily indicates a reduction in the services that program provides.
  • Thus the current services baseline ignores improvements in productivity or changes in targeting that might allow more services to be provided at lower cost.
  • And of course it discourages agencies from seeking efficiencies in their operations because they generally get an increase in their budget each year automatically.

Historically, Congress has only cut spending in response to budget deficits. Without such deficits, it will be hard to motivate members of Congress to vote to cut or restrain spending.

Bush might consider resurrecting an old idea from the Carter Administration called zero-based budgeting. The idea, borrowed from the business world, is to make every program justify itself annually.

Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, February 28, 2001.

 

Browse more articles on Tax and Spending Issues